Rotstein to Build 874 Apartments in Jerusalem's Gilo Neighborhood
Translated & summarized from Ice by baba
Rotstein is launching a major urban renewal project in Jerusalem's Gilo neighborhood, replacing 166 old apartments with 874 new ones and commercial space. The project is expected to generate 1.87 billion shekels in revenue with estimated costs of 1.62 billion shekels. While larger than a previous project, its projected profitability margin is lower due to anticipated sales prices. Construction is expected to begin in three to five years.
The story in 5 lines · by baba
- Rotstein will build 874 new apartments in Jerusalem's Gilo neighborhood, replacing 166 existing units.
- The project is projected to generate 1.87 billion shekels in revenue with estimated costs of 1.62 billion shekels.
- Agreements have been signed with over 67% of the rights holders for the development.
- The new project is larger but has a lower projected profit margin than a previous Rotstein development.
- Construction is expected to commence in three to five years, pending approvals and permits.
Real estate company Rotstein is advancing a new "pinui-binui" (demolish and rebuild) urban renewal project in Jerusalem's Gilo neighborhood. The project involves demolishing 166 existing apartments and two commercial units to construct approximately 874 new apartments and about 900 square meters of commercial space. Rotstein, partnered equally with another company, announced it has signed agreements with over 67% of the rights holders in the complex, located on Ha'ayala and Shlavi streets.
The projected revenue for the development is around 1.87 billion shekels, with estimated construction and execution costs of 1.62 billion shekels. This forecasts a gap of about 250 million shekels between revenues and costs, with Rotstein's share estimated at 127 million shekels. These figures are preliminary, based on projected sales prices and construction expenses, not guaranteed net profit.
Under the plan, current apartment owners will move out and receive new units, while the developers will fund the complex's construction, partly through selling the additional apartments. Of the 874 planned units, about 708 are part of the joint venture. New commercial spaces will also be established alongside the residences.
This project follows Rotstein's September announcement of another urban renewal project in Jerusalem's Pat neighborhood, involving the demolition of 64 apartments for 237 new ones. While the Gilo project is larger and expected to generate higher overall revenue, its projected profit margin is lower. The Gilo project's estimated sales prices are 27,000-30,000 shekels per square meter, compared to 31,000-32,000 shekels per square meter for the Pat project.
Despite securing agreements with many rights holders, construction is still some years away. The Gilo project requires approval of a new building plan, fulfillment of conditions with rights holders, a building permit, and a bank financing agreement. Rotstein estimates the building permit will be obtained within three to five years, between 2029 and 2031, assuming planning processes proceed as expected. The company noted that factors beyond apartment volume and revenue, such as construction costs, resident compensation, and project duration, also impact final profitability.
