New Israeli Infrastructure – Success and Failure

Real estate development is closely related to the development roads, trains and other means of transport. This is true in Israel as well.

Over the last two decades we have seen some development in this area.  In some cases the new development was successful but in some instances we thought we were moving forward when we basically regressed.

I remember the first time I ever saw the central bus station of Tel Aviv. It was in the late 1970s and I remember thinking to myself:  “this cannot be the central bus station of a major city in a civilized country”.

I was right and many people felt as I did. The station was a mess. At the time there was a plan to construct a mammoth bus station in its place.

It took many years for this plan to get under way for reasons which I will not go into now. The construction was begun and then halted for many years and the skeleton of the new bus station edifice was often called the “white elephant of Tel

Finally, in the summer of 1993, the new bus station was opened. This new station was one of the largest bus stations in the world. It included many thousands of square meters of commercial space. Unfortunately, much of this space was never sold or leased.

Indeed, whole areas of the commercial spaces of the building are empty and have been taken over by such undesirable elements that it is dangerous to walk in these parts of the building.

Although, the central bus station and some areas are populated with functioning stores, a solution must be found to save the other parts of the building. The neighborhood around the building is a poor one which today houses many of the foreign workers who have inundated Israel from other parts of Asia and Northern Africa. This neighborhood was not enhanced or gentrified by the presence of the central bus station of Tel Aviv.

On a more positive note, there is a plan to clean up the site of the old Tel Aviv bus station (which is only several blocks away from the new station).

One of the plans is to build a college there. There are already new, modern office buildings surrounding the site. The construction of a college there would bring a young community of students to the area. It is believed by many that this would raise the value of the apartments in the surrounding neighborhoods to three times the amount of their worth today.

Indeed, despite the fact that the surrounding neighborhoods are not Tel Aviv’s finest, the prices of the apartments there
have already begun to rise due to the promise of this better future. This might be a good place to invest for someone who can wait a few years for a return on their investment.

An example of progress (at least in my opinion) is the development of the train system in Israel. Since 2000, we have seen a huge leap in this area  and, with the exception of the Tel Aviv – Jerusalem fast train line which is currently under construction, most of the country (including the Ben Gurion Airport and the ports of Haifa and Ashdod) has been hooked up to the railway system.

In addition to this, we have seen the construction of major highways such as the Ayalon Highway which leads to Tel Aviv, the 431 highway from Modiin to Rishon Lezion and the number 6 highway which takes you from north to south (or from south to north whichever way you look at it) in record time.

Needless to say there has been a real estate boom in the areas along these roads and train routes. However, although these trains and highways do much to link the cities of the country there is still room for improvement.

Israel has yet to see a real subway system in the major cities. The lack of such a system, coupled with the inadequate bus systems in most cities, are a major factor in the slow growth of suburbs and the satellite cities surrounding the major ones.

Last but not least are the ports. Israel’s coast is dotted by ancient ports such as, Acre, Jaffa, Caesarea, Dor, Achziv and Ashkelon. The Tel Aviv port was built in 1936 but is not really functional today. The two major Israeli ports today are Haifa and Ashdod.

As a result of this,  these two cities have grown and developed and will continue to do so. Both these ports can be reached by bus and railway.

In the past two decades, vacationing on the sea via cruise ships has become a growing trend. The Israeli maritime company Mano runs a series of cruises to various locations in the Greek islands, Italy, Spain and Southern France and several
other cruise companies have begun to come to Israel as part of their Mediteranian cruises.

This brings many tourists to the country. However, both Haifa and Ashdod are industrial ports and are not the picturesque port one wishes to see on vacation. More thought should be given to the renovation of some of the ancient and exotic ports such as Acre and Jaffa.

The renovation of these ports, while preserving their character and history would make a very profitable real estate investment.