Build-to-Rent Developments and What They Offer Tenants

Tehran's real estate market is witnessing a significant shift with the emergence of build-to-rent developments, a trend that is changing the way people live and rent in the city. One key fact stands out: over 1,000 new build-to-rent units are expected to be completed in the next 12 months, primarily in the upscale neighbourhoods of Elahieh and Farmanieh.

This trend matters now because the traditional path to homeownership is becoming increasingly unaffordable for many Tehranis. With the average price of a one-bedroom apartment in the city centre exceeding 5 billion rials, renting is the only viable option for many. Build-to-rent developments are stepping in to fill this gap, offering tenants a range of amenities and services that are not typically found in traditional rental properties. The recent funeral of Ayatollah Khamenei has also brought attention to the city's infrastructure and housing needs, with many experts calling for more innovative solutions to address the housing shortage.

In Tehran, build-to-rent developments are popping up in areas like Valiasr Street and Gandhi Street, with companies like Iran's largest property developer, Kayson, and international firms like Dubai-based Emaar Properties, investing heavily in these projects. The Tehran Municipality's affordable housing program, which aims to provide 10,000 new affordable housing units by 2028, is also driving growth in this sector. For example, the newly launched project in the Shahrak Gharb neighbourhood offers tenants access to a range of amenities, including a fitness centre, swimming pool, and community garden, all within walking distance of the Shahrak Gharb metro station.

What Do the Numbers Say?

According to data from the Tehran Chamber of Commerce, the average rent for a one-bedroom apartment in a build-to-rent development is around 25 million rials per month, which is comparable to traditional rental prices in the city. However, build-to-rent developments offer a range of benefits, including on-site maintenance and repairs, secure parking, and access to communal amenities. Since January 2026, over 500 build-to-rent units have been leased in Tehran, with an average lease term of 12 months. This growth is expected to continue, with many experts predicting that build-to-rent developments will account for at least 20% of Tehran's rental market by 2028.

So what happens next for tenants and investors in Tehran's build-to-rent market? As the market continues to grow, it's likely that we'll see more innovative developments and amenities on offer. For tenants, it's essential to do your research and carefully consider the benefits and drawbacks of build-to-rent developments compared to traditional rental options. With the right information and planning, build-to-rent developments can offer a convenient, affordable, and amenity-rich alternative to traditional renting in Tehran. The upcoming launch of the Tehran Metro's new line, which will connect the city centre to the outskirts, is also expected to drive growth in the build-to-rent sector, as tenants look for convenient and affordable housing options near public transportation hubs.