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Israel Commercial Real Estate Market Size (2024 - 2029)

The market size of Israel's commercial real estate sector exhibits stability and moderate growth, with a notable emphasis on the industrial segment driven by the expanding hi-tech and biotech industries. Despite the limited impact of REITs on commercial space demand, the construction of commercial properties has seen significant approvals, particularly over other types like hotels. The retail real estate segment has experienced a slight decline in growth due to the increasing shift towards e-commerce, affecting traditional retail setups.

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Market Size of Israel Commercial Real Estate Industry

commercial real estate market in israel size
Study Period 2020 - 2029
Base Year For Estimation 2023
Forecast Data Period 2024 - 2029
Historical Data Period 2020 - 2022
CAGR 6.12 %
Market Concentration Low

Major Players

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*Disclaimer: Major Players sorted in no particular order

Israel Commercial Real Estate Market Analysis

The demand for real estate sector in Israel remains relatively stable and was growing at a decent pace during the historic period of 2015-2018. According to the data by Israel’s Central Bureau of Statistics of Israel, the construction area for commercial properties involving varied business services had maximum approval compared to hotels. Israel REITs – REITs are yet to make an impact on the commercial space demand, unlike that in residential area.

  • In the industrial segment, hi-tech and biotech industries areexpanding at a rapid rate every year.
  • Israel is second only to the US Silicon Valley in the hi-tech sector, and has the largest number of NASDAQ-listed companies outsideNorth America.
  • Israel is considered to be the leader of the world's high tech developments, with the presence of multiple hi-tech companies that excel in computer technologies, semiconductors, and communications.
  • Retail real estate segment registered a moderate NOI growth of about 0.5-1% lower than that of previous years, owing to the rise in the ecommerce sales shifting from the traditional brick and mortar set ups.

Israel Commercial Real Estate Industry Segmentation

A complete background analysis of Israeli commercial real estate market, which includes an assessment of the parental market, emerging trends by segments and regional markets, significant changes in market dynamics, and market overview is covered in the report

                                Office

                                Industrial

By Property Type   Retail 

                               Hotels

                               Other Property Types

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Israel Commercial Real Estate Market Size Summary

The Israeli commercial real estate market has shown resilience and steady growth, particularly in the industrial sector, where hi-tech and biotech industries are rapidly expanding. Israel's prominence in the hi-tech sector, second only to Silicon Valley, has bolstered demand for commercial properties, although the impact of Real Estate Investment Trusts (REITs) has been more significant in residential areas. The retail segment has experienced moderate growth, influenced by the shift towards e-commerce, which has affected traditional brick-and-mortar establishments. Despite challenges such as land and labor shortages, the market is adapting, with government initiatives easing land scarcity and agreements to bring in foreign construction workers to address labor shortages.

The commercial real estate market in Israel is becoming an attractive option for foreign investors, driven by the stability of property prices and the country's economic resilience. Despite a slower growth rate, Israel's economy continues to outpace many Western economies, making real estate a compelling investment choice. Emotional factors, such as Zionism and global anti-Semitism, also play a role in attracting foreign investments. The market is dominated by major players, but technological advancements and innovation are enabling smaller companies to expand their presence. Key players include Azrieli Group Ltd, Ashtrom Group Ltd, Gazit-Globe Ltd, Amot Investments Ltd, and Melisron Ltd, who are actively securing new contracts and exploring new markets.

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Israel Commercial Real Estate Market Size - Table of Contents

  1. 1. MARKET DYNAMICS

    1. 1.1 Market Overview

    2. 1.2 Drivers

    3. 1.3 Restraints

    4. 1.4 Opportunities

    5. 1.5 Technological Innovations

    6. 1.6 PESTLE Analysis

    7. 1.7 Industry Policies and Government Regulations

    8. 1.8 Insights on Existing and Upcoming Projects in Israel

    9. 1.9 Industry Attractiveness - Porter's Five Forces Analysis

      1. 1.9.1 Threat of New Entrants

      2. 1.9.2 Bargaining Power of Buyers/Consumers

      3. 1.9.3 Bargaining Power of Suppliers

      4. 1.9.4 Threat of Substitute Products

      5. 1.9.5 Intensity of Competitive Rivalry

  2. 2. MARKET SEGMENTATION

    1. 2.1 Offices

    2. 2.2 Industrial

    3. 2.3 Retail

    4. 2.4 Hotels

    5. 2.5 Other Property Types

Israel Commercial Real Estate Market Size FAQs

The Israel Commercial Real Estate Market is projected to register a CAGR of 6.12% during the forecast period (2024-2029)

Azrieli Group Ltd, Ashtrom Group Ltd, Gazit-Globe Ltd, Amot Investments Ltd and Melisron Ltd are the major companies operating in the Israel Commercial Real Estate Market.

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