Tel Aviv’s evolution - The Jewish Chronicle

Israel’s luxury property market, led by Tel Aviv, is on the move; not a revolution but an evolution, and the arrival of London-based Beauchamp Estates, a global leader in luxury property, is a good barometer of the market.

Famed for its Bauhaus and Colonial architecture, Tel Aviv’s current property evolution began a little over a decade ago. If you had to pinpoint the start, it would be with the Meier on Rothschild Tower, on Rothschild Boulevard. This literal and metaphorical landmark was designed by Richard Meier, the American abstract artist and architect whose work includes the Barcelona Museum of Contemporary Art, the Getty Centre in Los Angeles and San Jose City Hall. Started in 2008, the tower was completed in 2015. Since then, Israel’s own star-chitects have come to the fore: Leon Gaignebel, The Fuksas Studio (Massimiliano and Doriana Fuksas), Pitsou Kedem, Kimmel Eshkolot (Etan Kimmel and Michal Kimmel-Eshkolot) and Ilan Pivko, to name but a few.

The distinctive mix of historical buildings (many already renovated and turned into hotels and high-end retail) with the shiny towers and angular features of contemporary architecture, is making the Tel Aviv skyline as identifiable as global cities such as London, New York, or Hong Kong.

This gentle evolution has not just been external but internal too — as little as five years ago there was no expectation to see premium-branded fixtures and fittings in any property; increasingly this is something buyers in the upper end of the market are looking for, and finding, as savvy developers create product and properties of an international standard.

Israel has moved towards these standards, not just in respect of high-end property but also in broader terms.

In the past five years there has almost been a revolution in Tel Aviv’s cultural, culinary and leisure offerings, placing it on many a young person’s must-visit list — Google put it fifth in the top ten for 2020, behind Da Nang (Vietnam), Sao Paolo, Seoul and Tokyo. Its international reputation as a fun, safe, tolerant city has spread rapidly, with its annual LGBTQ Pride Parade an international fixture. The contemporary art fund, Outset, opened its Israel chapter in 2008 and has helped create Israel’s thriving contemporary art scene.

Israel’s luxury boutique hotels rival the best in the world — The Norman, also home to the Israel outpost of high-end London restaurant, Dinings, and the world’s first Renoma Hotel, named after French artist Maurice Renoma, who was acclaimed by Warhol, Lennon and Picasso. The interiors have been curated by Renoma himself.

Matthew Bortnick, associate director, Beauchamp Estates (Tel Aviv), says: “Many people think of Tel Aviv as ‘shabby chic’, but it is a fast-paced global city, now with an infrastructure and social scene to match, having built an international reputation for tech and IT; it is no coincidence I think that Apple, Microsoft, Google and Waze, along with a number of gaming and security software development firms are located here.”

“The last five years have seen the pace of change in the city quicken, but not at the expense of historical Tel Aviv, I am glad to say. Its coastal location and climate offer visitors and residents an enviable lifestyle, which has also been one of the drivers for people buying property in the city, either as a primary residence or second home.”

The rise and rise of Tel Aviv has brought increased interest from international buyers, which is set to increase further, following UAE’s decision to normalise relations with Israel under the “Abraham Agreement”. Jordan and Egypt already have arrangements with Israel but the UAE was the first Gulf Arab country to reach such an agreement and the wealth and investment power of Abu Dhabi and Dubai in particular is likely to trigger significant inward investment into Israel’s residential property market, commercial real estate sector and the hotel/hospitality industry. This is likely to further stimulate interest with luxury hotel brands like Kempinski, Mandarin Oriental and The Four Seasons.

“Beauchamp Estates has seen increased global interest in the Israel real estate market with buyers from the USA, UK, France, mainland China, Hong Kong, Singapore, Russia and South America. The newly established relations between the UAE and Israel, only four hours’ flight time apart, will create exciting new opportunities in the real estate sector.”

While residential property prices in Tel Aviv rose by 6.9 per cent per annum between 2009 and 2017, over the past three years they have stabilised and, in some areas, softened slightly, providing an appealing “buyers’ market” for relocating international buyers: prices in Tel Aviv rose overall by just two per cent through Q3 2020 (Source: Israeli Central Bureau of Statistics). Covid-19 slowed the market during Israel’s first lockdown, lowering volumes, but prices have remained firm, with growth expected to return post-coronavirus. Q3 2020 has seen a three-year high in real estate sales, despite the skies being closed to non-Israelis since March. Once international travel opens again, growth is expected to continue.

While the suburb of Herzilya Pituach and the Central Tel Aviv neighbourhood of Neve Tzedek remain popular with family buyers, there is an increasing number of people looking for “Manhattan” style apartments, perfect to lock and leave, which has resulted in increased interest in high-rise developments in the Rothschild area and around HaYarkon Street, ideally with a view of the sea. These areas provide modern condominiums alongside restored listed buildings; residents from all around the world and an interesting mix of local restaurants, art galleries and more refined boutiques and bars. This has caught the attention of buyers and renters from both Israel and abroad.

The area around Carmel Market is now a rapidly developing area, defining its own vibe. While proximity to the beach is helping drive a wave of new-build activity, this is not destroying the original market vibe, with a wide range of places to eat, micro-breweries and specialist coffee houses. The area is a short distance from the Rothschild and Neve Tzedek Quarters, and the City Centre to its North.

Tel Aviv remains on average the most expensive area in Israel in which to buy, but if purchasing a second home that might at some time be let, it is worth factoring in the generally higher rental yields in Tel Aviv: the City Centre and Ramat Aviv offer the best yields at around three per cent and just above 3.5 per cent, respectively.

Beauchamp Estates is a global leader in luxury property, headquartered in London, with offices in Mayfair, Marylebone, St John’s Wood, Tel Aviv, St Tropez, Cannes and associates in Portugal and New York. Tel Aviv: +972 (0)3 555 5111.

London: +44 (0)20 7499 7722. beauchamp.com