Recent residential real estate transactions in the Neve Tzedek neighborhood of Tel Aviv demonstrate that prices there have exceeded typical appraiser definitions. While real estate prices are usually set according to market value, alongside use value and special value, in Neve Tzedek this does not reflect the situation. The goods there are outside the usual economic rationale/expertise and can be considered priceless and rare goods, with a restricted supply with psychological and emotional elements, which means that they can be marketed without a ceiling in terms of value.
Patrick Drahi sells Neve Tzedek lot for 200 million shekels
Recent offers bear witness to this. In September 2021, French-Israeli telecommunications businessman Patrick Drahi sold Rabbi Kook land in Neve Tzedek for NIS 200 million plus VAT. The site is planned for 26 apartments and 700 square meters of retail space – this reflects a price of NIS 40,000 per square meter for construction and likely NIS 120,000 per square meter including VAT for the sale of the apartments.
In another deal, a 1,100 square meter plot including a house and two outbuildings covering 900 square meters and a 600 square meter swimming pool, along with additional building rights, was sold for NIS 105 million to Assaf Tuchmeir, one of the owners of Israel Canada. This deal reflects NIS 115,000 per square meter – an inconceivable amount for 900 square meters of construction. Additionally, there is a cost of NIS 40,000 per square meter for building rights.
But both of those deals could be easily topped by Check Point co-founder Marius Nacht, who is offering Beit Chelouche for sale for $100 million. Beit Chelouche at 32 rue Chelouche was built by Aharon Chelouche who immigrated to Israel from Algeria in 1840. He bought land two years later on which to build the first Jewish neighborhood outside of Jaffa. The land belonging to Nacht has an area of 2,600 square meters, including a house of 550 square meters and building rights of 2,500 square meters. According to a regular assessment of market values, the property should be worth 150 million shekels, about half of what is requested.
Shmulik Cohen is an appraiser and owner of SK Real Estate Appraisal
Published by Globes, Israel business news – en.globes.co.il – on February 23, 2022.
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