Last week "Globes' revealed that Russian Jewish billionaire Roman Abramovich had bought the Varsano Hotel in Tel Aviv's Neve Tzedek neighborhood and plans converting it into his Israeli home. The NIS 100 million price tag is exceptional by any standards, but it seems that this was not the first such major deal in the area.
Oren Katz, a real estate agent and owner of "Neve Tzedek Real Estate," who specializes in high-end properties in the neighborhood, said, "For regular homes the price tag is on average about NIS 50,000 per square meter. But occasionally there is an exceptional deal involving a special property, if it is a particular size, or a very special location in the neighborhood, and the price per square meter can jump to as high as NIS 100,000 per square meter."
Globes: What do foreign residents find special about Neve Tzedek?
Katz: The neighborhood is different firstly because of its history. Even the properties that are not slated for preservation are still subject to municipal restrictions. So even if you build a new house you still have to adapt it to the neighborhood's character. Many entrepreneurs and private individuals complain about the difficulties the municipality makes but I think it is right that they protect the special fabric that might otherwise disappear."
"This makes it very interesting for foreign residents who come back again and again and say that Neve Tzedek reminds them of Europe and they feel at home there. It is obligatory to build with red tile roofs, wooden-framed windows, and colored plastering. The proximity to the sea is also an attraction.
Isn't the trend for foreign residents to buy in high-rise apartment buildings?
Katz: "There is a clear advantage to an apartment in a high-rise for somebody living abroad for most of the time. They can just close the door and not worry. Somebody is there to collect the post and handle the apartment's maintenance. That's why the high-rises in some areas have about 30-40% occupancy during the holidays and are very quiet for most of the year. Nevertheless, there are foreign residents who are billionaires that love the low-density building in Neve Tzedek because of its authenticity.
He added, "There are at least 15 billionaires in the neighborhood who have private jets and they sit around in the synagogues in shorts and t-shirts and talk with the elderly people there who haven't got the slightest idea that they are billionaires. They'd never walk around with a suit or attaché case on Shabazi Street. It's a neighborhood with the grandest of homes alongside old houses and alley cats. That's the uniqueness of the place."
How do foreign residents react when they hear the prices?
Katz: "In the past the prices in Neve Tzedek seemed cheap to them, but now after prices have risen, they are very similar to the places they come from and sometimes even more expensive. But there are still deals that people are prepared to pay for even if the Bank of Israel's real estate appraiser would not understand why. The vast majority of the neighborhood is made up of houses built on 170-200 square meter lots and so if suddenly a house on a 400 square meter lot comes up for sale, then people will pay a very high price because there is no supply. At the moment we have a 1,700 square meter lot with negotiations underway with a customer who wants to build a boutique hotel, and there are almost no lots of that size."
Tycoons are great but aren't they pushing out families and children?
Katz: "In recent years many kindergartens have opened in the neighborhood and in these kindergartens we see the children of immigrants alongside children from Israeli families. It's true there is a problem of green spaces in the neighborhood but kids can go to surfing clubs because of the proximity to the sea. Some of the foreign residents have immigrated to Israel. They don't want their children to go to high security schools Here they can walk around at 11 at night."
Published by Globes [online], Israel business news - www.globes-online.com - on April 19, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015