China’s growing investment and trade ties with Israel is spurring demand for real estate in Tel Aviv, with inquiries from mainland buyers for homes in the city rising significantly, property agents said.
Inquiries from China increased from nine in the fourth quarter of 2019 to 160 in the same period last year, according to the UK-based Beauchamp Estates, which has a presence in the Middle Eastern country.
Most of these inquiries were for ultra prime property markets in Tel Aviv’s popular districts and affluent beachfront neighbourhoods like Herzliya Pituach, the agency said, adding that there was also interest in commercial property and land for property development.
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“Buyers from mainland China have been active in the Israeli market for more than a decade, but we have never seen such a sudden and meteoric increase in activity,” said Matthew Bortnick, director at Beauchamp Estates Tel Aviv.
The country’s efficient Covid-19 vaccination programme is likely to further burnish its appeal as an investment destination as infection rates drop, which could pave the way for the full reopening of its economy. Israel’s recent peace deals - the Abraham Accords - with Arab states like Bahrain, the United Arab Emirates, Morocco and Sudan are also likely to bring in more investment, following the normalisation of relations with these former foes.
Investors anticipate an uplift in rent and property values as Arab governments start to look for mansions and penthouses in Tel Aviv for use as diplomatic buildings and residences for ambassadors and diplomatic staff.
Beauchamp, which sold about US$25 million worth of property last year in Tel Aviv to Chinese and Hong Kong buyers, expects a 5 to 10 per cent sales growth this year, as it banks on dozens of clients from mainland China, Hong Kong and Singapore.
Chinese buyers typically spend between US$4 million and US$5 million for holiday homes, and between US$1 million and US$4 million for an apartment for rental investment or to sell later, Bortnick said.
“We have received applicant briefs for both sales and lettings from Chinese clients,” Bortnick said. “We have been helping one client, an owner of a venture capital firm, who is looking for a three-bedroom apartment in a luxury tower, with pool, porter and gym, in the Rothschild area with a budget of US$4 million to US$5 million.”
The expansion of trade and business ties with China is helping drive interest in Israeli real estate as Chinese companies deploy executives to Tel Aviv, who need accommodation for themselves and their families.
Between 2002 and 2020, there were 463 investment deals, mergers and acquisitions of Israeli companies by investors from mainland China and Hong Kong, according to Yoav Haimi, Israel’s commercial consul to Hong Kong.
In the tech sector, Chinese venture capital doubled from US$500 million in 2014 to US$1 billion in 2016. This includes Huawei Technologies’ acquisition of the Toga Networks in 2016 for about US$150 million, which has since become Huawei’s Israeli R&D centre.
Other Chinese companies such as Alibaba, Xiaomi and Lenovo also have R&D centres in Israel.
Tel Aviv is the only city in the Middle East and North African region named as one of the world’s leading tech lifestyle cities that are talent magnets but still offer better quality of life and air quality, according to a study released in December by property consultancy Savills.
“As a start-up powerhouse and a strategic gateway in the Middle East, Israel is an attractive investment destination for China,” Haimi said.
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