Demand for office areas overtops supply
Real estate agents expect steady growth in office demand
3 өдөр, 7 цаг өмнө
Whilst the housing market is the center of attention in the real estate, offices are showing promising forecast as the demand is exceeding supply according to Master Properties LLC.
Last year, a total of 215 projects with an available office space of 985,000 square meters was commissioned. About half of these are located in the downtown area in Sukhbaatar district. 72.9 percent of offices in this district are luxury-class; however, about 80 percent of private entities operating in the capital are the small and medium-sized enterprises with up to 20 workers. According to a survey, these entities prefer comfortable, low-cost offices that are not too far from downtown. In other words, there is a gap between the purchasing ability of customers and construction supply.
The trend in the office market is dependent on economic growth. Experts highlight that almost half of the demand for class-A offices are both, directly and indirectly, connected to the mining sector. Thus, the office market began to restore on the back of the upsurge of the mining sector since 2017.
The number of office seeking entities annually grow by 1,100 on average, which equals to 50,000- 60,000 in square meters. Plus, nearly 40 percent of entities renting office spaces are unsatisfied with the office environment. Considering these indicators, real estate agents forecast the demand for office to grow steadily in the upcoming years, suggesting an annual growth of over 8 percent.
As for ideal offices, a survey shows that private entities prioritize location the most, preferably near downtown. The priority list is followed up by price, class, and availability of parking areas. The preference drops significantly for office buildings that perform poorly on these areas, noted Tenkhleg Zuuch LLC.