An Econometric Analysis of the Office Market Rent in Istanbul : Long-run Equilibrium Rent Estimation

Abstract: The Istanbul metropolitan area is the largest office investment made in Turkey. According to the CBRE ERIX data, the total office stock in Istanbul by the end of 2018 exceeded 7 million sqm. There is approximately 1 million sqm of pipeline figures. The biggest problem for office projects which in the hold-on status and under construction status, Turkey's economy is rapidly affecting office rents and tenants of office the selection criteria. In particular, high financing costs and construction costs increase the importance of predicting the rent figures in office investments. This degree project aims at contributing to the understanding of the Istanbul rental office market underlying mechanisms. The office market data will be analyzed between Q1 2005-Q4 2018 period. Long-term equilibrium rents will be reached for the Istanbul office market and examined sub-markets. With the econometric analysis method, the long-term causality for rent with employment, stock and vacancy will be examined. Short-term estimates will be made with an error correction model.