One of the few positive things to come out of 2020 was the thawing of Middle East relations: In the span of a few months last fall, the United Arab Emirates, Sudan, Morocco, and Bahrain all agreed to establish diplomatic and economic relations with Israel.
The move has had countless regional implications, not the least of which has been a rising real estate market in Israel’s cultural and commercial capital, Tel Aviv. For the first time, brokers representing the city’s super-prime properties are able to court high-end clients from the Gulf and beyond.
Tomer Fridman of Sotheby’s International Israel says the impact of potential Arab buyers was immediately felt.
“The minute they signed the treaties, we were seeing tons of inquiries coming into Israel and also from Israel into the UAE. It’s been like, such a massive influx,” Fridman says.
He and his colleagues are collaborating with brokerages in the UAE, rather than directly connecting with potential buyers there. And their counterparts are doing the same for Israelis looking to buy in the Emirates.
For Gulf buyers, Fridman says, there’s been interest in both developments and single-family dwellings, including a stunning 69,000-square-foot palace in Caesarea listed for $259 million, making it one of most expensive homes in the world.
The “royal-style mansion” is festooned in marble columns, onyx mosaics, 14-karat gold moldings, and crystal chandeliers. It’s not like most Israeli design, says Fridman—Bauhaus, modernist, minimalist. But it’s right in line with tastes in the Gulf.
“It’s very lavish, very opulent—and it’s getting a lot of attention from Emirati buyers,” he says. “We’ve already had inquiries.”
In recent years, Tel Aviv has ranked among the world’s most expensive cities—and the pandemic hasn’t slowed things down, with home sales hitting a three-year high in the third quarter.
With branches in London, New York, Mykonos, and the French Riviera, luxury brokerage Beauchamp Estates opened its Tel Aviv office last year. Associate director Matthew Bortnick says there’s been plenty of interest from clients in Gulf countries about both residential and commercial properties.
“There is no doubt that the announcements made by the UAE, Bahrain, and Sudan regarding normalization under the Abraham Accords have been catalysts for increased interest in Israel’s prime real estate from these locations,” Bortnick says.
Buyers from Gulf countries have helped drive prices for Tel Aviv villas, mansions, and penthouses well above the $10 million mark, according to Mansion Global. And the resulting activity, though economically beneficial, will only put additional pressure on middle-class locals hoping to afford family homes.
To date, much of the interest Bortnick has received has come from Arab diplomats looking for properties to serve as embassies and ambassadorial residences. “The diplomatic corps have understandably been quick off the mark,” he says. “But so have businesses placing staff here, as well as private individuals.”
That includes wealthy Emirati families looking to buy trophy homes and holiday getaways.
“Tel Aviv’s relatively moderate summers and diverse leisure and recreation scene is sure to appeal to Emiratis,” he says, “and is much closer, geographically, than European resorts and destinations.”
The agency is also fielding inquiries from senior management at Arab airlines and young professionals who want a base of operations that offers world-class culture, nightlife, and beach living like Tel Aviv.
One couple in their 30s is on the hunt for a two-bedroom apartment with a doorman, gym, and pool, Bortnick says. They’re looking at Rothschild Boulevard—one of the most expensive streets in Tel Aviv—and have budgeted $2 million to $3 million.
Then there are the “exceptionally broad briefs” Beauchamp is fielding from ultra-high-net-worth Emiratis.
“There is no maximum budget and the specification is impossible to define, but it must be unique and high spec,” Bortnick says. “That generally translates to penthouses, like HaYarkon 29, or large villas either on Rothschild Avenue or the coast.”
One property Fridman is flagging for Emirati buyers is a $65 million baroque penthouse in Tel Aviv that could put Versailles to shame: Located off Royal Beach, the crown jewel atop the Sea One Tower has Empire-style furnishings, a formal dining room with seating for 16, and floor-to-ceiling windows overlooking the Mediterranean.
Though it’s the only part of the city that touches the water, Tel Aviv’s beachfront was long the city’s last undeveloped tract. Now it’s the “Golden Kilometer,” with a raft of luxury condos and hotels. Real estate deals in the corridor topped $1 billion in the past decade, according to the New York Times.
While the doors are opening to a lucrative new market, meeting their demands is no mean feat: Emiratis are accustomed to high-end villas and luxury high-rises in Dubai and Abu Dhabi, and are looking for trophy properties at the same level or even higher.
Beauchamp is targeting a $30 million mega-penthouse on HaYarkon Street as its first super-prime home in Israel to sell to a wealthy sheik or mogul.
Designed by Israeli firm Bar Orion, the duplex atop HaYarkon 29 spans the building’s 16th and 17th floors in entirety. There’s more than 5,700 square feet of living space (accessed by private elevator, of course), while outside, a private roof terrace houses an infinity swimming pool and jacuzzi, roof garden, and 360-degree views of the city, coastline, and the sea.
Jeremy Gee, Beauchamp Estates’ managing director, sees the sale of the penthouse launching Tel Aviv as a legitimate alternative to Morocco, London, or Marbella for Gulf vacationers.
“When one sheik buys, another follows,” he says.
It’s not just individual buyers, though: Developers from the Emirates are looking at Tel Aviv too.
“Israel, and Tel Aviv in particular, is not exceptionally well-served when it comes to high-end hotels, compared to other cities around the world,” Bortnick says. “A number of Dubai-based hotel owners and operators have approached us to search for suitable properties and locations where they could open a five-star hotel.”
That means on the water, “or at most, a block back,” he says.
Port Tel Aviv, starchitect Ilan Pivko’s combination of a 40-unit condo and five-star boutique hotel, will be less than 200 feet from the water when it opens in 2022. Layouts range from one to four bedrooms, with prices starting at $2 million.
A block away is the under-construction David Promenade Residences, a 28-story tower being managed by Kempinski Hotels. A duplex penthouse there runs upwards of $46 million, according to the New York Times.
While the initial wave of interest is coming from countries that have already established diplomatic ties with Israel, Bortnick says Beauchamp is also getting tentative inquiries from elsewhere in the Arab world.
“[They] have been watching the growth of the Tel Aviv real estate market in recent years and wish to buy as soon as protocol allows them to do so.”
He’s confident the reciprocal real estate boom will fuel the Middle East peace process even more.
“This is always a positive thing when it comes to politics,” Bortnick says. “The more people meet, socialize, and work together, the better things are.”
Originally Appeared on Architectural Digest