French-Israeli businessman buys 8 unbuilt Jerusalem apartments for NIS 24 million

A French-Israeli businessman has acquired eight unbuilt apartments in Jerusalem's RAYK Borochov project for NIS 24 million, signaling a significant investment in the city's residential market. The purchase, averaging NIS 3 million per apartment, was made with the primary intention of investment.

The acquired units include four three-room apartments, approximately 74 square meters each, and four four-room apartments, around 96 square meters each. These apartments are situated on floors 2 through 12 of the 27-story tower. The deal comes amid a strengthening of the Israeli shekel against the dollar and euro in recent years, which has impacted prices for foreign residents.

Developed by Aspen Group's Rayk Real Estate Group, the RAYK Borochov project involves demolishing four existing buildings to construct new ones with 190 residential units, commercial spaces, and underground parking. The project will offer a mix of two to six-room apartments and shared tenant facilities. This recent transaction is part of a broader marketing initiative that has seen the sale of 25 apartments in the past two months.

According to developers, the deal was finalized at an average price of NIS 34,000 per square meter, representing a discount of about 3.5% from marketing prices. The buyer also received additional benefits, such as a NIS 10,000 credit per apartment for upgrades, exemption from inflation-linked indexation, and waiver of lawyer's fees. These concessions, along with savings in marketing costs, resulted in a deal approximately 7%-8% lower than average market prices in the immediate vicinity. Developers anticipate rental returns of around 3% annually once the project is occupied in approximately three years, which is higher than the city's average of 2%.

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The current deal reflects a broader phenomenon that we have identified in recent months, which is the increased entry of private capital (local and international) into the Jerusalem residential market, with the understanding that the city currently presents high resilience and real improvement potential.