Bet VaGan Executives Discuss Tel Aviv Real Estate Pressures and Expansion
Bet VaGan executives discuss Tel Aviv's cooling real estate market, margin pressures, and the strategic pivot toward large-scale urban renewal projects in Haifa and Netanya.
The real estate market in Tel Aviv is facing unprecedented challenges, particularly in high-demand areas like Kikar HaMedina, according to senior executives at Bet VaGan. While capital is available among affluent buyers, general sentiment, macroeconomic pressures, and geopolitical uncertainty are pushing potential purchasers to adopt a wait-and-see approach.
"The biggest sales challenge today is in the heart of Tel Aviv, around Kikar HaMedina," says CEO Ronen Akavia. "There is fierce competition with very little differentiation from project to project. Everything looks more or less the same, and buyers have considerable inventory to choose from unless you hold the exact address they desire."
Rom Shahar, a director at Bet VaGan and a member of the Shahar family—known as the controlling owners of the Maccabi Haifa football club and vehicle importer Meir—notes that market conditions inside Tel Aviv contrast sharply with secondary cities. "The problem in the market today is not a lack of money. Certainly not for the specific demographic buying in districts 3 and 4 in Tel Aviv—usually couples for whom this is not their first apartment," Shahar explains. "The problem is that the general media sentiment, government actions, and political and security uncertainty are driving many potential buyers to hold back."
Transition to Public Markets and Expansion
Founded in 2011 as a private, non-traded investment fund by Alona Bar On, Itai Hoz, and Gidi Moses, Bet VaGan initially focused on urban renewal projects in central Israel. In 2021, backed by institutional heavyweights like The Phoenix, the company transitioned into a public firm and completed an IPO on the Tel Aviv Stock Exchange (TASE) in March 2022.
In 2023, the Shahar family acquired a significant controlling stake, investing NIS 150 million. Today, the company trades at a market capitalization of NIS 277 million, having navigated a volatile market environment while expanding its footprint beyond the greater Tel Aviv area into major coastal developments in Netanya and Haifa.
Megaprojects Outside Tel Aviv
To buffer against shrinking margins in central Tel Aviv, Bet VaGan has channeled its growth into large-scale urban renewal ventures. The company's flagship developments include the TOPIA project in Bat Galim, Haifa, executed in partnership with Israel Land Development Company (ILDC), featuring 715 new residential units, and the "Ofek HaYam" project in Netanya, built alongside Africa Israel with approximately 745 residential units.
According to company figures, Bet VaGan's expected revenue share from these two joint ventures stands at approximately NIS 1.53 billion, with a projected gross profit of roughly NIS 329 million. Shahar emphasizes that the company's reputation and financial backing provide essential reassurance to tenants facing complex relocation during urban renewal.
Outlook for 2027
Addressing the broader outlook, Akavia outlines three core macroeconomic conditions necessary for a sustained market recovery. "We expect three cumulative conditions to occur: continued interest rate cuts, even if they don't happen tomorrow; political certainty; and security quiet. If we are in that position by 2027, national sentiment will improve and we will see a certain recovery."
