Oligarchs in Israel: top property purchases by Russia’s wealthiest men
Oligarchs from Russia and CIS have developed a taste for Israeli real estate. These unique
About 20% entrepreneurs on the Forbes “200 richest business people of Russia” (2015) are Jewish, so it’s no surprise that they choose the Holy Land for a second home. The attraction lies in certain legal guarantees enshrined in Israeli law rather than lucrative investment prospects however. In particular, it does not extradite its citizens to other states. Some of Russia’s most famous HNWIs have bought homes in Herzliya Pituach, Northern Tel Aviv, Ramat Aviv Gimmel, setting records on local real estate markets.
Men making waves in the property pool
Roman Abramovich and Varsano Hotel, Tel Aviv: $25M
Businessman Roman Abramovich, number 12 on the Forbes list, bought the Varsano Hotel in Tel Aviv's
Varsano, the first property to be bought by Mr Abramovich in Israel, is expected to become his private residence while he develops his local investment portfolio (focused on
Valeriy Kogan, the Tel Aviv penthouse and Caesarea villa: $128.5M
Valeriy Kogan, billionaire
Mr Kogan didn’t stop setting records there: he bought 11,000 sq m of land under five villas for $17M in Caesarea and bulldozed the buildings to erect a huge mansion. Construction on Israel’s biggest and most expensive villa has finally started with total costs estimated at $100,000,000. Once completed, Mr Kogan will be neighbours with Israeli Prime Minister Benjamin Netanyahu.
Shalva Chigirinsky and his budget-friendly penthouse, Tel Aviv:
Shalva Chigirinsky, billionaire who made his money in real estate and oil, escaped to Tel Aviv whilst under investigation for expropriation of funds by Russia’s prosecutor’s office. There he bought a modest 113 sq m penthouse in the city centre and waited out the legal turmoil until he had paid back his debts.
When Mr Chigirinsky put this property up for sale, local realtors were shocked by the asking price: just $1,070,000. Experts say the asking price was 50% lower than market rates at the time.
Leonid Nevzlin: the most expensive apartment in Jerusalem: $13.7M
Leonid Nevzlin, one
Mr Nevzlin, not unlike Mr. Chigirinsky, came to the Holy Land seeking protection as the YUKOS dismantling scandal raged. He has been on Russia’s wanted list since 2005 and two extradition requests from Russia were refused by Israel.
Invasion of Gaydamaks
Israeli mass media has dubbed the increasing interest of Russian tycoons in local real estate as “the invasion of Gaydamaks” after businessman Arkadi Gaydamak. The latter became actively involved in politics and public affairs after moving to Israel, creating much debate over the country’s need for Russian tycoons and their money.
Israel increased the tax on second home purchases in 2015 in a bid to make housing more affordable and scale back the appetite of foreign investors. Second homes worth over ILS 4,800,000 ($1,300,000) are now taxed at 8% or even 10% for more expensive properties.
Michael Pakshin, director at real estate agency Damida Estate, is not convinced this new tax will be particularly successful as Russia’s international policies continue to generate controversy in the West. Mr. Pakshin explained: "after a number of headline transactions there are fewer buyers in the prime real estate market. However, now Israel expects yet another wave of repatriation from Russia and the Ukraine: many consider emigration with further naturalisation due to the deteriorated political and economic environment in these countries. This will drive up the demand for affordable and
Ivan Chepizhko, Tranio