The COVID-19 year brought with it uncertainty in a wide range of areas. Like other areas, the real estate industry has been experiencing uncertainty for some time. However, with the exit from lockdowns and the return to routine, we are seeing the real estate industry recover and return to price levels that existed prior to the COVID-19 period- and even higher!
During 2020, there were those who speculated that real estate prices had fallen. However after the first quarter of 2021, we understand that real estate prices continue to rise, and that the volume of transactions has increased. All the while, the state has halted land marketing, causing a lack of supply relative to the high demand. Entrepreneurs who are thirsty for land reserves have continued to make significant acquisitions, evidenced by:
5 huge deals in the real estate industry
- A deal made by the Reality Fund and Kardan Real Estate, which purchased most of the Pardes Snir complex in Jaffa for NIS 336 million. The complex is about 55 dunams in size and is located near the Bloomfield football stadium of Maccabi Tel Aviv. The planned complex will include housing units and public spaces.
2. Another deal that was recently closed in Ness Ziona. Vitanya and Benny Landa will establish an employment project worth NIS 320 million. The companies purchased half of the said land located in the Science Campus from Indigo. The deal includes a commitment to lease a portion of the areas that will be built in the complex for a period of 15 years.
3. Another major deal occurred in the first quarter of 2021, when Israel Canada paid NIS 511 million for 33 dunams in the Girl’s House complex in Hod Hasharon. Israel Canada will build about 450 housing units on the said land.
4. Further evidence that the real estate market continues to boom and continues to be the leading market in Israel is the Sela Binui deal. Sela Binui purchased Discount Bank’s legal headquarters building in Tel Aviv for NIS 51.6 million. In this project we see again the trend of mixed use. The plan is to demolish the bank building, and in its place, to erect a mixed use, residential, hotel and commercial building.
5. The last deal we will present emphasizes the ability of the real estate market to recover and lead the rest of the industries in Israel. At the beginning of the year, we discussed a deal between the Hajaj group and Rami Shviro’s company, for the purchase of land at Einstein 36 in Tel Aviv. The Hajaj group sold 82% of the project at a value of NIS 238 million.
These deals teach us that market players including insurance companies, investment houses, banks, developers and contractors see the real estate market as a safe and profitable market and they invest the best resources to create new deals, and prices keep going up. There are those who see the market’s moves in the first quarter of 2021 as an answer to all those who have expressed speculative opinions, according to which the real estate market is expected to experience a decline.