Deal Analysis / NIS 2.7 million for a six-room penthouse yet to go under construction in Kfar Sava

The transaction under analysis involves a 6-room penthouse in Kfar Sava that changed hands for NIS 2.7 million.

The project is being constructed by Bonei Hatichon, which is pre-selling apartments on paper before the building has even been started. The company coyly called the apartment in question a "pentloft," which gives you the idea: a top-floor residence with high ceilings.

The future building is part of a project called "Top Family," in "Green Kfar Sava" (plan Kfar Sava 80). The specific apartment is a duplex on the sixth and seventh floors, 194 square meters in area plus three balconies with another 147 square meters. Beyond the apartment's large area, it will feature special elements such as doubled height for the living room ceiling, a Jacuzzi on one of the balconies and more.

Bonei Hatichon anticipates tenants can move in in two and a half years.

That's the description. Now for the analysis. Apartments that expensive are a rarity in Kfar Sava, however big and special they are.

There are a few examples not far from that lofty height: Another developer is building a residential project on Herzl Street and is asking NIS 2.69 million for an even bigger penthouse, but that project is almost finished and preparing for occupancy. Lev Leviev's Africa Israel is building the Kfar Sava Dreams project, including a 15-story high-rise in the heart of the city. It's demanding NIS 3.4 million for its penthouse, but hasn't sold any of the apartments yet.

On the other hand, Zeitouni is building a similar project near Bonei Hatichon's complex and is selling similar properties for NIS 300,000 to NIS 350,000 less.

But in Bonei Hatichon's favor, the apartment in question really is unique. Comparison with other apartments similar in size doesn't do it justice: the company simply had to wait for the right client to amble along.

The question is whether one believes in the specific neighborhood and in Kfar Sava in general. The price the buyer paid is high, but could prove to be perfectly sensible down the line if prices in the area pick up. Possibly after the neighborhood gains ground, the buyer could sell for a handsome profit.

Realtor Udi Bahalul of Anglo/Saxon Kfar Sava, Avi Zeitouni of Zetouni and various builders helped with this analysis.