Monday, January 5, 2015

Why Tel Aviv’s market has grown 75% in five years

Certain countries garner column inches in inverse proportion to their size. Israel’s presence looms large, both in Middle East politics and wider scientific and cultural arenas, despite an area of just 21,000 sq km, ranked in size between El Salvador and Slovenia. Although it is in the midst of the Middle Eastern conflict, with associated security worries and international censure over the treatment of Palestinians, it is still prominent in the global property market, with the success of its domestic high-tech industry and buyers from the Jewish diaspora fuelling prime residential sales in Tel Aviv. This city’s renaissance over the past decade has brought accolades for its restaurants, nightlife and arts scene. It is also the country’s most densely populated city, with an average of 7,522 people per sq km, compared with 5,750 per sq km in the capital, Jerusalem. Tel Aviv’s prime residential market has grown 75.4 per cent in the five years to the first quarter of 2014, according to research by Knight Frank, outstripping London, Dubai, Paris and New York. The International Monetary Fund, however, suggests prices are unrealistically high, and the bubble must burst.

Founded in 1909, Tel Aviv grew rapidly under the British Mandate, reflecting the tastes of its immigrant population. A stroll through the city’s leafy boulevards today will reveal – among the high-rises – exuberant houses dating from the 1920s, embellished with art-deco elements and eastern flourishes, alongside more sober lines of the Bauhaus School, introduced by German-Jewish refugees in the 1930s. More than 4,000 buildings of this modernist architectural heritage form the basis of Tel Aviv’s White City area, recognised as a world heritage site by Unesco in 2003.

Thursday, January 1, 2015

Top ten Israel property deals of 2014

"Globes" looks back at 2014 and ranks the ten most expensive homes sold in Israel over the past year. Six of the homes were in Tel Aviv, two in Jerusalem and one each in Herzliya Pituach and Ramat Hasharon.

Here is the list starting with the house of Arik Vardi that reportedly used to belong to Baroness Batsheva Rothschild and which is located in the Ramat Aviv neighbourhood:

  • NIS 130.1 million - Check Point Software Technologies Ltd. (Nasdaq: CHKP) founder chairman and CEO Gil Shwed, and "Globes" businessperson of 2014, bought a 560-sq.m. house in the Tel Aviv neighborhood of Afeka in August from ICQ founder Arik Vardi, who had bought the home in 2000 for just NIS 20.8 million.
  • NIS 110 million - Ofer Investments controlling shareholder Leora Ofer bought a penthouse in January in the Herbert Samuel project on Tel Aviv seafront from her own company. The 690-sq.m. apartment covers the 20th and 21st floors and also has a 300-sq.m. patio.
  • NIS 70 million - DEKA, controlled by Jacky Safra bought the 1,700-sq.m. Sherover House in Jerusalem's Talbieh neighborhood in December from the estate of Gita Sherover. Located by the Jerusalem Theater at the junction of Pinsker, Marcus and Dubnov streets, the house sits in a 1.1 acre lot and has building rights for an additional 1,120-sq.m.
  • NIS 45 million - PokerStars CEO Mark Scheinberg bought a 588-sq.m., 10-room apartment in Tel Aviv's Rothschild 1 project in February from former Bank Hapoalim (TASE: POLI) chairman Shlomo Nehama.
  • NIS 43.5 million - Canadian-Jewish businessman Moti Maximoff bought a 13th apartment in Tel Aviv's Meier-on-Rothschild Tower in March. The 800-sq.m. apartment has 48-sq.m. of balconies on the 31st floor of the 42-floor building. He bought the apartment through his company, Ironstone Capital.

Tuesday, October 28, 2014

Leumi lends Taic NIS 1.2b for David Promenade project

Bank Leumi recently signed an agreement with hotelier Henry Taic for the financing of the David Promenade Towers project that Taic is constructing opposite the Opera Tower, close to Tel Aviv's beachfront.

Under the agreement, Bank Leumi will finance the project to the tune of NIS 1.2 billion, covering the cost of construction and the guarantees to buyers of apartments in it. Taic and Bank Leumi CEO Rakefet Russak-Aminoach celebrated the signing of the agreement with a cake in the shape of the project.

Tuesday, September 23, 2014

White City Residence to add another 8 floors?

Just months away from the scheduled delivery of White City Residence to its future residents, Zemach Hammerman and Eurocom just received approval from the Planning Commission of Tel Aviv for an additional 8 floors that would bring the tower to a total of 38 floors and 157 appartements.

In addition, the Commission revoked the duties imposed by the municipality to the promoters, such as the road widening, the construction of a kindergarten and a synagogue, as well as the relocation of the Orthodox girls' school Ohel Jakob to Bnei Brak.

Originally the tower was supposed to be a 30-story building and the developers seeked to increase it to 41 floors. They were then given the option to increase the tower to 38 floors in exchange for public duties. But that option was subsequently cancelled following opposition from Neve Tzedek residents.

The developer is now looking at its options as adding the additional floors after the penthouses have already been built will add further costs and delays to the delivery along with significant penalties.

UPDATE: It just took a few days for the Neve Tzedek residents association to appeal the court decision. This drama is therefore far from over. To be continued...

Source The Maker

Friday, August 1, 2014

Patrick Drahi buys Tel Aviv site for NIS 130m

Billionaire Patrick Drahi, who controls HOT Telecommunication Systems Ltd. and i24news in Israel as well as Numéricable and SFR in France, and who was recently ranked the wealthiest man in Israel by Forbes magazine, with a fortune worth some NIS 10 billion, has decided, like many others, to invest his capital in real estate.

Indeed, he just bought the "Rav Kook" site in Tel Aviv's Neve Tzedek neighborhood for NIS 130 million, not including VAT. The site lies between Hamered, Eliezer Rokach and Ein Yaakov streets. There are several historic buildings on it with strict preservation orders, a few buildings marked for demolition, and some empty lots. Among the buildings designated for preservation is the Rabbi Kook Synagogue, built in 1904, and the study hall of Rabbi Abraham Isaac Kook, who was the first Ashkenazi chief rabbi of Palestine under the British mandate. The site was owned by Yeshuati, a company controlled by US businessman Yaniv Zaguri.

Monday, June 30, 2014

Lapid to expand zero VAT to Tama 38 projects

Minister of Finance Yair Lapid proposed today amending the zero VAT bill to include residential projects under National Outline Plan 38 or Tama 38 (earthquake retrofitting). The amendment appears in a draft of the bill published today for public comments. Lapid accepted a recommendation by the Israel Tax Authority and Israel Builders Association to include National Outline Plan 38 projects in the zero VAT plan. "The change will allow service providers in these areas to deduct the inputs tax in invoices issued to them for retrofitting services, thereby increasing the worthwhileness of these projects," said the Tax Authority.

The Tama 38 plan, first introduced in 2005, allows building owners to strike deals with contractors to give them additional building rights in exchange for reinforcing older buildings against earthquakes. The Pinui Binui program creates a framework for tenants of older buildings to be rehoused while their homes are demolished and rebuilt, with the contractor receiving building rights for apartments he can sell. Under the new proposal, work done under either plans would benefit from exemption from the 18% VAT either for construction or demolition work.

Tuesday, June 17, 2014

French hotel family buys Sea One tower

Electra Real Estate Ltd. and Oranim Ltd. have closed the sale of the Sea One high-rise project on Tel Aviv's seafront to the French Amouyal family, which operates hotels including the Meridien in Eilat, for NIS 370 million.

They paid the buyer NIS 16 million in compensation for transaction costs, which Electra Real Estate will report in its financial statement. The two companies owned the project on Hayarkon Street in equal shares. Electra Real Estate will report NIS 98 million in cash flow from the sale, NIS 88 million of which it will use to repay the seller's loan it gave the buyer.

Wednesday, June 11, 2014

Foreign Jews buying in Israel to escape the taxman

The phenomenon of foreign residents buying homes in Israel, which has become increasingly prevalent in recent years, is not only because of Israel’s attractive real estate market. Another reason is new limitations on European and American bank accounts and the need to empty them so as to avoid pay taxes and fines on previously undeclared funds. For some Europeans, a crackdown in the European banking sector on undeclared assets is driving them to move their money, and sometimes the destination is Israel, according to tax lawyer Leor Nouman. In addition, American tax authorities are pursuing undeclared assets in accounts held by Americans outside the United States. Over the past two years, Israeli and European banks have pressured their American clients to either withdraw their money from banks or provide confirmation from the U.S. Internal Revenue Service that the funds on hand have been declared to the tax authorities.

This is all the result of American legislation, the Foreign Account Tax Compliance Act, which requires banks outside the U.S. to report accounts held by American citizens. Banks that fail to cooperate are subject to harsh sanctions. In Israel, companion legal provisions requiring banks to comply will take effect next month. An estimated 300,000 to 350,000 people in Israel have dual U.S. and Israeli citizenship. In addition to those who openly declare their overseas accounts to the American authorities, some, it is thought, have either transferred the funds held here into the names of non-American relatives or have withdrawn the funds and bought real estate in Israel.

Monday, May 5, 2014

Tel Aviv tops the market for luxury apartments

When it comes to apartment prices, Tel Aviv is tops, according to a survey of the global luxury real-estate scene published in the Wall Street Journal. The Candy Global Prime Sector Report rated Tel Aviv as the most expensive city in the up-and-coming luxury market sector, beating out cities like Miami, Chicago and Melbourne by a long way.

The cheapest city was Chennai, India, where an entry-level, two-bedroom luxury apartment cost around $160,000 in March. A similar apartment in Tel Aviv cost $1.45 million. The report considered both economic factors, such as job availability and GDP, and what it termed qualitative aspects. The latter included the availability of cultural attractions and the prevalence of English as a first or second language.

Monday, February 24, 2014

Former Hapoalim chairman sold flat in 1 Rotschild

Shlomo Nehama has sold a 700-square meter apartment covering the entire 16th floor in the 1 Rothschild Boulevard tower in Tel Aviv to a foreign resident for NIS 45 million. The former Bank Hapoalim chairman owns another apartment on half of the building's 15th floor, where he reportedly intends to reside.

According to sources, at least five apartments in the project have been sold in the past three months by owners who had bought them on plan from the developer Habas HZ Investments Ltd in 2008-10. The sellers have made handsome profits.

Most of the other sales were of 300-square meter apartments for NIS 20-27 million, depending on the floor, and whether the apartment was sold in shell or completed condition. The average price is NIS 84,000 per square meter (ie. $24,000).