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 BACKGROUND & ECONOMICS

As befits a geographically small country undergoing rapid economic development, Israel boasts a very active real estate market. Construction and development in the market is dominated by the private sector, while the land market is dominated by the government. The real estate market in Israel has undergone and is continuing to undergo a significant process of maturation, moving from a market characterized by limited choice and options and low quality construction, to one which now boasts a wider range of alternatives in terms of location, size, building quality, and amenities.

 
The foreign investor seeking to purchase or lease a property in Israel for investment or for corporate use should familiarize himself with the operation of the market in Israel, in terms of pricing dynamics, location alternatives, the types of property available, and the legal and financial framework within which the Israeli market operates.
 
Prices in the Israeli real estate market are delineated in dollar terms, a convention which the market has adopted due to the fluctuations of the shekel, thus providing a steady frame of reference when comparing offers, and negotiating. Once contracts are signed transactions are converted to the shekel amount and linked to the Israeli inflation index. Prices are quoted per rentable square meter, called "gross space". The rentable meter is measured from the outside wall, and includes the relative portion of the building's common area and service core (lobby, elevators, stairwell, machinery rooms, etc.). The difference between gross and net space ranges from 10 - 15% in light industrial properties, to 25 - 35% in fully serviced office towers.













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