Land worth 150 million shekels purchased by developer for 800 thousand
Only one company participated in an Israel Land Authority tender in Safed, submitting a minimum bid for the land. Meanwhile, Yigal Damri and Megido won land for the construction of hundreds of housing units in Sderot and Ofakim.
Developers Yigal Damri and Megido, operating under the urban renewal company Aura, have won a massive tender for the construction of over 1,000 housing units in the Afikey Nahal neighborhood of Ofakim. This neighborhood is among the fastest-growing in Israel and continues to expand despite a high supply of apartments.
Damri paid 64.8 million shekels for the land, approximately 22% below the appraised value. Development costs are estimated at 78 million shekels, totaling about 320,000 shekels in land costs per housing unit. Megido won its plot for 55.8 million shekels. Although this was the second-highest bid, the company won because Damri held the top bid and developers are restricted to one win per tender. Damri will build 511 apartments, while Megido will build 491, with the latter paying less than 270,000 shekels in land costs per unit.
Another major tender was closed in Sderot for approximately 2,800 housing units, though land for 100 units remained unsold. Winners included Y.H. Damri (138 apartments), Asum (hundreds of units), and Megido and Abu Magurim, who will build 176, 146, and 114 units, respectively.
The project in Sderot (visualization: Redman and Ravkal Architects)
Unlike the Ofakim tender, the Sderot project focuses on discounted apartments, with a portion allocated for the free market. This underscores the Israel Land Authority’s policy of prioritizing the "Target Price" program.
Tenders were also finalized in Arad, Mitzpe Ramon, and Safed. In Safed, land for 618 apartments was marketed, but the company Avnei Derech won rights for only 367 units as no other contractors submitted bids. With no competition, Avnei Derech submitted a near-zero bid of about 400,000 shekels for the entire land plot, focusing instead on paying 80 million shekels in development costs.
The low bid reflects the company's awareness of low demand and high development costs. In the context of "Discounted Apartment" tenders in cities like Safed, a land cost of 200,000–240,000 shekels per unit is considered a reasonable bid.
