Eitan Eldar was once considered one of the smartest financiers in the Israeli capital market. He was very successful in the late 1990s, then suffered a painful reversal of fortune. In recent years, he has resumed doing business on a large scale, this time as a broker and developer of deals in London's lively housing market. Eldar, who has moved to London, founded and heads a company named EEH Ventures. According to the company website, he has been with EEH Ventures since 2013, mainly as a broker in property purchasing and development deals with an aggregate value of nearly £1 billion (NIS 4.5 billion), mostly in London.
The website says that Eldar's company operates through two divisions: investment and development. EEH invests its money and that of international institutions in real estate development projects, generating value through the experience and professional know-how of its people in designing, financing, and managing projects. "EEH Ventures specializes in in achieving a 5% rental yield on its residential investments and purchase with a discount on the market price," the company website states.
An important part of this activity consists of brokering - mediating deals for buying and selling apartment blocks, mainly in less central areas of London where the middle class resides. EEH has been involved is deals for selling over 3,000 housing units to date. Sources inform "Globes" that one of the main investors in this activity is Israeli real estate and hotels tycoon Yakir Gabay, who also lives in London, and who has purchased hundreds of apartments in London through Eldar's company. Gabay does business all over the world, but principally in Germany, and his wealth is believed to be in the billions of dollars.
The company website says that EEH's development division "focuses on small to medium-sized properties with great development potential and acquisitions of between £20 million to £100 million." This division engages in two types of development. The first is permitted development - purchasing a commercial building and turning it into a luxury apartment building. EEH's website says that the government and local authorities have adopted regulations on preservation and converting office buildings into residential buildings, which shortens the time needed for construction. The second type of development is construction of new residential buildings.
The website of EEH, which leads investments by both private investors and investment institutions, states that the company works with local partners having planning knowledge and expertise in the London residential real estate market. Eldad moved to London several years ago with almost no capital. He raised the initial financing for his activity mainly from relatives and private investors from Israel.
In addition to the increase in the volume of deals in which Eldar is involved, he has also begun to make capital investments in projects in recent years, among other things through Israeli real estate company BSR Group, in which he is a major shareholder, together with controlling shareholder Nachshon Kivity and Roi Gil, Eldar's former partner in Gibor Sport. One of the projects led by BSR in London is the conversion of an office building purchased for £40 million in Wembley, close to the famous football stadium, into a complex with 227-350 small apartments, which the developers hope to sell for over £100 million.
The UK real estate market was hit hard three and a half years ago, when Brexit led many foreign investors to withdraw from it. Housing prices plunged, and developers who built new projects were stuck with merchandise that they had to sell at reduced prices. EEH is exploiting this situation; Eldar is gambling that housing prices in London, a market that currently features strong demand for rental properties, will soon resume their upward climb.
Published by Globes, Israel business news - en.globes.co.il - on November 21, 2019
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