valuation of real estate rights block 6453, sections of ... · hod hasharon /19,123,125 / 6453...

EYAL TEDDY HAREL - ECONOMIST & REAL ESTATE APPRAISER

שמאי מקרקעין , כלכלן -איל טדי הראל

37 Shlomo Hamelech st. Kiryat Ono, 55421 Tel: 972-3-6093320 Fax: 972-3-6093324

www.ethltd.com [email protected] Hod Hasharon/ 19,123,125/ 6453/ 1349פר

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חבר לשכת שמאי מקרקעין בישראל

Valuation of Real Estate Rights

Block 6453, Sections of Parcels 19, 123, 125

in Western Hod Hasharon

Submitted to Hamizrahi Tefahot Bank

Commissioned by the Hasharon Development Economic Company Ltd.

January 2010

Parcel 123

Parcel 19

Parcel 125





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ד "בס

Att: Hamizrahi-Tefahot Bank

January 27, 2010

our ref: PR1349/2010

Dear Sir or Madam,

Re: Appraisal of rights in real estate

Block 6453, Sections of Parcels 19, 123, 125 in Hod Hasharon

1. Purpose of the Appraisal

The Sharon Development Economic Company Ltd has commissioned me to appraise the market value

of the rights in the above referenced property. The following valuation assumes unrestricted market

conditions in a transaction between a willing buyer and a willing seller. Further it assumes that, subject

to a signed Cooperative Land-use Agreement and to the buyers' rights therein, professional

management is provided in the re-zoning process.

For this purpose:

I visited the offices of the local Planning and Zoning Committee, where I studied the relevant

City Zoning Plan, which includes the Masterplan for the city of Hod Hasharon.

On December 23, 2009, I visited the site of the property and its surroundings.

I studied the land registry – an internet print-out which I had issued for the property.

I conducted a study of property prices in the vicinity and performed the necessary calculations

and adjustments.





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2. Subject of the Appraisal

One dunam and 200 sqm stemming thereof, which is part of the parcels referenced above, located

west of the Hapoalim neighborhood (hereinafter, “the Property”) is the subject of this appraisal.

3. Statutory Rights

3.1 Registry Extracts

The following emerges from copies of the registry, extracted online on January 24,

2010 (Information from the Ledger of Rights administered by the Petah Tikva Bureau

of Land Registry), which I had issued:

3.1.1 Registry extract of Parcel 19

Block 6453 Parcel 19

Registered area of the parcel – 35,582 sqm

Privately owned, registered in the names of the following owners:

Name Share in

the

property Ester Zvia Shitreet 3/16

Shmuel Shitreet 3/16

Yaakov Shitreet 1/16

Zvia Shitreet 1/16

Hagit Shitreet 1/16

Zvia Freidman 1/12

Yaakov Yariv 1/12

Bosmat Shlush 7/96

Sivan Yesha 7/96

Esther Zvia Wertzel Shitreet 1/16

Shmuel (Shitreet) Yariv 1/16





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Privately owned, registered in the names of the same owners and in the

same shares as Parcel 19. (Shitreet = Straight)

Pursuant to the Roads Ordinance, a caveat is registered to the State of

Israel, Regulation Collection 6578 dated April 16, 2007, pp. 709-711.




Privately owned, registered in the names of the same owners the same

shares as in parcel 19. (Shitreet = Straight)

3.2 Purchase Agreement

According to information I received, the developer plans to purchase one half of the

rights in the above parcels. I was not shown a purchase agreement or draft agreement.

3.3 Cooperative Land-use Agreement

The following points are subject to a proposed Cooperative Land-use Agreement:

The rights and duties of the parties, appointment of service providers and the

Representative;

The Representative is granted broad authority, including the authority to replace

service providers. All actions designed to effect re-zoning and future usage rights is

to be performed by the Sharon Development Economic Company Ltd;

Payment terms to service providers and the Representative;





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The rights of the parties to the agreement stem from their rights in the Property, and

will be determined according to the size and type of units allocated to the Property

in the Re-zoning schedules;

The parties intend to cooperate, through their representative as named in the

agreement, to rezone the land from agricultural use to land zoned for construction;

Principles and procedures for the auctioning of the units ;

Principles for the transfer of rights;

Principles for dispute resolution.

4. Description of the environs of the Property

4.1 The Property is located in the western section of Hod Hasharon, bordering Hapoalim

neighborhood to the west and extending to Highway 4. Parcel 123 is located to the

west of Highway 4.

4.2 The Property is adjacent to existing residential neighborhoods. Bordering to the east is

Hapoalim neighborhood, consisting of older private homes, many of which have been

recently renovated. To the south, construction is more recent, comprising of private

homes, garden and rooftop apartments in the relatively new Haprahim neighborhood.

The neighborhood is bound on the south by Habanim Street. Sharet Street, to the north

of the Property, links the neighborhood to Ramot Hashavim and provides access to the

area west of Highway 4, Givat Chen, and Ra’anana.

4.3 The streets adjacent to the Property are: Borochov and Hartzfeld to the east, Hanarkiss,

Havered and Hatzvi to the south.





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5. Description of the Property

5.1 The Property is made up of Parcels 125, 19, and 123 in Block 6453 in Hod Hasharon.

5.2 The following table presents the registered areas of the parcels:

Parcel Area (sqm)

19 39,582

125 67,383

123 65,096

Area of Parcel 123 allocated to

roads 1,152

5.3 Parcel 19 is located immediately to the west of a built-up area, Hapoalim

neighborhood, characterized by high-end private homes, and north of Haprahim

Hapoalim

neighborhood

The

Property

Haprahim

neighborhood





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neighborhood, characterized by new private homes, garden apartments, and rooftop

apartments. Borochov Street constitutes the eastern boundary of the parcel.

5.4 The parcel is rectangular in shape, the land is level and covered with weeds.

5.5 Parcel 125 is located immediately west of Parcel 19, and is bordered to the south by

Haprahim neighborhood and Highway 4 to the west.

5.6 The parcel is triangular in shape, and the hypotenuse constitutes the boundary with

Highway 4.

5.7 The land is hilly and covered with weeds.

5.8 Parcel 123 is located to the west of highway 4, in the jurisdiction of Hod Hasharon. It

borders a residential area belonging to Ramot Hashavim (new private homes) to the

west, Highway 4 to the east, and Sharet Street to the north.

5.9 The parcel is triangular in shape and the hypotenuse constitutes the boundary with

Highway 4.

5.10 The land is level, with a slight slope toward Highway 4. The land is mainly cultivated.





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5.11 Photos of the Property and surroundings, 23 December 2009

125וחלקה 19לחלקה

Parcels 19 and 125

Parcel 19

Borochov Street cr. Hartzfeld Street,

Hapoalim neighborhood View from Parcel 19 to Haprahim

neighborhood

View from the south (Haprahim

neighborhood) to Parcels 19 and 125

Parcel 123 – view from Sharet Street





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6. Planning Status

Following is the planning status of the Property as I found it to be and as I was informed by the

Hod Hasharon Zoning Committee office.

6.1 National Outline Plan No.35

Pursuant to the plan, the Property is defined as an urban zone.





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6.2 National Outline Plan #3 – Roads – Amendment No.1

Pursuant to the provisions of the Plan, a section of Highway 4 is defined as a highway.

The setback from the highway to the buildings is 150 meters.

The Local Outline Plan may establish a different distance, taking into consideration

local conditions and the conditions required to prevent environmental hazards, and

subject to the approval of the National Planning and Zoning Council or a committee

appointed for this purpose. An inquiry with the Committee revealed that an easement

of 75 meters may be permitted.

6.3 Regional Outline Plan #21/3

Parcels 19 and 125 – urban development zone

Parcel 123 – agricultural / undeveloped rural landscape zone





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6.4 Hod Hasharon Master Plan

Pursuant to the Hod Hasharon Master Plan, the Property is defined in an area

designated for development and roads.

6.5 Local Outline Plan

Mandatory Plan R6 dated March 26, 1942

Pursuant to the provisions of the plan, the Property is defined as an area designated for

development.

Minimum plot size – 1,000 sqm

Total building area – 150 sqm

Auxiliary buildings –25 sqm.

6.6 Additional planning information

As I was informed by the Local Zoning Committee:

6.1.1 Parcels 19 and 125 in the area designated for development are adjacent to the

existing Hapoalim neighborhood and therefore it is plausible that these parcels

will be zoned for the construction of private homes at a lower density

compared to areas that are farther from the neighborhood, where it is plausible

that rooftop and garden apartments will be approved at a density of up to 5

units per dunam, gross.

6.1.2 Regarding parcel 123 located to the west of Highway 4, I was informed that the

parcel is part of an overall zoning plan for the area, MS/1–Taas Hasharon, and

cannot be planned separately at present.

6.1.3 The three parcels which constitute the Property are currently zoned as declared

agricultural land.

6.1.4 I was informed that the buyers/developer plan to initiative a city re-zoning plan

to promote development on the Property.





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7. Comparison data

The following Data is taken from real estate database, investigative features published in the media,

and asking prices.

7.1 The price of land for garden and rooftop apartments in the Greenberg complex is

approximately NIS 1 million per unit.

7.2 In the Efron sub-division in west Hod Hasharon, a 310-sqm lot was sold for NIS

1,680,000.

7.3 The Marker published the following information on December 18, 2009: Lots in

western Hod Hasharon have risen in price by 35%. A lot in Ramat Hadar in Hod

Hasharon currently costs NIS 2.76 million.

7.4 A private 300-sqm home in Hadar neighborhood, on a 300-sqm lot was sold for NIS 4.5

million.

7.5 A 200-sqm rooftop apartment located at 12 Ben Gurion Street was sold for NIS 2.99

million.

7.6 A 270-sqm lot in Hapoalim neighborhood is offered for NIS 1.5 million.

7.7 A 260-sqm cottage on a 250-sqm lot located on Halotem Street in Haprahim

neighborhood is offered for NIS 3 million.

8. Factors and considerations

In preparing the evaluation of the Property, the following factors and considerations were taken

into consideration:

8.8 The location of the Property in west Hod Hasharon, adjacent to residential

neighborhoods Haprahim and Hapoalim, up to the boundary with Highway 4, and

beyond Highway 4.

8.9 The fact that Parcels 19 and 125 border on built-up areas that encircle the parcels on the

east, south and partially the north.

8.10 The statutory rights – unspecified private ownership subject to a cooperative land-use

agreement that will be entered into in the future.





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8.11 The planning status applicable to the Property, defined as a zone for development and

roads. It was assumed that the three parcels which comprise the Property will be

included in a single plan applicable to the entire area.

8.12 It should be noted that the density per dunam in many plans in Hod Hasharon is 7-9

units (e.g., HR/1200, HR/1201, HR/1302 in planning, HR/1202 in planning): It is

reasonable that the density in the Property will be lower (3-5 units per dunam, gross)

due to its location. The working assumption is that construction will be permitted on

parcels 19 and 125 only and parcel 123 will be appropriated in entirety for public use.

8.13 The value of the rights refers to 1 dunam and to the value of 200 sqm of land of

unspecified ownership, which does not necessarily reflect land for future units, but is

accompanied by a cooperative land-use agreement (the principles of which are noted

above) and involving an engagement with a specific developer/seller.

8.14 The change in value of the land under different density scenarios does not affect the

average, since the value of land for private homes is higher than the value of land for

garden/rooftop apartments.

8.15 The estimation of the value of the Property entailed adjustments required to take into

account the delay until a detailed plan is approved (7-10 years), the estimated

development and construction costs, and expected Land Appreciation Tax.

8.16 This appraisal refers exclusively to an area of 1 dunam and 200 sqm, subject to the type

of engagement involving the Property, and should not be used to infer the value of a

larger area.

8.17 Transactions and the prices of apartments, lots, and houses and similar plots in the area,

after adjustments and calculations, and the state of the real-estate market and current

level of demand.

8.18 The current state of the real-estate market in general, and specifically the real-estate

market for plots and apartments in the area.

8.19 This appraisal is correct on the date of its issue, and includes VAT.





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8.20 A deduction of 15% applies to a rapid sale (“fire sale”).

9. The Appraisal

Taking into account Section 8 above, and subject to all the above, I estimate the value of the

ownership rights in the above-referenced Property, comprising 1 dunam of parcels 19, 125, and

123, in Block 6453, within the following range:

- One Dunam: NIS 1,200,000

- 200 sqm: NIS 250,000

This appraisal was prepared under the assumption that the rights in the above Property are free

and clear of any debt, lien, and/or third party right of any kind, and free and clear of any

possessor. I hereby affirm that I have no interest or part in the above-referenced property and

my evaluation is issued to the best of my knowledge, understanding, and professional

experience.

And in witness thereof I set my hand below on this day, January 27, 2010.

Eyal Teddy Harel

Real Estate Appraiser and Economist

valuation of real estate rights block 6453, sections of ... · hod hasharon /19,123,125 / 6453...

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