November 2022

This month, Jasen Leith has been undertaking an office search in Yerevan, Armenia on behalf of a client, as well as looking at the market more generally.

The office market in Armenia is concentrated in Yerevan with the majority of the stock being in the district known as the “small centre” (Kentron in Armenian) in the south of the city. Virtually all of the major office developments are located in this area, with tenants including government departments, international and domestic headquarters, banks and services. Approximately 75% of Armenia’s service economy is located in Yerevan’s CBD.

The majority of offices in the CBD are Grade B. However, over the past 5 years there has been a modest increase in the number of new Grade A developments appearing on the market - primarily to accommodate an increased interest in the city from telecommunications and IT companies. That said, demand for Grade A office space remains limited, as SME’s and government departments make up the majority of prospective tenants. In fact, an estimated 96% of registered legal entities and sole proprietors in Armenia are SME’s. This could explain why the average size of office space listed in Yerevan is less than 150 sq m.

Supply for Grade A and B office space in the CBD increased notably between 2010 and 2022 with the completion of Yerevan Plaza, Piazza Grande, Elite Plaza, Imperium Plaza and Kamar business centre which collectively raised the amount of modern office space in the district by 65,000 square metres. Despite this, the market for the construction of Grade A office buildings has ground to a halt over the past 18 months, primarily due to a lack of demand and constructible space in the CBD area. The amount of modern office space in Yerevan currently is at around 100,000 sq m and if this number is to increase, it is likely that developers will have to consider other areas of the city.

For more information on the real estate market in Armenia, please contact us here.