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And thanks to Kahlon! | Israel today

2023-02-22T08:50:00.230Z


The year 2015 marked the turning point in the construction industry, when execution companies that until that time "only" provided construction services became initiation companies. It was the tenant price plan that was responsible for the transformation. Today, they compete head-to-head with the major real estate companies and hold an inventory of thousands of apartments. Get to know the new real estate entrepreneurs who have taken the forefront


"Raised money with a tractor bucket"

This disparaging claim, heard about five years ago against the contractors by the Minister of Finance at the time, Moshe Kahlon, still rings in their ears.

Despite the calls against them, Kahlon also knew that without the profitability of the real estate companies and the entrepreneurs, along with the risk taking that they take, the plans he issued would not have come to fruition at all.


When Moshe Kahlon was appointed Minister of Finance in 2015 and decided to market all the state's lands as part of a plan For the tenant, he did not imagine that he was going to change the map of the power relations of the construction companies in Israel. In practice, behind the extraordinary marketing plan, alongside the marketing of tens of thousands of housing units as part of the program and the benefits given to young people, the map of entrepreneurs in Israel changed and real estate mega-companies were gradually created. and news.

"The profitability of 'renter price' projects does not justify us taking the risk," said at the time, who was the CEO of Shikhon and Binui Real Estate, Tamir Dagan. Today, in retrospect, he probably would have said otherwise. But as I recall, this was a time when the "van contractors" took over on projects with a price per inhabitant. Slowly they were swept away, and the serious companies that became real empires remained in the market.

While the big developers at the time declared that price plans for residents were not worthwhile and declared that they would not participate in tenders, the small and medium-sized construction companies jumped at the opportunity and slowly began to acquire land for construction.

Today, those companies own a backlog of thousands of housing units that are in various stages of planning and construction and thus became significant competitors alongside those historic real estate companies and entrepreneurs, who in the past used to provide them with only execution services.

Adv. Avinaam Goelman, who lends to projects with a price for the tenant, explains: "The various programs for purchasing an apartment at a discount created a great "land" for small and medium-sized construction companies that entered the market strongly and became powerhouses.

As a result, competition remained that lowered prices for the buyer at the end, and in practice the government succeeded, perhaps even beyond its expectations."

Rain company:


backlog of 15,000 units

The project of the company Rain Valley Nahariya, photo: Rain Holdings 2

The Rain company was established alongside the publication of the reform of the Ministry of Construction and Housing, and saw the price as a window of opportunity for the tenant.

Already at the beginning, the company competed in tenders and won quite a number of them.

Among the first tenders she won was a tender issued in the city of Nahariya, in the Yitzhak Shamir neighborhood for the construction of 304 housing units.

Almost no entrepreneur believed in these lands and the potential inherent in them to such an extent that the rain company was seen as "riskionary" (taking risks).

Today, Gashem is about 90% complete with about 1,200 additional housing units across 5 different complexes, when they have already been occupied and are being occupied, most of them these days.

Arnona Hills Jerusalem Rain Company project, photo: Studio Lumo Imaging

To summarize: about two years after the publication of the plan, price per inhabitant projects made up 80% of the total number of projects of the 'Gasham' company, with construction rights on lots in Or Yehuda, Ashkelon, Kiryat Tivon and Jasser a-Zarqa.

Since then, 'Gasham' has expanded to more than 30 cities across the country and entered into other areas of investment and construction, including 220,000 square meters of commerce and employment, urban renewal projects, hotel projects for the construction of 720 hotel rooms and assisted living.

The 'Gasham' company today is one of the real estate companies with the largest stock of apartments in Israel with over 15,000 units.

Barel Group


8,466 units in various stages of planning and execution

Mishkent HaOmanim neighborhood in Kiryat Motzkin Price for a tenant project of the Barel Group, photo: Shlomo Shem

The Barel Group, owned by Ariel Babli, currently has a backlog of approximately 8,466 housing units in various stages of planning and execution (some with partners), and approximately 220,000 square meters in the field of trade and employment, including extensive activity in the areas of urban renewal, execution and infrastructure.

Ariel Babli, the owner and CEO of the company, is an engineer by training. In 2003, he founded the Barel Group, together with a partner, as a contracting company.

They began to enter the field of execution with a basic contractor classification in the construction of detached houses, but within 9 years of hard work and after taking on more and more projects, the company upgraded its contractor classification until it reached C 5 classification - unlimited contractor classification, and it began to serve as a company Implementation for projects of large companies such as Ashder, Levinstein, Shapir and Shikon and Binui.

Today, the Barel Group competes with those large real estate companies, in the field of initiation.

The year 2015 was the turning point with the beginning of a price plan for the tenant.

Ariel Babli says that at that time the company built two towers in the Carmel Castle as part of a purchasing group organized by Shamgar and Aknin (today the owner and CEO of the 'Gasham Holdings' group)


.

We saw that price per tenant projects do require low capital and at the beginning 100% of the apartments were intended for those who were eligible, so there was no need for marketing and advertising.

We competed and won one of the first projects that came out in Kiryat Motzkin"

Since then, the group has won about 13 tenders in Nahariya, Acre, Kiryat, Modi'in, Jerusalem and Gedera, amounting to thousands of housing units.

Babli points out that out of a strategy of spreading risks and the desire to specialize in the field of initiation, in the first projects the company worked with partners such as 'Gashem Hashakot', 'Sela Binui', 'Epi Capital' and 'Ayala Agam'.

During those years, the group established the entrepreneurial company by recruiting veteran and experienced professionals in all areas of entrepreneurship - business development, engineering, advertising and marketing.

As of 2022, the company has delivered 1,372 units to buyers, and these days the company is building an additional 1,834 units.

In the planning and licensing stages, the company promotes 4,372 units in entrepreneurial projects and another 2,238 units in urban renewal projects.

In addition, about 220,000 square meters of commerce and employment are being planned.

Alongside the entrepreneurial activity, the company continued the activity in the field of execution, but the focus changed.

100% execution activity for other companies, today 75% of the company's execution activity is for the company's projects and about 25% of the execution activity is for other entrepreneurs.

Sela Group Binui


Construction of 10,000 apartments

Sela Binui New Ramat Afel, photo: Oren Songo

Until 2015, Sela Binui focused on projects in the Nahariya area.

All the projects were self-executed and with an aggregate scope of approximately 1,000 units. Sela Binui was among the first to believe in the price-for-residents program from the beginning, chose to compete and even won the second tender published as part of the program.

Since that tender for the land of the Kurdish camp in Kiryat Motzkin, Sela Binui has expanded, grown, and today already has an inventory of about 10,000 units and about 500,000 square meters of commercial and employment space in neighborhood commercial centers, projects for the elderly and employment towers.

Sela Construction Company, Hadrim Galil Yam project, photo: Eran Lavia

According to Yossi Fairmark, Vice President of Entrepreneurship at Sela Binui: "Thanks to the execution arm of the company and thanks to the entrepreneurial decision to deepen its activity in price-to-resident tenders/target price/reduced price, Sela Binui has positioned itself as an entrepreneurial company and today it carries out and leads extensive activities in all Around the country in projects of all kinds and with a variety of partners on the way."

Quality is an identity card

Asia Cyrus in Dimona, Hashahar neighborhood, photo: Nadav Paket

"The raffle of gifts worth millions of shekels are distributed mainly in the areas of demand," says Benny Biton, the mayor of Dimona, criticizing the state that distributed free gifts to young people in prestigious places such as Galil Yam in Herzliya and Ra'anana.

"On the outskirts of Sabion, for example, there was an auction at a target price last September, which reflected a price of 2.2 million shekels per apartment, compared to 3.2 million shekels on the free market. A discount of one million shekels from the state."

But the success is not only in the location, but also in the high standard of construction that today's contractors give to the resident.

In Dimona, for example, in the Hashahar neighborhood in the Asia Cyrus project, the apartments look at the level of luxury apartments in the center.

I remember a visit in the first year of construction to the price for a resident project of 'Doron and Guy Levi' in Modi'in.

It was difficult for me to distinguish the differences in the construction standard between apartments on the free market, target price or price for the tenant.

The high level of apartments for housing ministry beneficiaries played a role, but the price differences were sometimes a million shekels or more.

Sela Construction Company Jerusalem Consulate Project, photo: 3D copy simulation

"When entrepreneurs who build next to my projects came to me at the price for a resident in Atlit, Tivon, Rishon Lezion, Yeruham and Acre, and said to me, 'What are you doing?'

For me, it was a business card for my company," explains from the gut entrepreneur Shalom Shetrit, CEO of Shetit.

"Obviously, their customers in the free market came and told them: 'Look what you get for half the price.'

And I sometimes received a much higher standard.

Today, looking back, it was clear that the profit was all mine.

The company always builds to a high standard and this is our identity card.'

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Source: israelhayom

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