The residential area surrounding Mahaneh Yehuda may undergo change after some high-end construction projects are completed.
By JOHN BENZAQUENMahaneh Yehuda(photo credit: Marc Israel Sellem/The Jerusalem Post)
The area of Mahaneh Yehuda, with Jerusalem’s bustling market at its center, is considered one of the capital’s major hubs of commerce. But today, it is also an interesting residential area.I use the word “interesting” because I would not call it an important residential area, but it does include very high-end real estate projects such as the Batei Saidoff, along with more modest accommodations atop the market as well as in the areas around Agrippas Street. In many ways, this is a combination unique to Jerusalem and Israel as a whole.It is a relatively small area that combines the low-end commercial activity associated with an oriental bazaar with high and low-end homes.Zvika Barak is the head of commercial real estate in the Jerusalem branch of the Anglo-Saxon brokerage. He believes that the Mahaneh Yehuda market is undergoing a transition which is driving commercial real estate prices sky high – both in the market itself and the surrounding areas.“Mahaneh Yehuda is undergoing a metamorphosis of sorts. In the not-so-distant past it was [considered] a market which specialized in foods, fresh fruits and pickled vegetables such as olives. Now all this is changing and the Mahaneh Yehuda area is gradually converting itself into something akin to the Grand Bazaar in Istanbul,” he told In Jerusalem.“[In addition to] the conventional market wares, we see other wares: jewelry, gourmet restaurants and stalls.We see that the market is undergoing a commercial upgrade and this has a very important bearing on realestate prices,” Barak added.And indeed it has.The rights to stalls in the Mahaneh Yehuda market are not sold in the traditional sense of the word – they are considered “selling points” requiring special authorization from the municipality. As such, what is sold are the rights acquired from the municipality – for hefty prices.For example, the rights to a stall with a street area of 20 sq.m. costs from NIS 1.5 million to NIS 2m. The stalls near the entrances fetch the highest sums.Bona fide shops, which may also set up stalls in front of the entrances, can cost enormous sums. A 100 sq.m.shop midway between both ends of the market can cost upwards of NIS 5m., or NIS 50,000 per sq.m. Prices for shops in the immediate area can cost 10 percent less.The market’s high real-estate prices are justified by the high profit margins. A large, well-positioned stall can generate monthly gross earnings of nearly NIS 100,000, or net earnings of at least NIS 45,000.No wonder rentals for such stalls, if available at all, can reach upwards of NIS 15,000 per month.The residential real estate market is not affected that much by the commercial activities in Mahaneh Yehuda.Some feel this may change with the completion of Batei Saidoff in early 2013. The compound is practically adjacent to the greater Mahaneh Yehuda area, and includes a restored late 19th/early 20th century residential, onestory building constructed by one Yitzhak Saidoff. The original building is being reconstructed, with a 23-story residential tower being built behind it.Ashdar Building Co., the project’s developer, believes its high-end compound will have a marked influence on the area, both from a commercial and residential perspective.It is true that the original one-story building is being beautifully restored. It will no longer serve as a residential building but as a center of commerce, with both the ground and first floor rented out to businesses, shops and art galleries.These commercial enterprises will be of a much higher standard than those in Mahaneh Yehuda, and the idea is to create a commercial “island” that will cater to the needs of affluent customers who are willing to pay premium prices for fashionable goods.The same holds true of the residential tower block. Its 23 stories will have 90 apartments ranging from threeto six-room penthouses and duplexes. The top-floor apartments will have panoramic views of old Jerusalem and its environs. The public areas will include a swimming pool, spa, gym, social room and synagogue.Because the building is expected to attract affluent Jews from the Diaspora, it will also feature concierge service and 24-hour surveillance.Batei Saidoff is planned to be a luxurious, expensive oasis. Prices are high – over NIS 1m. – but it is debatable whether it will influence the real-estate scene in the surrounding area. And it is also doubtful whether a similar building project will be built in the area.The residential real estate scene in the area is much more modest.Moti Cohen, of the Jerusalem branch of the Anglo- Saxon brokerage, told In Jerusalem: “The dwellings in the area are modest and they attract families and individuals with limited financial resources. They also attract investors, as well as buyers with a bohemian tendencies.Some of the dwelling in the area are newly built apartment buildings. Others were built long before that in the ’40s and ’50s. There are also some picturesque, small private dwellings of one or two stories, some with their own yard or patio.”The houses are small, with three rooms at the most; Some are on two floors but practically none have parking.The small houses usually have an area of up to 50 sq.m. and cost from NIS 1.2m. to NIS 1.4m.While this is reasonable by Jerusalem standards, it is not very practical for modern living or raising a family.Larger, more conventional three-room apartments cost NIS 1.35m. on average, while the few large penthouses available can cost from NIS 2.5m. to 3.5 m.The area attracts investors because it is easy to rent accommodations there. It is also relatively close to the Hebrew University campus at Givat Ram (a brisk 15 to 20-minute walk), which makes it a popular place of residence for students. RECENT TRANSACTIONS IN THE AREA • A small, two-room apartment on the first floor, in a building constructed two years ago, was sold for NIS 1.3 million.• A two-room, 47-sq.m. private house with a patio and high ceilings of over 4 meters was sold for NIS 1.65m.• A three-room, 60-sq.m. third-floor apartment was sold for NIS 1.4m.• A 30-sq.m. apartment, in an older building in need of renovation, was sold for NIS 865,000.• A three-room, 65-sq.m., partly furnished apartment was rented for NIS 4,600 per month.• A two-room, private period house was rented for NIS 3,750 per month.• A two-room, 35-sq.m. apartment on the third floor, with no elevator, was rented for NIS 2,900 per month.
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