Why do Russian oligarchs choose Israel for real estate purchases?

Why do Russian oligarchs choose Israeli real estate?
How do Russian oligarchs invest in Israeli real estate?

Growing interest in Israeli real estate

Over the past decade, there has been a sharp increase in the interest of Russian citizens in Israeli real estate. Among these buyers are influential businessmen and oligarchs, who most often choose elite neighborhoods and the most expensive properties. According to a 2015 Forbes report, approximately 20% of Russia's wealthiest people are Jewish. This explains why many of them are inclined to choose Israel for their second homes.

In addition to attractive investment opportunities, the country also stands out for its legal system, which protects owners and ensures that local citizens are not extradited to other states.

Wealthy Russian-speaking customers

Among Russian-speaking buyers are extremely affluent people who favor prestigious neighborhoods such as Herzliya-Pituach, northern Tel Aviv and Ramat Aviv-Gimel. Their purchases are influencing a surge in prices and shaping new trends in the local real estate market.

Investments of Russian oligarchs

The most striking examples of Russian oligarchs' investments in Israeli real estate can be traced back to the example of Roman Abramovich.

Roman Abramovichranked #12 by Forbes, began his investment activity in Israel by investing in local high-tech startups, including Via, a transportation app developer, Iangels, a crowdfunding platform, and Storedot, a creator of bio-batteries.
In April 2015, he made a landmark purchase - he bought a plot of land with the Varsano Hotel in the prestigious Neve Tzedek neighborhood in Tel Aviv. The transaction amounted to $25 million, and in addition to the hotel, he had 1500 square meters of adjacent land at his disposal.
It is believed that Abramovich intends to transform this complex into his personal residence in Israel. This would be his first property in the country, as he previously tried to buy the historic House of Shlush building but failed to agree on a price.

Other players in the market

The Israeli real estate market is also active in theValery KoganHe is a co-owner of Moscow's Domodedovo Airport. In 2009, he bought the most expensive penthouse in Israel at the time, located in the Sea One complex in Tel Aviv, paying for it about 28.5 million dollars.

Koganhas been spotted investing heavily in various construction projects and his ties to influential politicians, including Benjamin Netanyahu.

Conclusion

Thus, it can be seen that Russian oligarchs are actively investing in the Israeli real estate market. Their investments concern both residential and commercial real estate. Israel, with its stable legal system and attractive investment conditions, is an interesting destination for these investors, who seek to find new investment opportunities, thus contributing to the growth of prices in the local market.

The beginning of an exciting story

On the 22nd level of the Sea One residential complex, located off the Mediterranean coast, a fascinating story begins. Valery Kogan, a well-known Russian entrepreneur, managed to acquire a plot of land in the town of Caesarea last year. This plot occupies an impressive 11,000 square meters, it previously contained five villas, for which he had to pay17 million dollars.

Immediately after the completion of the transaction, Kogan decided to demolish the old buildings, intending to build in their place a luxurious mansion, the cost of which was estimated at50 million dollars. However, the financial crisis of 2008 interfered with his plans and the land had to be put up for sale for .30 million dollars.

Back to building plans

However, some time later, when the economic situation became more stable, Kogan took the site off the market and resumed his grandiose construction plans.

Investment failures

But investments in Israeli real estate have not always brought success to Russian businessmen. This history includes not only successes, but also failures. One vivid example of such a failure was the case of Shalva Chigirinsky.

Inin 2009at the request of Russian bank VTB, the London High Court seized most of its assets.
This decision led to severe consequences for Chigirinsky, shortly after which the Russian prosecutor's office initiated a probe into embezzlement from the oil company Sibir Energy PLC.
As a result of the events on the agenda, the oligarch, who has Israeli citizenship, was forced to travel to Tel Aviv.

Life in Tel Aviv

Shalva bought a luxury apartment in Tel Aviv, but financial problems suddenly caught up with him and he was forced to sell the property at the lowest possible price tag to pay off his debts. His 113-meter apartment, located in the heart of the city, was put up for sale for1.07 million dollarsThis fact created a furor among local realtors and became a real sensation in the market. This fact created a sensation among local realtors and became a real sensation on the market.

Leonid Nevzlin's successes

Another notable figure in recent years has been Leonid Nevzlin, who in the2003left Russia and established a life in Israel, obtaining citizenship there. He purchased a villa worth3.7 million dollarson the Israeli Rublevka in Herzliya Pituach.

However, his most impressive real estate accomplishments occurred in thein 2014He became the owner of the most expensive apartment in Jerusalem in the Waldorf Astoria complex. It's an apartment with an area of496 square metersit cost him10 million dollarsand is located in the part of the complex that formerly housed the British administration.

Conclusion

Thus, each of these stories highlights how complex and multifaceted is the process of investment activity of oligarchs in the Israeli real estate market, where success is often next to failure.

Conclusion

At the end of this article, I would like to emphasize that over the past ten years, the presence of Russian buyers in the Israeli real estate market has increased significantly. This phenomenon has become noticeable primarily due to the active investments of oligarchs, who choose not only prestigious locations, but also favorable conditions for investing capital. Israel is becoming increasingly attractive to wealthy Russians and citizens of CIS countries who valuelegal safeguardsand a high degree of protection for their interests.

For example, big names like.Roman AbramovichandValery KoganIn addition to acquiring luxury real estate, they have also made significant contributions to Israeli start-ups, demonstrating a mutually beneficial cooperation. These investments help develop the Israeli economy, and the owners get the opportunity to establish their residences in a stable country with high standards of living.

Risks and anti-records

Nevertheless, the history of real estate acquisition by Russian oligarchs is not devoid of contradictions and anti-records. ExperienceShalva Chigirinskyillustrates the high risks associated with international investments and legal aspects. His case emphasizes the importance of careful site selection and competent legal support of transactions.

Market trends

One way or another, trends in the Israeli real estate market show that Russian buyers remain active players and their interest in this market is not waning. Israel continues to attract an increasing number of wealthy clients, which creates a unique economic link between the two countries and opens up new horizons for future investments.

Israeli real estateis becoming a preferred investment destination for wealthy Russians.
Big businessmen like Abramovich play an important role in the development of Israel's startup ecosystem.
Risks related to legal aspects may affect real estate transactions.
The continued interest of Russian buyers emphasizes the economic connection between Israel and Russia.

Ultimately, as we watch the situation unfold, the importance of legal issues and an analytical approach to investment should not be overlooked, taking into account both the stability and thepotential risks.