Welcome to Summayl: Tel Aviv’s Controversial Multimillionaires-only Compound

The ruins of Summayl – an Arab village that was abandoned by most of its residents after the War of Independence – remained a wild enclave in the middle of Tel Aviv. Up until now

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Yael Darel
Yael Darel

The romantic aura surrounding advertisements for the Summayl real-estate development in Tel Aviv has drawn quite a bit of its inspiration from local history. The ruins of Summayl – an Arab village that was apparently abandoned by most of its residents after the War of Independence – remained a wild enclave in the middle of Tel Aviv, wedged between the city’s most central thoroughfares.

In recent years buyers have been eulogizing Tel Aviv's luxury market. Regulatory restrictions on foreign buyers have chased away a lot of them

The Summayl compound, which covers 45 dunams (11 acres), has been at the core of a years-long struggle over evacuation of the residents and arrangement of compensation for them. 

Now, however, a huge deal signed last month for the northern part of the compound is bringing an end to the nostalgic chapter of Summayl’s history, and has sparked a big debate over the future of the area’s extremely expensive real estate.

An illustration of the new Summayl real-estate project in Tel Aviv.
Another illustration of the new Summayl real-estate development in Tel Aviv.Credit: Courtesy of Africa Israel

Within the framework of the transaction, the 'Africa Israel' holding and investment company won the bid for Summayl’s Lot 122, which is zoned for construction of 174 luxury apartments. The company paid 420 million shekels ($122.6 million), which means that the value of the land, from which the final price of the apartments will be derived, is almost 2.5 million shekels per unit. Taking into account the costs of erecting the project, it can be assumed that apartment prices will start at 6 million shekels ($1.75 million).

'Tel Aviv isn’t just a strip of expensive real estate, it’s a city of people. Some are students, some are artists, many are from different socioeconomic backgrounds, and at this rate, those people will gradually leave Tel Aviv'

The high price 'Africa Israel' paid may have shocked readers of the local financial press, but longtime real-estate agents who are knowledgeable about properties weren’t surprised at all.

“The Summayl compound is not just the most important and central piece of land in north-central Tel Aviv, but it is also a developing area that is going to be connected to the light rail train, and prices in the vicinity are already high,” says Dadi Orion, manager of the Tel Aviv branch of the Anglo-Saxon real-estate company. “I’m assuming that 'Africa Israel' bought the land at such a high price because they aren’t planning to build quickly, and they are expecting that despite the high prices, the market will rise even further.”

Orion, whose office is active in the upscale Kikar Hamedina (Hamedina square) area, where shops such as Gucci and Zadig & Voltaire can be found, notes that many of the transactions – some of which have involved him – indicate that prices there range between 50,000 shekels to 60,000 shekels ($14,600 -$17,500) per square meter.

'It’s true that in recent years there’s been a significant drop in the luxury market in Israel, primarily because of the difficulties and high costs of getting foreign money into Israel'

The Summayl compound, which covers 45 dunams (11 acres), has been at the core of a years-long struggle over evacuation of the residents.
The Summayl compound, which covers 45 dunams (11 acres), has been at the core of a years-long struggle over evacuation of the residents.Credit: Ofer Vaknin

“Summayl is en route to becoming the next Kikar Hamedina, a compound of luxury towers in a built-up, central area – and there’s a demand for that,” Orion continues. “In the Remez Tower nearby, units of 130 to 160 square meters are being sold at between 50,000 to 60,000 shekels per square meter. Larger apartments can go for as much as 70,000 shekels ($20,400) per square meter – or even more.”

Information in the Israel Tax Authority database shows that Orion’s estimates are pretty much on the mark: in December, a three-room, 58 square-meter apartment in the Summayl compound sold for 3.2 million shekels – that is, 55,000 shekels per square meter. Last May, a four-room, 146 square-meter apartment fetched 8.7 million shekels, or 60,000 shekels per square meter; for a 100-square-meter unit, buyers paid 5.6 million shekels in December. Based on the demand for housing in Tel Aviv and the upward trend in prices this past year, it seems that Summayl hasn’t topped out yet.

Construction work at the Summayl compound, Tel Aviv, seen from the air.
Construction work at the Summayl compound, Tel Aviv, seen from the air.Credit: Ofer Vaknin

In general, prices in Summayl – which contains a variety of residential projects in which apartments have already been sold, on paper – are continuing to rise, even though in recent years people have been eulogizing the luxury market in Israel in general, and in Tel Aviv in particular. High taxes on the purchase of apartments for investment purposes have forced many people out of the market, and regulatory restrictions on foreign buyers, particularly those from France, Britain and the United States, have chased away a lot of them, too.

The relatively small number of sales of deluxe residences has featured prominently in every possible real-estate survey. According to the Madlan website, for example, in 2015 there were 672 apartments of 5 million shekels or more purchased in Tel Aviv, while in 2017 there were only 234 such transactions.

But the companies involved in developing Summayl apparently have a different assessment of the luxury market. Over the past year it seems as if they have continued to implement their plans to build an upscale neighborhood, unfettered by any restrictions or demands from the municipality.

Two detailed municipal plans for this compound were approved over the years, one for its southern part, and one for the northern section. All told 1,200 units are slated to be built here, along with commercial structures, public buildings and landscaped areas.

Homogenous population

As of now, development and building at Summayl continue apace, without any demand from the municipality to include small units, affordable housing or apartments for rent – just as was the case in Tzameret Park in the northeastern part of Tel Aviv, which is a homogenous enclave consisting solely of luxury residences. Unlike Tzameret, however, it seems that in Summayl there will at least be more freedom of movement for residents in and around the compound, thanks to a network of walkways leading to the main roads nearby.

An illustration of the proposed towers of the new Summayl real-estate development in Tel Aviv.
An illustration of the proposed towers of the new Summayl real-estate development in Tel Aviv.Credit: Courtesy of Africa Israel

Nevertheless, the homogeneity of this huge real-estate project has again drawn fire from those wondering how young people can continue to live in the “city that never sleeps.” For her part, Gaby Lasky, a human rights lawyer and former Tel Aviv city councillor, believes that luxury compounds like Summayl undermine the human fabric of the city and are bad for its urban DNA.

Lasky: “Tel Aviv isn’t just a strip of expensive real estate, it’s a city of people. Those who come to the city, whether to make their dreams come true or just to study, are all kinds of people. Some are students, some are artists, many are from different socioeconomic backgrounds, and at this rate, those people will gradually leave Tel Aviv – but without them it won’t be Tel Aviv. It isn’t just the interest of the city to provide housing solutions for everyone, it is its obligation.”

Sebastian Wallerstein, director of the Hagar Affordable Housing Center at Tel Aviv University’s Law School, is critical of the extravagance of the compound and blames the municipality for its passive stance on the matter.

“There is no dispute over the need for affordable housing in Tel Aviv,” he says. “Prices are high throughout the city and certainly in the center, near the Summayl compound. The fact that this plan does not include affordable housing is a big loss – especially given the accessibility of the area to public transportation, job opportunities and high-level services. The professional and political echelons in Tel Aviv recognize the need for affordable housing, but recognition alone doesn’t create apartments. The city knows how to intervene and even change plans that have been approved in the past to achieve things that are important to it. Too bad that isn’t the case with Summayl.”

In the absence of municipal restrictions, Orion of Anglo-Saxon believes that developers are making a correct bet: that despite the slowdown in the high-end housing market, there will be demand for the apartments when they’re built.

The old houses of the Summayl compound.
The old houses of the Summayl compound.Credit: David Bachar

“It’s true that in recent years there’s been a significant drop in the luxury market in Israel, primarily because of the difficulties and high costs of getting foreign money into Israel. However, there is a local population of clients with big money who are looking for properties that meet their needs,” Orion says. “Developers have recognized this potential and now we are seeing more and more projects with a mixture of apartments that meet those needs: apartments of 130 square meters or more, with a very high standard of construction.”

Project players

To date, despite the potential of Summayl, only two real estate companies hold the two main construction sites on the land: Africa Israel and the Hagag Group. Both companies conducted a tense battle over Lot 122 in the northern part. In addition to Lot 122, Africa Israel previously attained the rights to erect a smaller building of 30 apartments, also in that section. Together with a group of private owners, the company has rights to build two residential high-rises in the southern part of the site, with a total of more than 600 units, along with a 10,000 square-meter commercial center.

Hagag is erecting two other residential buildings near the corner of Ibn Gabirol and Jabotinsky streets, on behalf of a purchasing group; one will be 47 stories high (with 228 apartments), and the other will be six stories high (22 apartments). Also involved in developing Summayl are private owners, represented by attorney Shmuel Shoob. The last player in this field is the Tel Aviv-Jaffa Municipality, which is building an office building to house several departments now scattered in different locations around the city. The developers are counting on the influx of employees into these new offices to boost the commercial enterprises planned for the site.

In a statement, the Tel Aviv municipality said that Summayl will encompass a total of 1,200 housing units, ground-floor commercial spaces, and 12.5 dunams that will be allocated to open spaces (3 dunams), public buildings (7 dunams) and a 2,500 square-meter station serving the light rail’s green line, which will travel along Ibn Gabirol Street. Near the entrance to the compound there will also be a station serving the light rail’s purple line, which is to follow Arlosoroff Street.

With regard to the parts of Summayl slated for public use, the city said that “in the space designated for public buildings there will be a cluster of preschools and premises housing municipal departments, making the city’s work more efficient and significantly reducing rent payments. City Hall at Rabin Square will continue to function as usual. Because the plan is not new, it does not demand allocations for affordable housing or small apartments.”

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