Lev Leviev's Africa Israel is taking over the Sumayil building project, named after the Arab village that once existed in what is now a busy part of Tel Aviv. The project is a joint initiative between the Tel Aviv municipality and private developers, and will include 970 residential units and 22,000 square meters of commercial space.
But what is so special about the scheme? In real estate parlance: location, location, location. Sumayil is right in the middle of some of Tel Aviv's major streets: Ibn Gvirol, Arlozoroff, Jabotinsky and Ben Saruk. No site in the city is ready for construction that is so central and large.
The property already has an approved master plan, though it still needs official approval from the planning authorities. The land has been little developed during its problematic history (see box).
The developers of the southern section of the area, half of which belongs to Lev Leviev's Africa Israel, are now pushing the development of 500 apartments and 10,000 square meters of commercial properties, about half of which will be built by Africa Israel. The company owns the largest share of the project, buying more of the land only last week.
Africa Israel says that the location of the planned 40-floor tower in the project is rivaled only by the Gan Hair tower, and that other new towers in the center of the city such as G. Tel Aviv at the corner of Ibn Gvirol and Hashoftim or Be'eri Nehardea are less desirable. In addition to the tower, Africa will put up buildings of 12 floors. Most apartments will have four or five rooms, and some will be much larger luxury penthouses.
"Prices of lots in Tel Aviv today are insane, but despite that we are looking there for properties in the hope of finding reasonable prices," Africa Israel Housing CEO Yoram Keren said at a conference of real estate assessors in Eilat two weeks ago. When asked what his definition of reasonable property prices in Tel Aviv was, Keren mentioned $250,000 for the land per residential unit.
Last Thursday, Keren proved that he means what he says. Africa Israel signed a cash deal with private landowners in the project for a section along Ibn Gvirol Street where 110 apartments will rise. In addition, it also signed a management agreement for another part of the property that will have 107 apartments.
The prices for the finished apartments are estimated to be no less than $7,000 per square meter.
Africa also already owned land in the project for another 40 apartments.
The price paid by Africa Israel for the land works out to $245,000 per apartment, a total of $27 million. Total revenues for Africa Israel for the project are seen at around $290 million.
There is also another part of the deal, almost small change for Africa: It will manage the entire project for the other owners at 3 percent of the selling prices, estimated at $9 million.
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