Tel Aviv's old high-rises still attractive

Luxury high-rises that rebrand don’t lose their value and can compete against new projects.

Some of Tel Aviv's older luxury residential high-rises have been able to rebrand themselves and are still competitive against the slew of new projects that have been built, are under construction, or planned throughout the city.

Although new projects offer more amenities, such as spas, fitness rooms, and concierge services, their management fees can be 20-35% higher than the fees at older projects. Older projects also target a different type of resident than newer projects. Whereas the residents of older projects are mostly older and wealthier Israelis, newer projects' residents tend to be younger and more cosmopolitan, including many businesspeople and foreign residents.

Successful old-timers include Gan Ha'Ir Tower, Dizengoff Tower, David Towers, and the Opera Tower.

The 24-storey Gan Ha'Ir Tower atop the high-end mall of the same name next to the Tel Aviv-Jaffa Municipality on Ibn Gvirol Street was built in 1989. It has 90 apartments of 160 square meters apiece. Maintenance fees are NIS 2,600 per month, and apartments cost between $6,000 and $10,000 per square meter. In 2008, a 350-square meter penthouse was sold by former basketballer Miki Dorsman for $7.5 million.

The 20,000-square meter 21-storey Dizengoff Tower, atop the Dizengoff Mall was built in 1986. It has 220 apartments, however, because the building is above the mall, the penthouses are effectively 31 floors above the ground. A typical floor has eight two-room apartments, two three-room apartments and two four-room apartments, where original apartments were combined.

Dizengoff Tower Maintenance and Services CEO Shmuel Meir says that the maintenance fee of NIS 8.60 per square meter is the lowest for luxury residential buildings in Tel Aviv. He adds that only 15% of the building's residents are foreigners, and the rest are a mix of elderly and 30-somethings.

Meir adds that there is very strong demand for the buildings two-room apartments, which account for two-thirds of all the apartments, ranging from $300,000 for an apartment on a lower floor to $350,000 for an apartment on an upper floor with a sea view. A four-room apartment in need of renovation goes for $600,000-650,000. 40% of the apartments are rentals, with rent ranging from NIS 4,000 for a two-room apartment to NIS 7,100 for a four-room apartment.

The 19-storey David Towers on Uri Lesser Street, off David Hamelekh Street in north Tel Aviv were built in 1980, and have just over 400 apartments. Tenants include older tycoons including Michael Strauss and Gottex founder Leah Gottlieb. The late diamondier Moshe Schnitzer was also a resident. Maintenance fees range from NIS 1,200 per month for a three-room apartment to NIS 2,400 for a five-room apartment.

Demand is high. The current asking price for a 100-sq.m. a four-room apartment is NIS 3.5 million and for a 180-sq.m. a five-room apartment on an upper floor is NIS 4.7 million.

The Opera Tower on the Tel Aviv waterfront at the start of Allenby Street was built in 1993. The 21-storey building has 116 apartments. Built by Alfred Akirov's Alrov (Israel) Ltd. (TASE: ALRO, many people believe it set the standard for later luxury high-rises in the city.

Most of the apartments are 130-170 square meters in area. Prices range from $5,000 per square meters for apartments facing west to $10,000-15,000 per square meters for apartments facing south. Real estate broker Rina Leviev, who handles the building, said that a 150- square meter apartment with a sea view recently sold for $1.7 million ($12,000 per square meter).

Published by Globes [online], Israel business news - www.globes-online.com - on October 6, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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