Page 47 - IRANRptOct19

The dizzying drop in the value of the Iranian rial (IRR) against a basket of hard currencies by some 65-70% in the past 12 months under the economic pressure generated by US sanctions has led landlords to jack up rents. Annual rental agreements in Iran are now often renegotiated due to sudden increases demanded in deposits and monthly payments demanded by landlords.
Hesam Oghbayi, vice president of the Real Estate Advisors' Union told IRNA: "One determinant in rent prices around the world is housing prices; inflation and the imbalance between supply and demand as well as population growth are other factors.
"The capacity to increase rental rates is not more than 20% in big cities, and around 10 to 15% in smaller cities.”
He added that “the possibility of increasing prices in the rental market is remote because of supply and demand in renting”.
In recent years, according to Oghbayi, housing prices have climbed without pause, “and as a result, in those years more tenants have migrated from wealthy sections of [cities] to downtown areas, and tenants in more deprived areas migrate to satellite towns eventually”.
Iran’s Ministry of Roads and Urban Development announced on May 20 that it is to set up an emergency committee to set rental rates to ensure they do not exceed consumer inflation.
Abbas Farhadieh, director of the housing investment and economy department at the ministry, reportedly said: “The committee will consist of nine people from the private sector, Majlis [parliament], estate agents and the central bank.”
The committee would not interfere in the free market but would attempt to set clear guidelines for property prices in each individual area, he added.
The Statistical Centre of Iran (SCI), in its latest report on the matter, said rental prices in Iran increased by 21.7% y/y in the fourth quarter of the 2018/2019 Persian calendar year (ended March 20).
The minimum price per square metre of residential floorspace in Tehran stood at IRR28,000 ($0.20) in the capital’s poor southern districts, with the maximum price being IRR1.71mn ($12). The prices do not take into account the required deposit.
9.1.8​ Retail sector news
Tehran’s Shahrvand Supermarket, one of the largest grocery chains in the sprawling capital city, is set to open its first branch in nearby Karaj, IRNA reported on August 28.
Shahrvand is known as one of the first western-style large supermarkets to have opened in Iran. It is wholly owned by the Tehran Municipality. By using the vast land resources of the city council, the supermarket chain has built up a significant advantage over commercial competitors in the past two decades. Morteza Alviri, head of the Supreme Council for the Provinces, said the move to expand the brand was within the remit of the company. There have been some calls for it to expand in Tehran further before moving on to other cities. The store in Karaj—which serves as the capital of Alborz Province, but is effectively a suburb of Tehran—is set to be followed by outlets in Shiraz, Tabriz, Mashhad and Isfahan.
There are 48 Shahrvand supermarkets of different sizes in Greater Tehran, home to 15mn people.
The biggest supermarket chain in Iran is presently Ofogh Koorosh, which works with the “discounter” methodology and is aggressively opening stores across the country. It has over 500 stores in the country.
47​ IRAN Country Report​ October 2019 www.intellinews.com