A Guide to Leasing and Buying Commercial Spaces in Israel
Securing the right commercial space is one of the most critical decisions a business can make. Israel’s dynamic market offers a wide variety of options, each with its own considerations. This guide covers the main types of commercial spaces and what to look for.
Types of Commercial Spaces for Lease and Sale
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Retail Spaces (Shtachei Mischar):
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High Street Shops: Located on main commercial streets in city centers. They offer high visibility and foot traffic but come with premium rental costs.
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Shopping Mall Units: Spaces within large, enclosed shopping centers. Benefit from the mall’s marketing, high visitor numbers, and shared amenities. Leases often include a percentage of turnover in the rent.
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Neighborhood Centers: Smaller commercial centers anchored by a supermarket. Ideal for businesses serving the local community, like pharmacies, cafes, and service providers.
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Offices (Misradim):
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Class A: Prime office buildings in central business districts, featuring modern infrastructure, high-end finishes, and professional management.
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Class B/C: Older buildings in less central locations, offering more affordable rent. Often suitable for startups and small businesses.
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Shared Workspaces: Companies like WeWork and local competitors offer flexible leases on individual desks or private offices within a larger, managed facility.
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Industrial and Logistics Spaces (Mivnei Ta’asiya v’Logistika):
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Warehouses (Machsanim): Used for storage and distribution. Key factors are ceiling height, loading docks, and proximity to transportation networks.
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Workshops/Light Industrial: Spaces suitable for manufacturing, assembly, or artisan work. Often located in designated industrial zones (Eizor Ta’asiya).
Key Considerations When Choosing a Commercial Space
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Zoning and Licensing: Ensure the property’s zoning (taba) permits your intended business activity. Certain businesses require specific licenses from the local municipality (iriya).
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Arnona (Municipal Tax): Commercial Arnona rates are significantly higher than residential rates. This is a major operating expense to factor into your budget.
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Lease Terms: Commercial leases in Israel are often long-term (3-5 years) with options to extend. Pay close attention to clauses regarding rent increases (often linked to the CPI), maintenance responsibilities, and exit conditions.
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Fit-Out (Gmarim): Determine whether the space is delivered as a bare shell (ma’atefet) or with an existing fit-out. The cost of renovations and customization should be factored into your budget.
Finding the right commercial space in Israel requires careful research and due diligence. Working with a commercial real estate agent who specializes in your desired sector can provide invaluable expertise and market access.
