ISTANBUL-Leasing transactions in the Istanbul office market slowed in fourth quarter although vacancy rates continued to fall overall throughout the year, says local realtor Propin Property Investment Consultancy. Its forecast for 2011 is brighter as new office districts emerge and firms that postponed planned moves lease new space already in first quarter.

The first new office district to attract investment will be Kagithane, due to its privileged location, easy access and adjacent urban renewal, making it the focus for businesses along the so-called Buyukdere Axis, the report says. In Q4, vacancy rates continued to fall in the European and Asian sides of the city, decreasing to 11.3% in the central business district and to 26% for Class B office buildings. Outside CBD, on the European side, the vacancy rate was 18.6%, and 14.4% on the Asian side. Lowest vacancies for Class A buildings in the city's 12 office districts was in Maslak, which is within the CBD, with 1%. The district also registered the fastest growth in terms of stock during 2010.

The city continues to exhibit an east-west divide, with higher rents on the Asian side of the Bosphorus. In the CBD, rents increased by some $2 from Q4 2009 and closed at $28.2 per square meter per month, at $20.3 per square meter per month outside of the CBD on the Asian side, and with no change on the European side at $18 per square meter per month.