Investing in an Office at Yıldız Residence: The Tenant Profile

Gayrettepe is one of the areas within Istanbul's Central Business District that sees strong corporate tenant demand, and Yıldız Residence on Yıldız Posta Street appeals to a large part of that demand with its young building and compact office units. For anyone thinking of buying an office as an investment, the real question is who will rent it, on what terms and how easily. In this post we look at that question through the tenant profile and the factors that shape rental potential. It is not a promise of returns; every office needs its own assessment.

Who rents compact offices?

Small and mid-sized offices, mostly with a 1+1 layout, are preferred by consultancies, finance, law, architecture, software and professional services firms, as well as by representative offices of foreign companies and small project teams of larger groups. The trend among companies adopting hybrid working to move into smaller but central, good-quality offices also supports this segment.

How location drives demand

Gayrettepe metro station within walking distance, proximity to Büyükdere Avenue and the Zincirlikuyu axis, and easy access to Barbaros Boulevard and Levent are among the first things tenants look at for staff and client access. A central location is one of the most important factors in shortening vacancy periods.

The advantage of a young building

A large share of Gayrettepe's office stock is in older buildings. Especially whenever earthquake concerns rise, tenants show more interest in new, young buildings. Compared with the area's older offices, Yıldız Residence's young structure and covered car park are a distinguishing feature in tenants' eyes.

What shapes rental potential

• Floor and aspect: daylight, visibility and street noise.
• Parking: whether a space is allocated to the unit.
• Condition: a well-kept, ready-to-use and orderly interior.
• Service charges: the total cost the tenant will pay.
• Title deed designation: fit with the tenant's commercial activity and licence.

What investors should watch

Setting the rent above the market can leave the office vacant for a long time and lower total income. When choosing a tenant, assess how their activity fits the building rules, their ability to pay and the lease terms. Rent reviews and the lease term should be stated clearly within legal limits, and the deposit and handover report prepared in full.

Preparing for the investment decision

Before buying, a value and rent analysis of the office, a look at how long similar-sized offices take to let and who rents them, and an eye on future resale are the foundations of a sound investment decision.

Buying with a tenant or vacant?

Buying a let office gives the investor rental income from day one, but the rent, review terms and remaining term of the existing lease determine the quality of that income. A vacant office lets the investor choose the tenant and set the terms, but means allowing for the time until the first tenant is found and for costs such as service charges in the meantime. Which is better depends on the investor's cash-flow expectations and timeline.

Resale prospects

The value of an office investment is not only its rent; how easily it can be sold later matters too. A young building, central location, metro access, covered parking and a compact floor area all widen the pool of buyers.

Our detailed guide to the building's location and features: Yıldız Residence offices for sale.

If you are looking for an investment office at Yıldız Residence or want to let yours, please get in touch with us.

Özkan ÖZEL
Strategic Real Estate Asset Management
Beşiktaş / Istanbul
ozkanozel.com

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