Another buyer fixed price tender has been successfully closed, this time in Ashkelon. The tender was first published in December 2015, but was postponed a number of times, and the final deadline for bids was actually yesterday. After the tenders committee opened the bid envelopes, winners for all the sites in the tender were announced. The tender involved a total of 690 housing units, together with commercial space, in the Hevlot neighborhood in northern Ashkelon. Demand was strong, with 24 bids being filed for the eight sites.
Bids were filed and winners declared for every site. The winning companies were H. Daniel Construction and Investments (56 housing units), Yoav Rami Construction Management and Supervision (three sites with 252 housing units), Alon Mordecai and Sons (100 housing units), YD Ashush Infrastructure (56 housing units), and K. Kochav Hanegev Construction and Development (two sites with a total of 226 housing units).
While the maximum price for the sites varied from NIS 8,607 to NIS 8,872 per sq.m. (not including VAT), the winning bids ranged from NIS 6,926 per sq.m. to NIS 8,391 per sq.m. (not including VAT). This range of bids reflected discounts of 5.5%-21% on the maximum price.
At the same time, the average winning bid in the tender was NIS 7,335 per sq.m. without VAT, and NIS 8,581 per sq.m. including VAT. The price reflects a price of NIS 835,000 for a 100-sq.m. apartment, including a parking space, a balcony, and a storage room to be marketed by the contractors to the winners of a lottery among those eligible, who will also receive a NIS 40,000 grant; NIS 673,000 for an 80-sq.m. apartment; and NIS 916,000 for a 110-sq.m. apartment.
A "Globes" survey of the successfully closed buyer fixed price tenders found that the number of discount apartments successfully marketed to contractors since marketing of land under the plan began is 8,738.
Note that as in every buyer fixed price tender closed, this was only the initial stage of the plan. Once a contractor or developer wins a tender, there is another lengthy process in which the winner promotes his project design and needs approval from the local authority and a building permit. This means that a tender closed now will actually produce apartments ready for occupancy two years from now at best. As of now, lotteries among those eligible have taken place in only two projects: one of Afula and one in Lod, while a lottery has begun for a third in Kiryat Motzkin. Only those declared eligible can participate in the lottery, and all the housing units to be constructed under the plan will be sold exclusively to those declared eligible by the Ministry of Construction and Housing. Tender winners are forbidden to sell their discount apartments for five years from the date on which they receive the keys, but can rent the apartments out on the open market.
Published by Globes [online], Israel business news - www.globes-online.com - on May 17, 2016
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