Beer Sheva: Best place for a prospective investment

Priyanka Choudhury

Beersheba, also Be’er Sheva, is the largest city in the Nagev desert of southern Israel. Often referred to as the “Capital of the Negev”, it is the center of the fourth most populous metropolitan area in Israel, the eighth most populous Israeli city with a population of 207,551, and the second largest city with a total area of 117,500 (after Jerusalem) dunams, (a measure of land area used in parts of the former Turkish empire, including Israel, where it is equal to about 900 square metres.

With an ancient history, and long used as a bedouin encampment, the modern history of Beersheva began at the start of the 20th century when a permanent settlement was established by the Ottoman Turks. The Battle of Beersheba was part of a wider British offensive in World War-I aimed at breaking the Turkish defensive line from Gaza to Beersheba.

Be’er Sheva is becoming Israel’s real estate investment capital. After a period of stagnation, Be’er Sheva has in recent years attracted more and more investors from the center of the country, who are capitalizing on the city’s advantages – particularly Ben-Gurion University of the Negev, many of whose students rent apartments that yield their owners handsome returns.

First, it is important to remember that every high yield comes with risks. From the beginning of this decade until last year, apartment prices in Be’er Sheva declined steadily, cutting ruthlessly into the yields produced by rental properties. The city’s distance from Tel Aviv also makes it difficult for owners from the central region to manage and oversee their properties, such that yields from Be’er Sheva properties have to be even higher in order to attract investments.

As an investor, there is an advantage to entering the market in the middle of the year: Purchase prices are lower than in the summer, and most apartments come with a tenant with a rental contract, which saves the buyer the bother of finding a new tenant.

Another advantage of Be’er Sheva is that prices are low compared to the Tel Aviv region. The capital of the Negev offers attractive properties, located near the university and with high demand, for up to NIS 300,000. If you have NIS (New Israeli Shekel) 500,000, the sky’s the limit – but you need to be choosier before spending so much money on an apartment in this city.

Anglos are increasingly looking to this region for residential opportunities because of the more reasonable cost of living relative to the rest of the country, accessibility to employment centers, high-quality environment, and world-class educational and research institutions. The Anglo community in Be’er Sheva is known to be warm and welcoming.

With the Intelligence and Communication corps transferring to the city, a successful university, and a brand new entrepreneurial center, it seems that even the greatest skeptics are beginning to understand that the Mayor of Be’er Sheva, Rubik Danilovich, is not hallucinating when he declares that “the city will be a world-class innovation leader”.

Name the first three things that come to mind when you think of the Israeli Negev desert. If you came up with words like dust, poverty and camels, you are thinking of the old Be’er Sheva. If, on the other hand, you thought of words like IT, innovation and entrepreneurship, your name might be Rubik Danilovich. The energetic mayor of Be’er Sheva is hoping that, in the near future, he won’t be the only Israeli who associates the “Capital of the Negev” with words that today more often bring to mind  Tel Aviv or Jerusalem. He believes the city is set to become world-renowned as a center of innovation and technology, a far cry from the shabby desert image it has endured during his tenure.

In the past 15 years, Be’er Sheva’s population has doubled, boosted by tens of thousands of immigrants as well as young and veteran Israeli couples who have made Be’er Sheva their home. This prosperous university-city now has commercial and industrial centers that serve the over 600,000 residents of the city and its greater metropolitan region.

Be’er Sheva – and the surrounding Northern Negev region – is booming, and several factors are contributing to this growth. The upgrading of the national railway and the building of Highway 6, Israel’s major toll road, allow those who work in the center of Israel to commute with greater ease. The construction of the Army’s expansive training complex known as Ir HaBahadim (“City of Training Bases”), as well as the development of new private industry in Be’er Sheva and the surrounding areas are also contributing to the region’s economic growth.

Since the early 90’s, when Be’er Sheva received ‘Development Area A’ status for capital investments and saw a surge in development, the city has become an attractive location both for entrepreneurs and investors, with industrial zones covering some 1,750 acres south of the city.

In addition, the Advanced Technology Park spanning 100 acres is currently being built adjacent to Ben-Gurion University as a joint venture of the university, the municipality and the American KUD company. This park is going to be one of the most advanced parks in the country, facilitating integration of leading hi-tech companies (such as Ness, ECI, Deutsche Telecom, the IDF’s Teleprocessing Division) in one location.

For more information on Be’er Sheva, you can contact the nearest Israel embassy or consulate.

Priyanka Choudhury is the Assistant Editor, Blitz