Kardan Real Estate has bought Housing and Construction (Shikun u’Binui) group company Or-Yam’s 50% share in a project for constructing 29 luxury apartments on Hoshea Street facing the beach in northern Tel Aviv. Kardan paid about $2 million and will own 100% of the project, which will be the most prestigious and expensive building to be constructed in Tel Aviv in the near future. Penthouses in the project will be sold for $1 million.
Kardan and Or-Yam bough the land on December 16, 1993 from three private parties for $4.5 million. Or-Yam will be left with a $250,000 capital loss after the deal, plus a seven-year interest and linkage loss. Or-Yam has now at least partially exited the luxury apartment market.
The 1.25-dunam (0.3125-acre) plot, owned by the Jewish National Fund and managed by the Israel Land Administration (ILA), was leased to Kardan and Or-Yam for a long term, as is usual. The plot is divided into three almost equal privately owned sections. Kardan and Or-Yam paid $1.5 million for each section at the time, with one of the sections being paid for partially in cash in a percentage deal at 16% of the overall transaction.
Kardan is about to begin construction of the building. The apartments will be among the most expensive ever sold in Israel - two 200 sq.m. penthouses with 60 sq.m. balconies will be sold for about $1 million each. A four-room apartment will cost about $450,000, a three-room apartment about $370,000, and a two-room apartment about $300,000. Four apartments have already been sold. The high prices are due to the level of finishing, the uniqueness of the building, the quiet surroundings, and the proximity to the beach. All the balconies in the building overlook the beach.
Published by Israel's Business Arena on March 18, 2001