Israel's Apartment Dwellers, and Not Just the Rich Ones, Demand More Building Amenities

Pools, spas, kids' clubs, meeting rooms and wine cellars are often in developers' plans. But regulators turned down a proposed helipad.

Ten years ago residential buildings provided a place to live: an apartment, perhaps a dedicated parking space and a garden.

But Israel’s tastes and demands have changed, and residents, particularly those who’ve reached here from other countries, are demanding more, sometimes a lot more.

In some projects, the pool, spa, children’s club, meeting room and wine cellar make it almost unnecessary to leave the grounds.

“We are in a new era,” says Yaki Briga, owner and CEO of Briga Real Estate. A building must be “a residential experience, a complex product with standards.” Half of Briga’s clients are foreign residents, from Moscow, Paris, London and Miami, “and they bring a culture with them that dictates that high rises have to have certain services. For me it might seem strange to go to the spa in the middle of the day, but for them it’s a routine part of their lives.”

For some of them, the facilities are critical time-savers.

“People are busy and time becomes more valuable,” Briga says. “It is hard for them to get in the car and go to work out, for example. Instead, they can go down the elevator, enter the exercise facility and meet their personal trainer there. Instead of taking the car to the garage, they can ask the management company to arrange it. Instead of going to the mailbox to get your mail, they bring it to your door.”

Not just for the 1%

Even average Israelis are demanding more from their buildings. “The facilities are becoming standard in Israeli real estate,” says Anat Profeta, sales director for Aqua, a residential project in Hadera, south of Haifa, that is being built by Amram Avraham and Effi Capital.

“A client who comes to us has already visited projects in Rosh Ha’ayin and Kfar Yona [southeast and north of Tel Aviv], and we need to create added value to convince him that it would be better for him to actually buy here.

"In addition, even if the client doesn’t need a pool or a spa in the building at the moment, sometimes it will convince him to buy because he knows that he can sell the apartment for more.”

This added value costs money. Ohad Dannus, chairman of the Real Estate Appraisers Association in Israel, says facilities might account for 1% to 2% of an apartment’s purchase price but as much as 30% of the unit’s maintenance fees. “The better and more prestigious the location, the more buyers are prepared to pay more for the facilities, even if they don’t need them,” Dannus says. “The further you are from these areas, the less the potential buyer will be enamored with them, because they can’t permit themselves to pay the added maintenance fees.

“From the standpoint of the developer, it doesn’t always make economic sense, but he invests in facilities because this is his flagship project that he will have his name attached to for many years, and it will promote his sales for other, less-expensive projects.”

Tough decisions for developers

Which facilities a building will include depend on its target buying audience. “When you brand a project, you try to create an experience that doesn’t stop with the apartment,” explains Ido Hagag, CEO and co-owner of Hagag Group.

“In the past, apartments provided us with a place to live and sleep, whereas now we want a view of the sea, a pool, a residents’ club, a sense of luxury. People who pay tens of millions of shekels on an apartment are less concerned about the price because what’s a few thousand shekels more in maintenance fees?”

Developers are sometimes torn between wanting to create a luxury complex and not wanting the maintenance fees to price potential buyers out of the complex. “At our project in Kfar Yona, which is geared for young people, there is no pool because it requires a lot of maintenance, which is reflected in the maintenance fee,” says Briga. “There, we built a garden with a bike path and exercise equipment.” Hagag Group was guided by similar logic. A high rise going up in Tel Aviv and targeting younger buyers will have a pool, but it will be open only to those who buy memberships. This will keep down general maintenance fees in the building.

When money’s not a factor

For the very wealthy, sometimes the sky is the limit - literally. At the Meier on Rothschild project, currently under construction in the heart of Tel Aviv, the builder planned a helicopter pad on the roof for use by the residents, but the Israel Airports Authority wouldn’t approve it.

“Before we began to build, we interviewed potential clients, and the demand for a landing pad on the roof came from three of them,” said Yigal Tzemach, the CEO of Bergrruen Residential, which is building the project.

“Our residents are busy people for whom money is not a factor, while time and convenience are of critical importance. From their standpoint, getting home on a helicopter that lands on the roof is not a privilege but a necessity.”

In contrast to more urban settings, the new Krinitzky neighborhood - north of the Sheba Medical Center at Tel Hashomer, east of Tel Aviv - will feature a 35-dunam (nine-acre) park with a community herb garden. A hill in the center of the park will have local foliage that consumes little water, along with a system that monitors water usage.

Rachel Brizel, marketing VP at Ashdar, which is building the neighborhood with partners Azorim and Tzemach Hammerman, says potential residents also consider the area around their home, and the more green space in the area, the stronger the demand.

“Many of the buyers have left large private homes, and it’s important to them to get such spaces in the new project,” she says. “Therefore we place an emphasis not just on green spaces but also on making them ecological in the full sense of the word.”

Keeping in shape, staying on line

At Trio, an Ashdar project in the Ramat Denia neighborhood of Haifa, physical-fitness facilities are a priority. The pool area is to occupy an entire floor and will include a children’s pool and an exercise room.

Buildings geared for wealthy residents frequently have high-tech meeting rooms. At Meier on Rothschild, for example, a business lounge - with high-speed wireless Internet, outlets for laptops, and a conference room accommodating 30 people - will be at the disposal of residents, many of whom are business people who live abroad most of the time.

And when they finish their work, the residents will be able to enjoy use of a well-equipped kitchen and billiard tables.

The White City Residence project in Tel Aviv’s Neveh Tzedek neighborhood will also have a business lounge. Many of the residents will be from abroad and don’t have offices in Israel, notes Ran Ben-Avraham, marketing VP at Tzemach Hammerman. Instead of borrowing a friend’s office, they can reserve a room in the lounge, he explains.

And at some residential projects, while parents relaxing at the spa or work at the conference center, they can send their kids to the children’s club.

For example, the Aqua project in Hadera will consist of 11 buildings geared to different population segments, and one is being branded as a family-oriented facility featuring a children’s club. It’s decorated with motifs from “Alice in Wonderland” and will have facilities for younger children and for teens, including a game room. And after a tough day at work, some residents might want to raise a glass. The Meier on Rothschild project will have a wine cellar where residents will have individual wine coolers along with a luxury bar seating area.

Similarly, the Yossi Avrahami real estate firm is building a project in north Tel Aviv, an area with a lot of new luxury construction.

The company’s marketing VP, Yaffa Sadan, says that in light of the large number of projects in the area, the company sought to distinguish its project with amenities including the wine cellar.