Tehran’s dormant property sector is getting a glimpse of a window opening in the office market as foreign companies gradually warm up to the expected economic revival.
As the country is only days away from the implementation of the historic nuclear deal with the six world powers, foreign firms are looking closely at setting up shop in the capital to build proximity to the relevant ministries and organizations.
“The market is fairly good and more foreigners are looking for office space,” a high-end realtor in Tehran said.
Foreigners are looking for both small and large offices with small and medium-size companies preferring 100-200 sq meter apartments while larger companies wanting more spacious offices ? sometimes renting the whole building, the realtor Hussein Taheri said.
Tehran is considered as one of the cheapest capital cities in the world and now with a weaker rial, foreigners should not have difficulty in paying rents even though most landlords dealing with non-Iranians prefer to be paid in foreign currency.
‘Landlord and Tenant Act’ requires foreigners to obtain a series of permissions for renting offices or homes but there are no price regulations. The parties negotiate the price themselves.
Expats are also allowed to own property for commercial or industrial use or even for residence but the painful bureaucracy and lengthy legal formalities plus high costs are big deterrents.
Owning property by foreigners is subject to permission from the Foreign Ministry for legal residents plus certification of a clean bill of health issued by the government of the country of which the foreigner is a citizen.
Expatriates also need to get a tax clearance certificate from the Ministry of Economic Affairs and Finance and the municipality.
Realtors and lawyers help expats through these steps. Regulations allow realtors to charge the tenant and the landlord the equivalent of 3-4 days of rentals, but usually they ask for more especially from foreign clients.
Locations & Prices
While in past most of the offices were in the overcrowded Abbas Abad and Motahari Districts in central Tehran, now offices are dispersed across the sprawling city. But since these areas are now within Tehran’s restricted traffic zones, most businesses prefer offices and homes in the upscale areas.
Africa Street (formerly Jordan), Mirdamad , Elahieh, Vanak, Velenjak and Sa’adat Abad as well the newish west-side of the city are among the more popular neighborhoods for both Iranians and expats, according to a survey conducted by the Financial Tribune.
Renting a brand new 100-square-meter apartment in the uptown Jordan district costs at least $1,600 per month. Flats of the same age and size can be leased for anything between $1,200 to $1,400 in Vanak and Saadat Abad respectively.
A 320-sq-meter flat in Jordan goes for $16,000 a month while an office of the same size in Vanak would cost $6,000 per month. Older buildings are cheaper. A 25-year-old 620-sq meter office in Shahrak-e-Gharb costs nearly $13,000 per month.
Elahieh is another uptown area where embassies and diplomatic residencies are a common sight. A 130-sq-meter office in this area comes for nothing less than $2,500 per month.
As there is no limit for owners to let their property to foreigners, there will probably be more but expensive real estate available in the coming months.
