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How did an old appraisal method contribute to the increase in the cost of living in Israel, and how is this related to the world of marlogim?
Yair Levy, owner of Yair Levy Strategy in Real Estate – published in Marlogim de Marker magazine
The characteristics of the logistics warehouse have changed over the past decades as a result of technological development, changes in the country’s road map, business activity in Israel and in the world, and demographic and geographic changes. The opening of Highway 6 in the early 2000s, the increase in land prices in the center of the country, and the transition of Skilled and high-quality personnel to the periphery, enabled a gradual shift of logistics activity from the expensive center to the north and south, areas where the supply of land was large and the level of costs allowed economic profitability. However, after a decade of planning stagnation, a severe shortage of land suitable for logistics has arisen all over the country. On the other hand, we see A significant increase in the demand for medical professionals. A significant increase in imports to Israel, the entry of international entities into the country, mergers and acquisitions that created huge companies, and the flourishing of electronic commerce are just some of the reasons that led to a peak in demand for large logistics areas. 
reduction to be to size‘. According to this concept, the price per square meter of land in a large land division should be about 20% lower than the price of the same square meter in a smaller division. That is, if I have 40 dunams of land and I sell it as four separate units of 10 dunams, I will receive 20% more than a scenario where I sell the entire area as one unit. The size reduction method meant that the Israel Land Authority (RMI), which owns the largest land in the State of Israel, has no motivation to market large plots of land or to initiate the planning of large land divisions within industrial zones. Like her, the planning and construction authorities do not plan large plots of land in the IBA and the local authorities do not plan large plots on private land. Thus, instead of creating a solution to the problem of the lack of land for logistics, it is also entrenched in the long term of the next 5-10 years. In addition, the demand for high ceilings is not met in the planning aspect and this creates a severe excess demand for large areas, where construction to height is allowed. The reduction method not only hurts the supply, but creates difficulty for entrepreneurs in raising bank financing, since the banks determine the amount of financing and the terms according to an appraiser’s assessment of the value of the land. How does all this affect the cost of living? The logistics world is built on efficiency and it is this that creates profitability. If I pay a premium for the land, or alternatively have to spread the logistics activity over two or more centers, due to the lack of suitable space, my costs increase. In order to remain profitable, there is no escape from raising the price of the goods I sell, whether it is final products or raw materials. And who pays the price? The consumer of course. To understand the severity of the problem, one must remember that Israel, being a small country, must rely on imports, because there is no way to compare the price of blue and white goods to the prices of goods in China, for example. Since we will always need imports, we will always need logistic warehouses. In addition, if Israeli industrial plants do not have the possibility to establish logistics centers in Israel without seriously harming their profits, we will witness the flight of more and more Israeli industrial companies abroad and fewer international companies will want to manufacture in Israel. The problem must be solved on two levels: First, it must be ensured that the planning bodies are connected to the reality on the ground, understand the market and its changing needs, and are well acquainted with the nature and level of demand. Second, the appraiser’s concept of determining the value or price of the land must be changed. The past cannot currently be used as a measure for the future because reality dictates other rules: looking ahead, predicting trends, adapting the present to the future and flexibility. Only future evidence will prevent a recurrence of the case of the technology park in Modi’in, which stood empty for 7 years, until permission was received to set up MERLOGs there, a permission that resulted in regional prosperity in a very short time.
