AMSTERDAM (Thomson Financial) - Kardan NV said it is to merge its Israeli real estate unit, Kardan Real Estate, with Delek Real Estate, creating one of the largest residential property developers in Israel.
The merged company will hold a land bank for approximately 7,000 housing units of which 1,600 are already under construction, the company said.
Mike Croall; mike.croall@thomson.com
Copyright Thomson Financial News Limited 2008. All rights reserved.
Monday, March 31, 2008
Subprime-stricken foreign buyers cooling on J'lem
Until recently, apartment buyers from overseas would say "the market in the holy city has no price." Nowadays real estate agents in the city say that even if this remains the case, there is a limit to what they actually are willing to pay.
Banks, assessors, brokers and even sellers are now admitting that the Jerusalem real estate party is on its last legs.
"We had an Arab house with construction rights and a 500-year-old carob tree on the property, the oldest in Israel, certified by the Agriculture Ministry," says Dalia Bikovitski, the RE/MAX franchise owner in the German Colony. "The house was on the market for a month, and sold for $560,000. In the past, there would be many contenders for a bargain like that, and the property would have sold within a week."
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This is a relatively quick sale nowadays. Two years ago, far higher-priced homes were sold within days. Properties in central Jerusalem neighborhoods - Talbieh, the German Colony and Rehavia - have nearly doubled in price in the last four years. In 2003, pre-state single-family Arab style homes in Talbieh and the German Colony went for $6,500 to $7,500 per square meter, and in 2007 they were going for $12,000 to $14,000 per square meter.
Normal apartments are currently selling for $7,000 to $8,000 per square meter, which is also an increase of tens of percent, partly due to the falling value of the dollar
Foreign residents waking up
Property deals in the second half of 2007 were closing at levels similar to the first half of 2007, as real estate price increases began slowing. The flow of overseas buyers has slowed greatly in recent months.
The primary explanation for this slowdown is the economic crisis in the U.S. and the collapse of the dollar. Nevertheless, there is a feeling among prospective apartment buyers that Jerusalem property owners are asking too much for exclusive homes.
"There certainly is a slowdown," one agent says. "There is a feeling that while foreign residents behaved naively in the past and bought just about anything for any price, they are now wiser."
Nevertheless, the slowdown has not been reflected in falling prices yet. Daniel Tal, is offering his home for sale for $2.5 million.
He sounds sure when he says that this is the price, and that he is not worried. The 700-square-meter home near Nahlaot has been on the market for four months, but he has not considered lowering his asking price.
Sellers and buyers of luxury real estate in Jerusalem have a big problem with the tribulations of the dollar exchange rate. There is a great deal of confusion, and both parties are trying to use it to their advantage.
"I have a property whose owners offered it for sale about 18 months ago based on 4.5 shekels to the dollar, and they are continuing to offer it at the same exchange rate," reports one realtor. "It's complete madness. And I have another seller who has raised the price of the property four times in the past month, from $120,000 to $150,000 now. It makes no sense. Sellers are going to have to get used to the new situation quickly, and lower prices."
But buyers are in no hurry to acclimatize to the shaky status of the dollar, either. The exclusive Jerusalem market has traditionally operated in dollars, mainly because a substantial proportion of its clientele have been ultra-Orthodox Americans. These refuse to accept the fact that sellers use shekels, and periodically update the dollar price for their properties.
"When I say that the price of an apartment is NIS 1.5 million, based on an exchange rate of NIS 4 to the dollar, this equals $375,000, but at the current exchange rate of NIS 3.5 to the dollar, the price is $430,000 - an additional $55,000. Foreign residents don't understand it, they think it is dishonest, that we are pulling the wool over their eyes," says one agent.
The result of this conflict is that the market is unsettled, buyers are furious at sellers over the price fluctuations, and deals fall through.
"Negotiations between a buyer and a seller are about the dollar," one bank manager confirms. "At the beginning of the year the dollar was trading at NIS 3.85 shekels, and it is now down to NIS 3.47, so the cost to the buyer is substantially higher.
"The dollar has dropped 18% against the shekel over the past year, a large amount for any buyer. This causes an overall slowdown," he says.
Banks, assessors, brokers and even sellers are now admitting that the Jerusalem real estate party is on its last legs.
"We had an Arab house with construction rights and a 500-year-old carob tree on the property, the oldest in Israel, certified by the Agriculture Ministry," says Dalia Bikovitski, the RE/MAX franchise owner in the German Colony. "The house was on the market for a month, and sold for $560,000. In the past, there would be many contenders for a bargain like that, and the property would have sold within a week."
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This is a relatively quick sale nowadays. Two years ago, far higher-priced homes were sold within days. Properties in central Jerusalem neighborhoods - Talbieh, the German Colony and Rehavia - have nearly doubled in price in the last four years. In 2003, pre-state single-family Arab style homes in Talbieh and the German Colony went for $6,500 to $7,500 per square meter, and in 2007 they were going for $12,000 to $14,000 per square meter.
Normal apartments are currently selling for $7,000 to $8,000 per square meter, which is also an increase of tens of percent, partly due to the falling value of the dollar
Foreign residents waking up
Property deals in the second half of 2007 were closing at levels similar to the first half of 2007, as real estate price increases began slowing. The flow of overseas buyers has slowed greatly in recent months.
The primary explanation for this slowdown is the economic crisis in the U.S. and the collapse of the dollar. Nevertheless, there is a feeling among prospective apartment buyers that Jerusalem property owners are asking too much for exclusive homes.
"There certainly is a slowdown," one agent says. "There is a feeling that while foreign residents behaved naively in the past and bought just about anything for any price, they are now wiser."
Nevertheless, the slowdown has not been reflected in falling prices yet. Daniel Tal, is offering his home for sale for $2.5 million.
He sounds sure when he says that this is the price, and that he is not worried. The 700-square-meter home near Nahlaot has been on the market for four months, but he has not considered lowering his asking price.
Sellers and buyers of luxury real estate in Jerusalem have a big problem with the tribulations of the dollar exchange rate. There is a great deal of confusion, and both parties are trying to use it to their advantage.
"I have a property whose owners offered it for sale about 18 months ago based on 4.5 shekels to the dollar, and they are continuing to offer it at the same exchange rate," reports one realtor. "It's complete madness. And I have another seller who has raised the price of the property four times in the past month, from $120,000 to $150,000 now. It makes no sense. Sellers are going to have to get used to the new situation quickly, and lower prices."
But buyers are in no hurry to acclimatize to the shaky status of the dollar, either. The exclusive Jerusalem market has traditionally operated in dollars, mainly because a substantial proportion of its clientele have been ultra-Orthodox Americans. These refuse to accept the fact that sellers use shekels, and periodically update the dollar price for their properties.
"When I say that the price of an apartment is NIS 1.5 million, based on an exchange rate of NIS 4 to the dollar, this equals $375,000, but at the current exchange rate of NIS 3.5 to the dollar, the price is $430,000 - an additional $55,000. Foreign residents don't understand it, they think it is dishonest, that we are pulling the wool over their eyes," says one agent.
The result of this conflict is that the market is unsettled, buyers are furious at sellers over the price fluctuations, and deals fall through.
"Negotiations between a buyer and a seller are about the dollar," one bank manager confirms. "At the beginning of the year the dollar was trading at NIS 3.85 shekels, and it is now down to NIS 3.47, so the cost to the buyer is substantially higher.
"The dollar has dropped 18% against the shekel over the past year, a large amount for any buyer. This causes an overall slowdown," he says.
Ashtrom plans new high-tech park in Haifa
Ashtrom Properties Ltd. (TASE:ASPR) and the Haifa Economic Corporation are planning a new high-tech park at the Haifa Bay compound. The high-tech park will be in the same format as Matam.
The new high-tech park is initially planned to cover between 20,000 square meters and 40,000 square meters. Haifa Mayor Yona Yahav brokered the deal between Ashtrom and Haifa Economic Corporation. The new high-tech park aims at creating jobs in the Haifa and Krayot area and for northern residents in general. Market sources estimate the investment in land at $70 million and the cost of construction at $60 million.
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The new high-tech park is initially planned to cover between 20,000 square meters and 40,000 square meters. Haifa Mayor Yona Yahav brokered the deal between Ashtrom and Haifa Economic Corporation. The new high-tech park aims at creating jobs in the Haifa and Krayot area and for northern residents in general. Market sources estimate the investment in land at $70 million and the cost of construction at $60 million.
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Securities Authority requests $1 billion valuation explanation
The Israel Securities Authority has demanded clarifications from Electra Ltd. (TASE: ELTR) and Pangaea Real Estate Ltd. (TASE:PNGD) regarding their announcement yesterday that land they bought in Saint Petersburg, Russia, for $100 million in November 2007 was now given a value of $1 billion by Cushman and Wakefield.
The 600-acre section of agricultural land is located 15 kilometers from downtown Saint Petersburg. The Securities Authority has demanded documents relating to the land and the valuation, in view of the ten-fold rise in value in just six months.
Pangaea's share rose 24% yesterday and Electra's rose 3.6%.
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The 600-acre section of agricultural land is located 15 kilometers from downtown Saint Petersburg. The Securities Authority has demanded documents relating to the land and the valuation, in view of the ten-fold rise in value in just six months.
Pangaea's share rose 24% yesterday and Electra's rose 3.6%.
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Gertler family expands Tel Aviv hotel holdings
The Blue Circle Hotels Ltd., owned by the German-Jewish Gertler family, has bought the Tel Aviv Mercure Hotel at 14 Ben Yehuda Street from Avner Levy for $16.6 million on the basis of a maximum shekel-dollar exchange rate of NIS 4/$.
The four-star Mercure, a business hotel that is one of Tel Aviv newest hotels, opened last year. It has 103 rooms on 12 floors and is managed by the French Mercure hotel chain.
With this acquisition, the Gertlers become influential players in the Israeli hotel industry. They own 40% of the 270-room Tel Aviv Carlton and half of the 250-room Tel Aviv Metropole. The Gertlers' partners in these hotels are other European Jewish families. In August, the Gertlers will reopen the Tel Aviv Savoy Hotel on Geula Street. The 60-room hotel has been renovated, two floors have been added, and it has been rebranded as a boutique hotel. The hotel was the site of a terrorist attack in March 1975.
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The four-star Mercure, a business hotel that is one of Tel Aviv newest hotels, opened last year. It has 103 rooms on 12 floors and is managed by the French Mercure hotel chain.
With this acquisition, the Gertlers become influential players in the Israeli hotel industry. They own 40% of the 270-room Tel Aviv Carlton and half of the 250-room Tel Aviv Metropole. The Gertlers' partners in these hotels are other European Jewish families. In August, the Gertlers will reopen the Tel Aviv Savoy Hotel on Geula Street. The 60-room hotel has been renovated, two floors have been added, and it has been rebranded as a boutique hotel. The hotel was the site of a terrorist attack in March 1975.
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Sunday, March 30, 2008
Electra-Pangaea Russia property value increases to $1b
Electra Ltd. and Pangaea Real Estate Ltd. bought the land for $100 million six months ago.
Electra Ltd. (TASE: ELTR) and Pangaea Real Estate Ltd. (TASE:PNGD) have obtained a valuation of $1 billion from Cushman & Wakefield for a 600-acre piece of land in Saint Petersburg, Russia. The two companies bought the land in November 2007 for $100 million through a Russian joint venture that they own in equal shares.
Cushman & Wakefield valued the land at between $977 million and $1.06 billion, depending on varying assumptions. The companies explicitly stated that the valuation is based on methods that are not submissible for accounting purposes, and will not be included in asset valuations in their financial reports. The purpose of the valuation is for marketing parts of the land to potential buyers.
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Electra Ltd. (TASE: ELTR) and Pangaea Real Estate Ltd. (TASE:PNGD) have obtained a valuation of $1 billion from Cushman & Wakefield for a 600-acre piece of land in Saint Petersburg, Russia. The two companies bought the land in November 2007 for $100 million through a Russian joint venture that they own in equal shares.
Cushman & Wakefield valued the land at between $977 million and $1.06 billion, depending on varying assumptions. The companies explicitly stated that the valuation is based on methods that are not submissible for accounting purposes, and will not be included in asset valuations in their financial reports. The purpose of the valuation is for marketing parts of the land to potential buyers.
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Alrov expands in Japan
The company provided a Japanese company with a loan to buy two income-producing properties under construction in Tokyo.
Alrov (Israel) Ltd. (TASE: ALRO) subsidiary Alrov Properties and Lodgings Ltd. (TASE: ALRPR), controlled by chairman Alfred Akirov, will provide a Japanese company with a NIS 144 million loan to buy two income-producing properties under construction in Tokyo. The deal is being carried out through Alrov Properties subsidiary PIH Japan BV, in which Alrov owns 75%.
PIH has paid the seller an NIS 6.85 million down payment, and will pay an additional NIS 6.85 million in September 2008, and the balance when the properties are transferred. The payments will be guaranteed in the event that the seller fails to meet his contractual commitments.
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Alrov (Israel) Ltd. (TASE: ALRO) subsidiary Alrov Properties and Lodgings Ltd. (TASE: ALRPR), controlled by chairman Alfred Akirov, will provide a Japanese company with a NIS 144 million loan to buy two income-producing properties under construction in Tokyo. The deal is being carried out through Alrov Properties subsidiary PIH Japan BV, in which Alrov owns 75%.
PIH has paid the seller an NIS 6.85 million down payment, and will pay an additional NIS 6.85 million in September 2008, and the balance when the properties are transferred. The payments will be guaranteed in the event that the seller fails to meet his contractual commitments.
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Tagor Capital launches Romanian investment fund
Tagor Capital Ltd.
has signed an MOU with an international company to set up a joint venture that will develop and operate shopping centers in Romania at an investment of €100 million. Each party will own half of the venture.
Tagor Capital will also expand its year-old financial collaboration with Patron Capital Ltd., an international REIT, which has €1 billion under management. The companies doubled their joint venture to develop residential and commercial properties in Romania by €56 million to €112 million.
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has signed an MOU with an international company to set up a joint venture that will develop and operate shopping centers in Romania at an investment of €100 million. Each party will own half of the venture.
Tagor Capital will also expand its year-old financial collaboration with Patron Capital Ltd., an international REIT, which has €1 billion under management. The companies doubled their joint venture to develop residential and commercial properties in Romania by €56 million to €112 million.
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Office rents rise in Tel Aviv
Israel is near the middle of a Cushman & Wakefield ranking.
The global economic crisis has not yet affected prime office rent. The 2008 "Office Space Across the World" by Cushman & Wakefield shows a 14% rise in office rent worldwide in 2007, following a 10% rise in 2006. "In 2007, 90% of the countries and 79% of the locations surveyed showed rental growth. Only three locations, or 1% of the sample, showed a rental fall this year, with the remainder experiencing stable conditions."
Israel is ranked 32nd in the 2008 survey, compared with 39th place in the 2007 survey. Israel's prime office space is the central business district of Tel Aviv.
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The global economic crisis has not yet affected prime office rent. The 2008 "Office Space Across the World" by Cushman & Wakefield shows a 14% rise in office rent worldwide in 2007, following a 10% rise in 2006. "In 2007, 90% of the countries and 79% of the locations surveyed showed rental growth. Only three locations, or 1% of the sample, showed a rental fall this year, with the remainder experiencing stable conditions."
Israel is ranked 32nd in the 2008 survey, compared with 39th place in the 2007 survey. Israel's prime office space is the central business district of Tel Aviv.
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Foreigners continue to buy Israeli real estate
The slump in the dollar has not yet affected foreign investment in Israeli real estate.
The slump in the dollar has not yet affected foreign investment in Israeli real estate. Diaspora Jews, especially from the US, UK, and France are continuing to buy apartments either as residences or for investment.
The Bank of Israel reports that foreign residents bought $93 million worth of real estate in February 2008, compared with $167 million in January. The central bank notes the monthly drop in investment, but also notes the lower number of business days in February.
Foreign investors bought $260 million worth of real estate in January-February, an annualized amount of $1.56 billion, about the same level as in 2007. Foreign investment in real estate totaled $4.1 billion in 2005-07.
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The slump in the dollar has not yet affected foreign investment in Israeli real estate. Diaspora Jews, especially from the US, UK, and France are continuing to buy apartments either as residences or for investment.
The Bank of Israel reports that foreign residents bought $93 million worth of real estate in February 2008, compared with $167 million in January. The central bank notes the monthly drop in investment, but also notes the lower number of business days in February.
Foreign investors bought $260 million worth of real estate in January-February, an annualized amount of $1.56 billion, about the same level as in 2007. Foreign investment in real estate totaled $4.1 billion in 2005-07.
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Gertler family expands Tel Aviv hotel holdings
Blue Circle Hotels has bought the Mercure hotel and is reopening the Savoy.
The Blue Circle Hotels Ltd., owned by the German-Jewish Gertler family, has bought the Tel Aviv Mercure Hotel at 14 Ben Yehuda Street from Avner Levy for $16.6 million on the basis of a maximum shekel-dollar exchange rate of NIS 4/$.
The four-star Mercure, a business hotel that is one of Tel Aviv newest hotels, opened last year. It has 103 rooms on 12 floors and is managed by the French Mercure hotel chain.
With this acquisition, the Gertlers become influential players in the Israeli hotel industry. They own 40% of the 270-room Tel Aviv Carlton and half of the 250-room Tel Aviv Metropole. The Gertlers' partners in these hotels are other European Jewish families. In August, the Gertlers will reopen the Tel Aviv Savoy Hotel on Geula Street. The 60-room hotel has been renovated, two floors have been added, and it has been rebranded as a boutique hotel. The hotel was the site of a terrorist attack in March 1975.
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The Blue Circle Hotels Ltd., owned by the German-Jewish Gertler family, has bought the Tel Aviv Mercure Hotel at 14 Ben Yehuda Street from Avner Levy for $16.6 million on the basis of a maximum shekel-dollar exchange rate of NIS 4/$.
The four-star Mercure, a business hotel that is one of Tel Aviv newest hotels, opened last year. It has 103 rooms on 12 floors and is managed by the French Mercure hotel chain.
With this acquisition, the Gertlers become influential players in the Israeli hotel industry. They own 40% of the 270-room Tel Aviv Carlton and half of the 250-room Tel Aviv Metropole. The Gertlers' partners in these hotels are other European Jewish families. In August, the Gertlers will reopen the Tel Aviv Savoy Hotel on Geula Street. The 60-room hotel has been renovated, two floors have been added, and it has been rebranded as a boutique hotel. The hotel was the site of a terrorist attack in March 1975.
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Tshuva sells Eilat hotels
Fattal Hotel Management bought the Golden Tulip Club and Golden Tulip Privilege for $60 million.
Fattal Hotel Management Ltd. has bought the Golden Tulip Club and Golden Tulip Privilege hotels in Eilat from Yitzhak Tshuva for $60 million. The purchases increases Fattal Hotel Management's chain of hotels to 20.
The 282-room Golden Tulip Club was built in 1995, and has been managed by Fattal since 2001. The hotel was renovated four years ago, and a water park, banquet halls, Internet room, library and new restaurant were added.
The 247-room Golden Tulip Privilege is a stolid hotel with no entertainment staff that gives its guests a quiet vacation with an emphasis on health activities.
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Fattal Hotel Management Ltd. has bought the Golden Tulip Club and Golden Tulip Privilege hotels in Eilat from Yitzhak Tshuva for $60 million. The purchases increases Fattal Hotel Management's chain of hotels to 20.
The 282-room Golden Tulip Club was built in 1995, and has been managed by Fattal since 2001. The hotel was renovated four years ago, and a water park, banquet halls, Internet room, library and new restaurant were added.
The 247-room Golden Tulip Privilege is a stolid hotel with no entertainment staff that gives its guests a quiet vacation with an emphasis on health activities.
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Ashtrom plans new high-tech park in Haifa
Market sources estimate the investment in land at $70 million and the cost of construction at $60 million.
Ashtrom Properties Ltd. (TASE:ASPR) and the Haifa Economic Corporation are planning a new high-tech park at the Haifa Bay compound. The high-tech park will be in the same format as Matam.
The new high-tech park is initially planned to cover between 20,000 square meters and 40,000 square meters. Haifa Mayor Yona Yahav brokered the deal between Ashtrom and Haifa Economic Corporation. The new high-tech park aims at creating jobs in the Haifa and Krayot area and for northern residents in general. Market sources estimate the investment in land at $70 million and the cost of construction at $60 million.
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Ashtrom Properties Ltd. (TASE:ASPR) and the Haifa Economic Corporation are planning a new high-tech park at the Haifa Bay compound. The high-tech park will be in the same format as Matam.
The new high-tech park is initially planned to cover between 20,000 square meters and 40,000 square meters. Haifa Mayor Yona Yahav brokered the deal between Ashtrom and Haifa Economic Corporation. The new high-tech park aims at creating jobs in the Haifa and Krayot area and for northern residents in general. Market sources estimate the investment in land at $70 million and the cost of construction at $60 million.
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Euro Trade buys land in the Netherlands
The company will finance 86% of the deal with a five-year loan from a European bank.
Euro Trade Real Estate International (YTB) Ltd. (TASE:ERTR.B1) and a group of other investors have jointly purchased an office building in Groningen in the north of the Netherlands for €27 million. This is Euro Trade's second deal in a week, after it announced it had signed a memorandum of understanding to purchase a property in the town of Zoetermee for €4.4 million. The company will finance 86% of the deal with a five-year loan from a European bank bearing an annual interest rate of 5.5%. Euro Trade will own half the property and the other investors the will own the rest.
Euro Trade locates, purchases and upgrades income-producing properties in Western Europe.
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Euro Trade Real Estate International (YTB) Ltd. (TASE:ERTR.B1) and a group of other investors have jointly purchased an office building in Groningen in the north of the Netherlands for €27 million. This is Euro Trade's second deal in a week, after it announced it had signed a memorandum of understanding to purchase a property in the town of Zoetermee for €4.4 million. The company will finance 86% of the deal with a five-year loan from a European bank bearing an annual interest rate of 5.5%. Euro Trade will own half the property and the other investors the will own the rest.
Euro Trade locates, purchases and upgrades income-producing properties in Western Europe.
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JEC in talks to buy property in France
The Fishman subsidiary completed the purchase of another seven properties in France.
is in advanced talks to buy a property in Nantes, France, for €17.3 million in a buy and lease-back deal. The 15,244-square meter property is located on a 20-acre site. Annual rent is €1.52 million, giving a return on investment of 8.8%.
JEC is in talks with a financial institution for a non-recourse loan for 84% of the purchase price.
In a separate development, JEC completed the purchase of seven properties in France with aggregate space of 221,500 square meters for €72.8 million. The properties will generate a return on investment of 9%. JEC's French properties account for 15% of its revenue.
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is in advanced talks to buy a property in Nantes, France, for €17.3 million in a buy and lease-back deal. The 15,244-square meter property is located on a 20-acre site. Annual rent is €1.52 million, giving a return on investment of 8.8%.
JEC is in talks with a financial institution for a non-recourse loan for 84% of the purchase price.
In a separate development, JEC completed the purchase of seven properties in France with aggregate space of 221,500 square meters for €72.8 million. The properties will generate a return on investment of 9%. JEC's French properties account for 15% of its revenue.
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British Israel posted a net profit of NIS 291.7 million on NIS 889.1 million revenue in 2007.
British-Israel Investments Ltd. (TASE: BRTS), controlled by Leo Noe, today published its financial report for the fourth quarter of 2007 and for the year as a whole. The shopping center owner had a record year in revenue, cash flow, and net profit after a busy year of acquisitions. The company will distribute a dividend of NIS 12 million.
British Israel posted a net profit of NIS 291.7 million on NIS 889.1 million revenue in 2007, compared with a net profit NIS 247.2 million on NIS 556.3 million revenue in 2006. Net operating income (NOI) rose 64% to NIS 305 million in 2007 from NIS 186 million the year before. Financing expenses also rose 77% to NIS 310 million from NIS 174.8 million.
During the year, British Israel bought half of the Hadar Mall in Jerusalem for $31 million, the Rehovot Mall for NIS 410 million, the Hasharon Mall in Netanya for NIS 344 million, and other properties for an aggregate NIS 1.8 billion. The company also bought the Crystal House in Ramat Gan for NIS 155 million, and sold it five months later for NIS $199 million. The balance of income-producing properties rose to NIS 5.4 billion at the end of 2007 from NIS 3 billion a year earlier.
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British Israel posted a net profit of NIS 291.7 million on NIS 889.1 million revenue in 2007, compared with a net profit NIS 247.2 million on NIS 556.3 million revenue in 2006. Net operating income (NOI) rose 64% to NIS 305 million in 2007 from NIS 186 million the year before. Financing expenses also rose 77% to NIS 310 million from NIS 174.8 million.
During the year, British Israel bought half of the Hadar Mall in Jerusalem for $31 million, the Rehovot Mall for NIS 410 million, the Hasharon Mall in Netanya for NIS 344 million, and other properties for an aggregate NIS 1.8 billion. The company also bought the Crystal House in Ramat Gan for NIS 155 million, and sold it five months later for NIS $199 million. The balance of income-producing properties rose to NIS 5.4 billion at the end of 2007 from NIS 3 billion a year earlier.
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Pangea revenue jumps
Real estate developer Pangaea Real Estate Ltd. (TASE:PNGD) today published its financial report for the fourth quarter of 2007 and the year as a whole. The company's revenue for 2007 increased almost seven-fold to NIS 63.38 million from NIS 9.07 million in 2006. The increase resulted primarily from the sales of property which generated NIS 42.9 million in revenue, as well rental income which rose to NIS 9.62 million in 2007 from NIS 2.58 million a year earlier.
Pangaea also saw an increase in its various expenditure items, which totaled NIS 30.85 million in 2007 compared with NIS 7.27 million in 2006. Financing costs were the highest of all, increasing to more than NIS 18 million in 2007, from NIS 4.25 million a year earlier.
Net profit for the year soared to NIS 22 million, $1.65 per share, from NIS 1.4 million, $0.12 per share in 2006.
Pangaea's share soared 30.5% yesterday after it was disclosed that the company had obtained an estimate from global real estate services company Cushman & Wakefield for a 600-acre plot in Saint Petersburg, Russia, which gave a valuation of $1 billion, tenfold the price the two companies paid for the land. Pangaea will nevertheless record the asset on a cost basis in its financial report, since the valuation is inadmissible as an item in a financial statement.
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Pangaea also saw an increase in its various expenditure items, which totaled NIS 30.85 million in 2007 compared with NIS 7.27 million in 2006. Financing costs were the highest of all, increasing to more than NIS 18 million in 2007, from NIS 4.25 million a year earlier.
Net profit for the year soared to NIS 22 million, $1.65 per share, from NIS 1.4 million, $0.12 per share in 2006.
Pangaea's share soared 30.5% yesterday after it was disclosed that the company had obtained an estimate from global real estate services company Cushman & Wakefield for a 600-acre plot in Saint Petersburg, Russia, which gave a valuation of $1 billion, tenfold the price the two companies paid for the land. Pangaea will nevertheless record the asset on a cost basis in its financial report, since the valuation is inadmissible as an item in a financial statement.
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New properties increase Gazit-Globe rental income
Gazit-Globe Ltd. (TASE: GLOB) today published its consolidated financial report for the fourth quarter of 2007 and for the year as a whole. These are the first results on the basis of fair value valuations in accordance with International Financial Reporting Standards (IFRS). The company's rental revenue rose 18% in 2007 to NIS 3.6 billion. Most of the increase was due to net new purchases of properties during the year. The company will distribute a dividend of at least NIS 1.20 per share.
Gazit-Globe's net operating income rose 20% to NIS 2.4 billion in 2007 from NIS 2 billion in 2006. Funds from operations (FFO) rose 34% to NIS 305 million (NIS 2.57 per share) in 2007 from NIS 229 million in 2006. Net profit totaled NIS 2.27 billion in 2007, 18% less than the NIS 2.77 billion in 2006. The company attributes the erosion to higher property revaluations in 2006. The net profit accruing to Gazit-Globe after deducing accruals to minority shareholders was NIS 983 million (NIS 8.32 per share), a total amount that was unchanged on a year earlier.
The company posted NIS 961 million revenue from rent and NIS 108 million from the sale of properties in the fourth quarter. NOI totaled NIS 636 million, net profit was NIS 208 million and net profit to Gazit-Globe shareholders was NIS 76 million.
Gazit-Globe owns 465 properties altogether through its subsidiaries with a total area of 4.7 million square meters, and which are booked at a value of NIS 44.4 billion. The gross annual rent from those properties totals NIS 3.8 billion. The company's investments increased to NIS 7.3 billion in 2007 from NIS 5.2 billion in 2006. The company also raised NIS 1.4 billion in share capital during 2007, the same amount as a year earlier. The company has 23 properties under development and 27 properties under redevelopment at the end of the year, at a total estimated cost of NIS 3.7 billion.
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Gazit-Globe's net operating income rose 20% to NIS 2.4 billion in 2007 from NIS 2 billion in 2006. Funds from operations (FFO) rose 34% to NIS 305 million (NIS 2.57 per share) in 2007 from NIS 229 million in 2006. Net profit totaled NIS 2.27 billion in 2007, 18% less than the NIS 2.77 billion in 2006. The company attributes the erosion to higher property revaluations in 2006. The net profit accruing to Gazit-Globe after deducing accruals to minority shareholders was NIS 983 million (NIS 8.32 per share), a total amount that was unchanged on a year earlier.
The company posted NIS 961 million revenue from rent and NIS 108 million from the sale of properties in the fourth quarter. NOI totaled NIS 636 million, net profit was NIS 208 million and net profit to Gazit-Globe shareholders was NIS 76 million.
Gazit-Globe owns 465 properties altogether through its subsidiaries with a total area of 4.7 million square meters, and which are booked at a value of NIS 44.4 billion. The gross annual rent from those properties totals NIS 3.8 billion. The company's investments increased to NIS 7.3 billion in 2007 from NIS 5.2 billion in 2006. The company also raised NIS 1.4 billion in share capital during 2007, the same amount as a year earlier. The company has 23 properties under development and 27 properties under redevelopment at the end of the year, at a total estimated cost of NIS 3.7 billion.
© Copyright of Globes Publisher
Proposed law would reduce tax near construction sites
The Israel Federation of Independent Organizations and Tel Aviv deputy mayor Arnon Giladi are promoting legislation which if passed into law, will make traders located near a site where infrastructure works have been ongoing for more than 30 days eligible for a discount of up to 25% on local property tax.
Under the proposal, the rate of property tax charged to the trader while work is in progress will not exceed 75% of the annual charge. The size of the discount will be determined by the type and duration of the work in progress, the extent to which it is disrupting trading.
© Copyright of Globes
Under the proposal, the rate of property tax charged to the trader while work is in progress will not exceed 75% of the annual charge. The size of the discount will be determined by the type and duration of the work in progress, the extent to which it is disrupting trading.
© Copyright of Globes
South Tel Aviv gets upgrade plan including towers
The Tel Aviv Local Planning and Building Commission has approved a number of important building plans for south Tel Aviv. One plan calls for the construction of offices at the Heresh compound along the Ayalon. The lot will be dividend into two sections: one 50-dunam (12.5-acre) section between the La Guardia overpass and the Hahagana overpass; and the second 35-dunam (8.75-acre) section from the Hahagana overpass to Heyl Hashirion St.
This plan allows 450% building rights of main space, 40% service space, and a four-floor parking garage. The section will be divided to lots with connecting pedestrian walkways, public squares, and covered passageways. Six 15-40 storey buildings with 115,000 square meters of aggregate space can be built on the first section, and seven 10-35 storey buildings with 180,000 square meters of aggregate space can be built on the second section
Tel Aviv Local Planning Commission chairman Doron Sapir said that it had approved in principle the plan's principles, but that transportation problems still remained. The city engineer will therefore formulate a plan for construction in stages, subject to solving the transportation problems.
The Tel Aviv Local Planning Commission also approved a plan for a vacate-and-build project along Levinsky Street, near the new Central Bus Station. The plan includes two 30-storey mixed-use high-rises with residences on the upper floors. The current buildings on the site are mainly industrial and commercial buildings, some of which are quite dilapidated.
Published by Globes [online]
This plan allows 450% building rights of main space, 40% service space, and a four-floor parking garage. The section will be divided to lots with connecting pedestrian walkways, public squares, and covered passageways. Six 15-40 storey buildings with 115,000 square meters of aggregate space can be built on the first section, and seven 10-35 storey buildings with 180,000 square meters of aggregate space can be built on the second section
Tel Aviv Local Planning Commission chairman Doron Sapir said that it had approved in principle the plan's principles, but that transportation problems still remained. The city engineer will therefore formulate a plan for construction in stages, subject to solving the transportation problems.
The Tel Aviv Local Planning Commission also approved a plan for a vacate-and-build project along Levinsky Street, near the new Central Bus Station. The plan includes two 30-storey mixed-use high-rises with residences on the upper floors. The current buildings on the site are mainly industrial and commercial buildings, some of which are quite dilapidated.
Published by Globes [online]
Tao to sell Eilat mall stake
Tao and Phoenix jointly bought 50% of the mall in 2006 from Eli Israeli at a value of NIS 925 million.
Tao Tsuot Ltd. (TASE: TAO-M) subsidiary Tao Tsuot Real Estate Ltd. is in talks to sell its entire share in the 50% stake it jointly with Israel Phoenix Assurance (TASE: PHOE1;PHOE5) owns in the Mul Hayam mall in Eilat. The company expects to sell its share for it NIS 80 million, net of commitments and liabilities.
Tao and Phoenix jointly bought 50% of the mall at the end of 2006 from Ofek Assets, Investments and Development Ltd. co-owner and CEO Eli Israeli at a value of NIS 925 million
Published by Globes [online],
Tao Tsuot Ltd. (TASE: TAO-M) subsidiary Tao Tsuot Real Estate Ltd. is in talks to sell its entire share in the 50% stake it jointly with Israel Phoenix Assurance (TASE: PHOE1;PHOE5) owns in the Mul Hayam mall in Eilat. The company expects to sell its share for it NIS 80 million, net of commitments and liabilities.
Tao and Phoenix jointly bought 50% of the mall at the end of 2006 from Ofek Assets, Investments and Development Ltd. co-owner and CEO Eli Israeli at a value of NIS 925 million
Published by Globes [online],
Foreigners continue to buy Israeli real estate
The slump in the dollar has not yet affected foreign investment in Israeli real estate. Diaspora Jews, especially from the US, UK, and France are continuing to buy apartments either as residences or for investment.
The Bank of Israel reports that foreign residents bought $93 million worth of real estate in February 2008, compared with $167 million in January. The central bank notes the monthly drop in investment, but also notes the lower number of business days in February.
Foreign investors bought $260 million worth of real estate in January-February, an annualized amount of $1.56 billion, about the same level as in 2007. Foreign investment in real estate totaled $4.1 billion in 2005-07.
Published by Globes [online]
The Bank of Israel reports that foreign residents bought $93 million worth of real estate in February 2008, compared with $167 million in January. The central bank notes the monthly drop in investment, but also notes the lower number of business days in February.
Foreign investors bought $260 million worth of real estate in January-February, an annualized amount of $1.56 billion, about the same level as in 2007. Foreign investment in real estate totaled $4.1 billion in 2005-07.
Published by Globes [online]
Wednesday, March 5, 2008
Squares in a round hole
Around the world there are squares and plazas that have become national symbols - Beijing's Tiananmen Square and Moscow's Red Square - while others are must-see places on any visit to their cities: Trafalgar Square in London and Piazza Navona in Rome. In Israel, however, despite a few modest successes here and there, it is hard to point out such sites.
In recent years many local developers - some by choice and others not - have built plazas near the projects they have completed. In most cases the results are a failure. One such example is the plaza at the entrance to the Pelephone building in Givatayim: anyone who does not have business in the building will never go there.
Architect Eran Tamir-Tawil, who writes a Hebrew blog on the arsitectura site, claims that that particular plaza may not even be a real square, as it is just open space in front of the building, and not an active square. It is above a parking lot, has hardly any landscaping or greenery, no public functions and no real life of its own.
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"Building percentage restrictions and the desire to gain extra space," says Tamir-Tawil, "lead [planners] to play games with levels and a series of ramps, like at the plaza beside Beit Asia in Tel Aviv, which is a missed opportunity.
"The reason squares (kikar in Hebrew) in Israel are less prominent and impressive than abroad," continues Tamir-Tawil, "is the distance between houses in Israeli cities.
"In Israel, unlike Europe, there is space between all the buildings, so we don't need a square to achieve perspectives of open space. When cities are crowded, as they are in Europe, the square stands in dramatic contrast to the closedness around it."
In Israel the "square" concept is over used, even when the space in question does not fit the description. Very few squares in Israel fulfill their urban purpose successfully, and there are plenty of examples of failures.
Kikar Atarim is a case in point. It is not frequented as a meeting place and is an uninviting spot in the heart of Tel Aviv.
Tamir-Tawil believes that Kikar Atarim suffers from the same problem as Place de la Bonne Heure, on the border of Tel Aviv-Jaffa.
"The architects who designed them never intended to create a square," explains Tamir-Tawil, "but rather to find a solution for the parking lot - and therefore did not succeed in making a successful square." Place de la Bonne Heure, beside the Dan Panorama hotel, should have been part of a series of raised plazas, above parking lots, that were planned as the heart of the main urban center in the Menashiya neighborhood. The square was designed by architects Amnon Niv, Amnon Schwartz and Danny Schwartz. Despite its poetic name, Place de la Bonne Heure is a lifeless, inaccessible site. There is a good chance that you have passed it on several occasions and never known you were there.
Tamir-Tawil thinks the problem with Kikar Atarim and Place de la Bonne Heure is similar to that of Kikar Dizengoff, also in Tel Aviv.
"With all three of them, the traffic solution was more important and the square is only part of the total plan. During that period, the 1960s and 1970s, architects believed it was possible to raise the level of the street to the fourth floor and that human activity would manage to bridge the gap. They thought that passersby would make the effort. This optimism and naivete did not prove true, and this problem is not unique to Israel. This assumption was prevalent elsewhere, and there, too, proved incorrect."
Kikar Dizengoff in its current incarnation was planned by architect Tsvi Lissar, of Lissar Architects and City Planners. Lissar insists that the criticism of the design stems from a nostalgic perspective that is cut off from reality. Even so, Lissar does not hide the fact that the traffic arrangements played a central role in the planning process. Among other things, he relates that the depth of the square's foundations was calculated in keeping with a plan for a subway train with a station in the plaza of nearby Chen Cinema. Lissar feels there is no need to tear down the square, but rather just make some changes and adjustments.
"Of course I would do all sorts of things differently now," says Lissar, "but I think the concept is good even today. The square's weak spot is the pedestrian crossings of Dizengoff, Pinsker and Reines Streets, which in the original plan were next to the square, but were moved away by orders of the Transportation Ministry.
"There are two large streets beside the square that create a continuum. These are places with piazza qualities (small, attractive squares that are very common in Italy) - that were never turned into such due to business considerations. I think the area around the square should be made into a cultural center. Bookstores and art galleries would make pleasant surroundings."
Lissar adds that he would also change the finishing materials.
"Kikar Dizengoff was inaugurated in 1978 and was built from the best materials available back then," continues Lissar. "Today I would change the finishing of the floor and use more durable materials. The original design included sunshades that were left out due to budgetary constraints. Returning Kikar Dizengoff to its previous state will create a virtual square. People will not come to the central area, which will be a traffic island separated from the circular sidewalk by a road. There will only be a sense of space, but the square will not function. Just like Kikar Hamedina."
Even people who disagree with the idea of razing Kikar Dizengoff do not think it is a role model. There is also no such dispute regarding Kikar Atarim. Unfortunately, it is harder to find examples of successful squares.
Tamir-Tawil says that the most successful square in Israel is the Western Wall plaza. It is an urban space that is almost always bustling with activity. Kikar Rabin is also a good square. It is important to remember that it was not intended as an active square, like a piazza, but as a monochromatic plaza it serves its purpose. Jerusalem's Zion Square and Kikar HaChatulim (Cat Square, behind Nahalat Sheva) are always busy, and are part of a successful urban system. "A good square needs easy access," explains Tamir-Tawil, "and activities around its edges and surroundings. The facades of the buildings facing the square are less crucial."
Lissar believes there is no formula for planning a square, and each instance is different. "A good square is influenced by its geometry, its surroundings," he says. "Some squares are built even before their surroundings. It is important to understand who comes to the square and how they get there. There is another component, which I call the street connection. People walk along the street and stop to meet other people, or to watch, and experiences area created that depend on the surroundings. "Some people contend that a square must be on the level, with the street, but that is a matter for debate. Today, when you stand on top of Kikar Dizengoff, you see the buildings and the cars passing beneath the square and coming out the other side. This is a different type of experience." Lissar offers the example of the square beside the Ordea cinema in Ramat Gan as a successful square. "The rectangular square is connected with a road; there is a synagogue on one side and a road that is closed on Shabbat, becoming part of the sidewalk. That is a square with a human element." So what can be done to improve Israel's squares? Tamir-Tawil says it starts with the planning. "A square's success depends on its really being wanted from the outset, and not as an afterthought or byproduct of something else. A good square, in other words, is a goal in its own right."
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In recent years many local developers - some by choice and others not - have built plazas near the projects they have completed. In most cases the results are a failure. One such example is the plaza at the entrance to the Pelephone building in Givatayim: anyone who does not have business in the building will never go there.
Architect Eran Tamir-Tawil, who writes a Hebrew blog on the arsitectura site, claims that that particular plaza may not even be a real square, as it is just open space in front of the building, and not an active square. It is above a parking lot, has hardly any landscaping or greenery, no public functions and no real life of its own.
Advertisement
"Building percentage restrictions and the desire to gain extra space," says Tamir-Tawil, "lead [planners] to play games with levels and a series of ramps, like at the plaza beside Beit Asia in Tel Aviv, which is a missed opportunity.
"The reason squares (kikar in Hebrew) in Israel are less prominent and impressive than abroad," continues Tamir-Tawil, "is the distance between houses in Israeli cities.
"In Israel, unlike Europe, there is space between all the buildings, so we don't need a square to achieve perspectives of open space. When cities are crowded, as they are in Europe, the square stands in dramatic contrast to the closedness around it."
In Israel the "square" concept is over used, even when the space in question does not fit the description. Very few squares in Israel fulfill their urban purpose successfully, and there are plenty of examples of failures.
Kikar Atarim is a case in point. It is not frequented as a meeting place and is an uninviting spot in the heart of Tel Aviv.
Tamir-Tawil believes that Kikar Atarim suffers from the same problem as Place de la Bonne Heure, on the border of Tel Aviv-Jaffa.
"The architects who designed them never intended to create a square," explains Tamir-Tawil, "but rather to find a solution for the parking lot - and therefore did not succeed in making a successful square." Place de la Bonne Heure, beside the Dan Panorama hotel, should have been part of a series of raised plazas, above parking lots, that were planned as the heart of the main urban center in the Menashiya neighborhood. The square was designed by architects Amnon Niv, Amnon Schwartz and Danny Schwartz. Despite its poetic name, Place de la Bonne Heure is a lifeless, inaccessible site. There is a good chance that you have passed it on several occasions and never known you were there.
Tamir-Tawil thinks the problem with Kikar Atarim and Place de la Bonne Heure is similar to that of Kikar Dizengoff, also in Tel Aviv.
"With all three of them, the traffic solution was more important and the square is only part of the total plan. During that period, the 1960s and 1970s, architects believed it was possible to raise the level of the street to the fourth floor and that human activity would manage to bridge the gap. They thought that passersby would make the effort. This optimism and naivete did not prove true, and this problem is not unique to Israel. This assumption was prevalent elsewhere, and there, too, proved incorrect."
Kikar Dizengoff in its current incarnation was planned by architect Tsvi Lissar, of Lissar Architects and City Planners. Lissar insists that the criticism of the design stems from a nostalgic perspective that is cut off from reality. Even so, Lissar does not hide the fact that the traffic arrangements played a central role in the planning process. Among other things, he relates that the depth of the square's foundations was calculated in keeping with a plan for a subway train with a station in the plaza of nearby Chen Cinema. Lissar feels there is no need to tear down the square, but rather just make some changes and adjustments.
"Of course I would do all sorts of things differently now," says Lissar, "but I think the concept is good even today. The square's weak spot is the pedestrian crossings of Dizengoff, Pinsker and Reines Streets, which in the original plan were next to the square, but were moved away by orders of the Transportation Ministry.
"There are two large streets beside the square that create a continuum. These are places with piazza qualities (small, attractive squares that are very common in Italy) - that were never turned into such due to business considerations. I think the area around the square should be made into a cultural center. Bookstores and art galleries would make pleasant surroundings."
Lissar adds that he would also change the finishing materials.
"Kikar Dizengoff was inaugurated in 1978 and was built from the best materials available back then," continues Lissar. "Today I would change the finishing of the floor and use more durable materials. The original design included sunshades that were left out due to budgetary constraints. Returning Kikar Dizengoff to its previous state will create a virtual square. People will not come to the central area, which will be a traffic island separated from the circular sidewalk by a road. There will only be a sense of space, but the square will not function. Just like Kikar Hamedina."
Even people who disagree with the idea of razing Kikar Dizengoff do not think it is a role model. There is also no such dispute regarding Kikar Atarim. Unfortunately, it is harder to find examples of successful squares.
Tamir-Tawil says that the most successful square in Israel is the Western Wall plaza. It is an urban space that is almost always bustling with activity. Kikar Rabin is also a good square. It is important to remember that it was not intended as an active square, like a piazza, but as a monochromatic plaza it serves its purpose. Jerusalem's Zion Square and Kikar HaChatulim (Cat Square, behind Nahalat Sheva) are always busy, and are part of a successful urban system. "A good square needs easy access," explains Tamir-Tawil, "and activities around its edges and surroundings. The facades of the buildings facing the square are less crucial."
Lissar believes there is no formula for planning a square, and each instance is different. "A good square is influenced by its geometry, its surroundings," he says. "Some squares are built even before their surroundings. It is important to understand who comes to the square and how they get there. There is another component, which I call the street connection. People walk along the street and stop to meet other people, or to watch, and experiences area created that depend on the surroundings. "Some people contend that a square must be on the level, with the street, but that is a matter for debate. Today, when you stand on top of Kikar Dizengoff, you see the buildings and the cars passing beneath the square and coming out the other side. This is a different type of experience." Lissar offers the example of the square beside the Ordea cinema in Ramat Gan as a successful square. "The rectangular square is connected with a road; there is a synagogue on one side and a road that is closed on Shabbat, becoming part of the sidewalk. That is a square with a human element." So what can be done to improve Israel's squares? Tamir-Tawil says it starts with the planning. "A square's success depends on its really being wanted from the outset, and not as an afterthought or byproduct of something else. A good square, in other words, is a goal in its own right."
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The pitter-patter of big feet
Galit, a woman in her early thirties, had been looking for a place to rent in Tel Aviv for ages. A little apartment, something nice. Months passed and she figured she'd seen every available rental space in town. Then she spoke with a landlord in Bavli, and thought his description over the phone sounded terrific - a little place in North Tel Aviv. She thought it was an independent unit, on the roof.
In fact, what he was offering was a room that was an integral part of the family home. "The entrance to the room for rent was the main one of the apartment. There was no separate one," she relates. "You go into the apartment, and right there is a staircase that leads to the room on the roof. The room itself was very small. It did have a shower and toilet of its own, and a tiny kitchenette of about half a square meter had been installed." It did offer a modicum of privacy, but not much more than that.
Why on earth would an established couple want to bring a stranger into their home, sharing their refrigerator and various intimate parts of their lives? Galit also thought it astonishing, especially since there was no separate entrance to the rooftop room.
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"You walk through the main entrance into the apartment and see the living room. There is no real separation between the family's apartment and the rented room," she explains. At any given point she, or whoever rents the room, could freely come downstairs and roam about in the family's private space.
The would-be landlord explained that his son had lived in that room on top, and left the nest. He and his wife could, of course, have let the room be - or they could rent it out for NIS 2,500 a month, which is a nifty NIS 30,000 a year. To them it was a no-brainer.
The thing is, the phenomenon is becoming increasingly common. Actually, renting out a room in the family home had been fairly common back in the 1950s and '60s. Students and other young adults would often find themselves living with an alternative family, as it were. But those were perhaps more intimate times. Today the rationale is financial: Rental prices in central Israel, mainly the greater Tel Aviv area, are sky high. A whole apartment as such is often unaffordable to many renters, and as for the families, the magnitude of the potential extra income is a siren's song that they can't resist.
As for the tenants, who would want to live cheek to jowl with a strange family? Well, anybody who can't find an affordable place in the area in which they want to live, for example.
Amir Shaltiel, who runs and runs the Eldar Project Marketing agency, says that an old rule-of-thumb has been broken. "In the past the boundary was clear: Landlords didn't rent a part of the apartment that could only be reached through the family space, because that lowered their standard of living," he explains. "But that line has become blurred as rental prices rise. It has become perfectly legitimate to rent a room on the roof that you can only reach through the family home."
Galit kept searching and found another place, where a woman had split her already-not large apartment into two units. The one for rent was all of 30 square meters in size, and the landlady seemed to be prepared to settle for a smaller space herself - plus NIS 33,000 a year.
Dream come true?
Elderly couples whose children have moved out, and who are living in a spacious apartment but are dependent on social security, can obviously use the passive income of rent - but the interesting thing is that the phenomenon is occurring across a broader spectrum. Sometimes young couples buy a large apartment and rent out a room or two, to help pay their mortgage. If they think of it in advance, their apartment can be designed to accommodate a tenant, somehow creating at least the illusion of privacy using plaster walls, internal doors or screens, and so on, says Shaltiel. Until the young couple has children, they don't need all the space and can often use the income.
Also, Israelis like to own their own property but because of real estate prices, they often can't really afford to. This is one way to make the dream come true. Anyway, youngsters are used to sharing apartments: it's even fun for them. The invasion of their privacy tends to be less of an issue than for an elderly couple not accustomed to trance music wailing through the ceiling.
Builders are accommodating the trend. Yohanan Haas, chief executive of Realty Executives, says that in Kfar Yona for example some 15% of the homes are being created with a discrete unit that can be rented out. "I guess that 10% to 12% of the families in the Sharon rent out their basements," he guesses.
Old Tel Aviv apartments were planned wastefully, points out Haim Kaufman of Kaufman Properties. They tend to have old-fashioned, closed-off "service porches," spacious hallways, separate kitchens - whereas today the fashion is for the kitchen and living room to be one continuous, open unit. Redesigning the interior can gain the owner a lot of space, some of which can be rented out. And the rental income can be used to pay for the renovation, too.
But take note: It isn't always legal to just up and split your apartment. In Tel Aviv there are whole streets where it's against the law. Before you hire an architect or take a hacksaw to your ancient kitchen table, check the local bylaws first.
All copyrights saved to haaretz ltd
In fact, what he was offering was a room that was an integral part of the family home. "The entrance to the room for rent was the main one of the apartment. There was no separate one," she relates. "You go into the apartment, and right there is a staircase that leads to the room on the roof. The room itself was very small. It did have a shower and toilet of its own, and a tiny kitchenette of about half a square meter had been installed." It did offer a modicum of privacy, but not much more than that.
Why on earth would an established couple want to bring a stranger into their home, sharing their refrigerator and various intimate parts of their lives? Galit also thought it astonishing, especially since there was no separate entrance to the rooftop room.
Advertisement
"You walk through the main entrance into the apartment and see the living room. There is no real separation between the family's apartment and the rented room," she explains. At any given point she, or whoever rents the room, could freely come downstairs and roam about in the family's private space.
The would-be landlord explained that his son had lived in that room on top, and left the nest. He and his wife could, of course, have let the room be - or they could rent it out for NIS 2,500 a month, which is a nifty NIS 30,000 a year. To them it was a no-brainer.
The thing is, the phenomenon is becoming increasingly common. Actually, renting out a room in the family home had been fairly common back in the 1950s and '60s. Students and other young adults would often find themselves living with an alternative family, as it were. But those were perhaps more intimate times. Today the rationale is financial: Rental prices in central Israel, mainly the greater Tel Aviv area, are sky high. A whole apartment as such is often unaffordable to many renters, and as for the families, the magnitude of the potential extra income is a siren's song that they can't resist.
As for the tenants, who would want to live cheek to jowl with a strange family? Well, anybody who can't find an affordable place in the area in which they want to live, for example.
Amir Shaltiel, who runs and runs the Eldar Project Marketing agency, says that an old rule-of-thumb has been broken. "In the past the boundary was clear: Landlords didn't rent a part of the apartment that could only be reached through the family space, because that lowered their standard of living," he explains. "But that line has become blurred as rental prices rise. It has become perfectly legitimate to rent a room on the roof that you can only reach through the family home."
Galit kept searching and found another place, where a woman had split her already-not large apartment into two units. The one for rent was all of 30 square meters in size, and the landlady seemed to be prepared to settle for a smaller space herself - plus NIS 33,000 a year.
Dream come true?
Elderly couples whose children have moved out, and who are living in a spacious apartment but are dependent on social security, can obviously use the passive income of rent - but the interesting thing is that the phenomenon is occurring across a broader spectrum. Sometimes young couples buy a large apartment and rent out a room or two, to help pay their mortgage. If they think of it in advance, their apartment can be designed to accommodate a tenant, somehow creating at least the illusion of privacy using plaster walls, internal doors or screens, and so on, says Shaltiel. Until the young couple has children, they don't need all the space and can often use the income.
Also, Israelis like to own their own property but because of real estate prices, they often can't really afford to. This is one way to make the dream come true. Anyway, youngsters are used to sharing apartments: it's even fun for them. The invasion of their privacy tends to be less of an issue than for an elderly couple not accustomed to trance music wailing through the ceiling.
Builders are accommodating the trend. Yohanan Haas, chief executive of Realty Executives, says that in Kfar Yona for example some 15% of the homes are being created with a discrete unit that can be rented out. "I guess that 10% to 12% of the families in the Sharon rent out their basements," he guesses.
Old Tel Aviv apartments were planned wastefully, points out Haim Kaufman of Kaufman Properties. They tend to have old-fashioned, closed-off "service porches," spacious hallways, separate kitchens - whereas today the fashion is for the kitchen and living room to be one continuous, open unit. Redesigning the interior can gain the owner a lot of space, some of which can be rented out. And the rental income can be used to pay for the renovation, too.
But take note: It isn't always legal to just up and split your apartment. In Tel Aviv there are whole streets where it's against the law. Before you hire an architect or take a hacksaw to your ancient kitchen table, check the local bylaws first.
All copyrights saved to haaretz ltd
Environmental focus at Globes Real Estate Conference
Guests include Global Property Guides publisher Matthew Montagu-Pollock.
Globes' will hold its annual Real Estate Conference tomorrow at the David Intercontinental Hotel in Tel Aviv. Guest speakers will include Cushman & Wakefield director of research and business analytics Dr. Megan Walters and the publisher of Global Property Guides, Matthew Montagu-Pollock.
This year's conference plenums will focus on trends and predictions in the Israeli and global markets, infrastructure projects in Israel, as well as Israeli and international opportunities and development. Panel sessions will cover a variety of emerging topics in the Israeli real estate and construction industries. Green building panelists will examine the formulation of a standard and ask whether costs are excessive and if the public is will to pay more for environmentally friendly homes.
Globes' will hold its annual Real Estate Conference tomorrow at the David Intercontinental Hotel in Tel Aviv. Guest speakers will include Cushman & Wakefield director of research and business analytics Dr. Megan Walters and the publisher of Global Property Guides, Matthew Montagu-Pollock.
This year's conference plenums will focus on trends and predictions in the Israeli and global markets, infrastructure projects in Israel, as well as Israeli and international opportunities and development. Panel sessions will cover a variety of emerging topics in the Israeli real estate and construction industries. Green building panelists will examine the formulation of a standard and ask whether costs are excessive and if the public is will to pay more for environmentally friendly homes.
Property and Building reorganizes malls management
The company owns Yishpro centers in Modiin, Beersheva, and Kiryat Gat.
Sources inform ''Globes'' that IDB Holding Corp. Ltd. (TASE:IDBH) subsidiary Property and Building (TASE: PTBL) has decided to reorganize all the management of its malls under one umbrella group, in a similar fashion to the Azrieli Group and Israel Malls. The company intends to follow this by re-branding its entire mall segment.
Among the malls held by Property and Building are the Kiryat Ono Mall (which it jointly owns with Amot Investments Ltd. (TASE:AMOT in equal shares), the Givatayim Mall (jointly owned with Clal Industries and Investments (TASE: CII), the Em Hamoshavot mall in Petah Tikva, and the Yishpro chain of malls in Modiin, Kiryat Gat, Ness Ziona, and Beersheva, as well as other commercial properties.
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008
Sources inform ''Globes'' that IDB Holding Corp. Ltd. (TASE:IDBH) subsidiary Property and Building (TASE: PTBL) has decided to reorganize all the management of its malls under one umbrella group, in a similar fashion to the Azrieli Group and Israel Malls. The company intends to follow this by re-branding its entire mall segment.
Among the malls held by Property and Building are the Kiryat Ono Mall (which it jointly owns with Amot Investments Ltd. (TASE:AMOT in equal shares), the Givatayim Mall (jointly owned with Clal Industries and Investments (TASE: CII), the Em Hamoshavot mall in Petah Tikva, and the Yishpro chain of malls in Modiin, Kiryat Gat, Ness Ziona, and Beersheva, as well as other commercial properties.
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008
Israeli basketball legend establishes real estate fund
The fund will invest in residential and commercial properties in Eastern Europe.
Sources inform ''Globes'' that former Maccabi Tel Aviv Basketball star Mickey Berkowitz is organizing a group of investors for residential and commercial properties, as well as rezoned agricultural land, in Eastern Europe. He said, "I'm still at the stage of reviewing options. I went to see possibilities and I believe that we'll begin operating on the ground within two or three months."
Real estate experts believe that Berkowitz was referring to developments that need an investment of €3-10 million for the purchase of land, and an additional €12 million for construction. The experts added that in order to enter these countries, the investor group will need at least €10 million in shareholders' equity and a local partner.
Sources inform ''Globes'' that former Maccabi Tel Aviv Basketball star Mickey Berkowitz is organizing a group of investors for residential and commercial properties, as well as rezoned agricultural land, in Eastern Europe. He said, "I'm still at the stage of reviewing options. I went to see possibilities and I believe that we'll begin operating on the ground within two or three months."
Real estate experts believe that Berkowitz was referring to developments that need an investment of €3-10 million for the purchase of land, and an additional €12 million for construction. The experts added that in order to enter these countries, the investor group will need at least €10 million in shareholders' equity and a local partner.
ADO buys much of Wardinon Real Estate
ADO chairman Adi Keizman: We're now in the advanced stages of building a company for the long haul.
ADO Europe Ltd. (TASE: ADO), controlled by Adi Keizman, today acquired control of Wardinon Real Estate Ltd. (TASE:WDRE) at a company value of NIS 88 million. In the first stage, ADO bought 60% of Wardinon Real Estate for NIS 52.6 million. The Wardinon family will continue to own the rest of the company and Dan Wardinon will stay on as CEO.
ADO bought nearly 77,000 shares at NIS 691.61 per share from two private companies owned by members of the Wardinon family. Wardinon Real Estate rose 2.3% by midday to NIS 506. ADO rose 0.1% to NIS 1.50.
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008
ADO Europe Ltd. (TASE: ADO), controlled by Adi Keizman, today acquired control of Wardinon Real Estate Ltd. (TASE:WDRE) at a company value of NIS 88 million. In the first stage, ADO bought 60% of Wardinon Real Estate for NIS 52.6 million. The Wardinon family will continue to own the rest of the company and Dan Wardinon will stay on as CEO.
ADO bought nearly 77,000 shares at NIS 691.61 per share from two private companies owned by members of the Wardinon family. Wardinon Real Estate rose 2.3% by midday to NIS 506. ADO rose 0.1% to NIS 1.50.
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008
One in ten Tel Aviv luxury apartment buyers under 30
Nearly 90% are bought by married couples
"Globes" has obtained a copy of the first comprehensive survey of luxury apartment buyers in Tel Aviv. An analysis of the figures shows that the most common buyer is a married couple in their 40s, free professionals, who reside in Tel Aviv.
The survey was conducted by Ocif Investments and Development Ltd. (TASE: OCIF) and Aviv Co., which are jointly building a number of luxury projects in the city. They include Aviv Bazameret, Migdal Moshe Aviv, and Aviv Bagimmel. The survey included 398 buyers of apartments in these projects, with the aim of compiling a representative profile of the buyers.
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008
"Globes" has obtained a copy of the first comprehensive survey of luxury apartment buyers in Tel Aviv. An analysis of the figures shows that the most common buyer is a married couple in their 40s, free professionals, who reside in Tel Aviv.
The survey was conducted by Ocif Investments and Development Ltd. (TASE: OCIF) and Aviv Co., which are jointly building a number of luxury projects in the city. They include Aviv Bazameret, Migdal Moshe Aviv, and Aviv Bagimmel. The survey included 398 buyers of apartments in these projects, with the aim of compiling a representative profile of the buyers.
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008
Perhaps it really is a bargain Africa Israel
Analysts look again at Africa-Israel - those who dare, that is.
In less than a year, Africa-Israel Investments (TASE: AFIL) has gone from the status of the new "people's share" to being the outcast of the Tel Aviv 25 list. Since the peak registered last May, the share had fallen 60% before yesterday's upward correction, leaving many investors disappointed.
But if you ask controlling shareholder Lev Leviev, Africa-Israel is actually a very interesting stock. "Africa-Israel is the biggest bargain on the market," Leviev said in warm defense of the stock at the International Rough Diamonds Conference that took place on Tuesday.
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008
In less than a year, Africa-Israel Investments (TASE: AFIL) has gone from the status of the new "people's share" to being the outcast of the Tel Aviv 25 list. Since the peak registered last May, the share had fallen 60% before yesterday's upward correction, leaving many investors disappointed.
But if you ask controlling shareholder Lev Leviev, Africa-Israel is actually a very interesting stock. "Africa-Israel is the biggest bargain on the market," Leviev said in warm defense of the stock at the International Rough Diamonds Conference that took place on Tuesday.
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008
Saturday, March 1, 2008
Apartment sales rise in jerusalem
Sales of new apartments in Jerusalem rose 5% in January
1,180 new private sector apartments were sold in January 2008, 9.1% more than in January 2007, but 0.7% fewer than in December, the Central Bureau of Statistics reported today. Sales included 1,040 apartments under construction and 140 apartments whose construction was completed in the past 15 months.
An average of 1,194 apartments were sold per month in August 2007-January 2008, 6.6% more than the monthly average of 1,120 apartment sold in February-July 2007.
Among the apartments sold in January, the average number of months a new apartment was on the market, since the start of construction, was 13 months. Half of the apartments sold in January were on the market for 11 months.
Apartment sales in Jerusalem were 5% higher in January than January 2006 and sales in the central region were up 46.2%. 11 homes were sold in Judea and Samaria in January, compared with 46 in January 2006.
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008
1,180 new private sector apartments were sold in January 2008, 9.1% more than in January 2007, but 0.7% fewer than in December, the Central Bureau of Statistics reported today. Sales included 1,040 apartments under construction and 140 apartments whose construction was completed in the past 15 months.
An average of 1,194 apartments were sold per month in August 2007-January 2008, 6.6% more than the monthly average of 1,120 apartment sold in February-July 2007.
Among the apartments sold in January, the average number of months a new apartment was on the market, since the start of construction, was 13 months. Half of the apartments sold in January were on the market for 11 months.
Apartment sales in Jerusalem were 5% higher in January than January 2006 and sales in the central region were up 46.2%. 11 homes were sold in Judea and Samaria in January, compared with 46 in January 2006.
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008
Bonei Hatichon, Minrav to build Jerusalem apartments
The two companies expect hundreds of millions of shekels in proceeds.
Bonei Hatichon Civil Engineering and Infrastructures Ltd.
(TASE:BOTI) and Minrav Holdings Ltd. (TASE: MNRV) have separately won Israel Land Administration (ILA) tenders for lots in the East Talpiot neighborhood of Jerusalem zoned for hundreds of apartments. Bonei Hatichon also won a tender for a residential lot in Netanya.
Bonei Hatichon won four tenders for lots zoned for 300 apartments in East Talpiot for about NIS 153 million plus NIS 12.5 million in development costs. The company also bought a lot zoned for 99 houses in Netanya for NIS 21 million plus NIS 6.6 million in development costs. The company expects to spend NIS 515 million to develop the projects, not including VAT and financing costs, and anticipates NIS 650 million in proceeds.
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Bonei Hatichon Civil Engineering and Infrastructures Ltd.
(TASE:BOTI) and Minrav Holdings Ltd. (TASE: MNRV) have separately won Israel Land Administration (ILA) tenders for lots in the East Talpiot neighborhood of Jerusalem zoned for hundreds of apartments. Bonei Hatichon also won a tender for a residential lot in Netanya.
Bonei Hatichon won four tenders for lots zoned for 300 apartments in East Talpiot for about NIS 153 million plus NIS 12.5 million in development costs. The company also bought a lot zoned for 99 houses in Netanya for NIS 21 million plus NIS 6.6 million in development costs. The company expects to spend NIS 515 million to develop the projects, not including VAT and financing costs, and anticipates NIS 650 million in proceeds.
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American Colony israel real estate developer
Sources inform that israel real estate developer American Colony Ltd. is set to float its European activity on London’s Alternative Investment Market (AIM) at the ambitious value of €400 million. UK investment bank Collins Stewart will be the lead underwriter for the issue.
American Colony develops, builds, markets and manages residential property projects. It listed on the TASE last May, and currently has a market cap of just NIS 309 million. The company intends to float on AIM its wholly owned subsidiary Inter Colony Real Estate Development Ltd., which manages its property business in Hungary, Romania, and Cyprus. Inter Colony is building a total of 20,000 units, 3,000 of which are in the process of being sold.
American Colony develops, builds, markets and manages residential property projects. It listed on the TASE last May, and currently has a market cap of just NIS 309 million. The company intends to float on AIM its wholly owned subsidiary Inter Colony Real Estate Development Ltd., which manages its property business in Hungary, Romania, and Cyprus. Inter Colony is building a total of 20,000 units, 3,000 of which are in the process of being sold.
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