Gindi Holdings has overtaken the government and announced a purchase tax exemption for investors in a 2-room apartment in the Afrahaus project in Tel Aviv • Construction of 2 luxury residential towers has begun
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It can now be officially said that the Kahlon era is over: investors are returning to activity, having been smuggled abroad due to high taxation during the previous government. Overseas investments are questionable today under the corona crisis, and many investors are trying to return to the country, not always successfully.
This week it was announced that Finance Minister Israel Katz intends to reduce the tax for investors throughout the country to 5%. At the same time, the Israel Land Authority's tenders for the fullest price are expected to raise housing prices in the center, in the heart of areas of demand. .
Luxury apartments with reduced maintenance fees // Imaging: Viopoint
"We anticipate that the residential real estate market is facing a sharp rise in prices," says Roni Tennenbaum, the company's VP of marketing.
Until more companies join, this is the first exemption of its kind that has been "privatized", as part of a step that precedes the government and is carried out by a private company.
Affordable luxury
The Yad Eliyahu neighborhood is currently characterized mainly by urban renewal projects (evacuation-construction and NAPA).
Gindi Holdings is building a pair of luxury towers on an area of 9.6 dunams, which it purchased from the Tel Aviv Municipality for NIS 415 million in a lease for 99 years. The building rights on the lot include main areas of 39,700 square meters above a commercial ground floor, service areas and parking basements. 3,000 square meters of main areas to be built in the tower will be registered in the name of the Tel Aviv Municipality and will be designated for public buildings. The expected income for the company is estimated at NIS 2 billion.
The project will include 2 towers with 30 floors. The excavation at the construction site has already begun, and the population is expected within about 5 years. The mix of apartments includes 2-4 room apartments and 4- and 5-room penthouses. The target audience for the project is young families, housing reducers, students and following the new exemption - also real estate investors, the growth engine of the market.
Construction and development momentum // Imaging: Viopoint
The towers are designed with a luxurious look, covered with glass and aluminum, designed by architect Kika Braz. It is estimated that the management fee will be around NIS 500. The company's management explained that this is a relatively low amount, thanks to the lack of facilities typical of a luxury tower, such as a pool or gym.
"The standard is for luxury housing in terms of the quality of the raw materials for construction, but in order to lower the maintenance fee we decided not to build a pool or gym. "There will be a guard post, and the tenants will decide if they want to operate it," Tennenbaum explains.
So what investment is required? The price of a 55-square-meter 2-room apartment with a 10-square-meter balcony, which will be tax-exempt, is NIS 2.15 million. According to estimates, such an apartment will be rented for NIS 6,000. Price of a 3-room apartment 79 sqm + 12 sqm balcony starting at NIS 2.9 million. 4 rooms 101 sq.m. + 14 sq.m. balcony starting at NIS 3.6 million. Currently, 130 apartments out of 704 remain for sale.
Modern residential towers // Imaging: Viopoint
Gold mine for investors
Are investors on their way back to Tel Aviv? Although the Minister of Construction and Housing expects them to return to the periphery, the real estate industry is convinced that places like the Yad Eliyahu neighborhood are the real improvement for those looking for opportunities for urban renewal.
Indeed, those who foresaw the future a few years ago have already realized that investing along the length and breadth of La Guardia Street in Tel Aviv is a kind of gold mine. Say Ibn Gvirol, Dizengoff or Ramat Aviv, and in less than a decade in one breath, Yad Eliyahu will also join this category. The reason is simple: the more central and accessible the area for public transportation, the greater the chances of improvement.
The Tel Aviv Municipality took the Yad Eliyahu neighborhood as a flagship, with the connection of the west and east of the city via a Jewish bridge, between the Montefiore neighborhood and Legal Alon. According to the municipal plan on the main street that crosses the Yad Eliyahu neighborhood, La Guardia, the train buildings will be replaced with modern residential towers. The big advantage of La Guardia Street is that it is a major thoroughfare with access to the Ayalon lanes.
How do you know what the future holds? Try to buy an old and neglected apartment today with the potential for urban renewal. Prices are skyrocketing. The view today is already into the future.
The municipality, for its part, intends to triple the population and build about 3,500 new housing units, instead of the 1,200 existing apartments in the neighborhood. Some tenants are definitely worried due to lack of parking and overcrowding. On the other hand, in Tel Aviv's new parking standards, which were approved only about a week ago, parking spaces will in any case be significantly removed in projects that will be built in the new master plans.
"In recent years, the Yad Eliyahu neighborhood has enjoyed a momentum of construction, development and implementation of urban renewal plans, which have been spent in planning institutions for too long," says Ohad Danos, former chairman of the Real Estate Appraisal Bureau. "There is no doubt that when the old housing buildings are demolished and new residential towers are built under them, the neighborhood will change its face even more and lead to a nice improvement of all the apartments in the neighborhood, similar to what we saw in the Neve Sharet neighborhood in the northeast."
The Yad Eliyahu neighborhood is changing its face // Imaging: Viopoint
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