By Joseph Millis
In Israel, entrepreneur Avi Katz is considered to be the local Sir Stelios Haji-Ioannou, the founder of the ubiquitous easy brand – EasyJet, easyHotel and now easyProperty.
It is not difficult to see why. Katz, 52 and the product of the yeshivah high school system in Israel, is best known in his homeland as the founder of Cofix, a chain of coffee shops the revolutionised the market by cutting costs in the most radical of manners.
While most of the big chains in Israel such as Aroma or Arcaffe were charging 18 shekels (£2.95) for a cup of latte – steep even by British standards – Katz came along and charged five shekels. That’s 82p to you and me.
In London to set up Cogress, Katz’s new real estate model – which aims to give consumers access to investment opportunities usually reserved for the largest investors – he told Jewish News the secret of his success.
“It makes me unhappy when I see people are unhappy to pay high prices,” he said.
“I just want to make people happy. There was absolutely no justification for the high prices people were paying for coffee, a croissant or a meal.”
So how did he get to cut the price of coffee – and everything else in Cofix from soft drinks to meals – from the equivalent of £2.95 to 82p? “A £2.95 coffee costs about 30p to make. Even if you add in the rent and the salaries of the employees, it comes out nowhere near £2.95 per item,” the touchy-feely entrepreneur explained. “If you are selling large quantities, it all works out cheaper, much cheaper. It’s the economy of scale.” Cofix, he said, “has brought the products back down to their true worth.” And it works.
For cash-strapped, middle class Israelis whose salaries are not even close to the UK’s despite the horrendous cost of living in their country, it was a God-send. Susie Vaknin, a mother of four who lives in Kochav Yair-Tsur Yigal, just outside Kfar Saba, told Jewish News: “It’s brilliant. Amazing. It’s great for people with families who just want somewhere to stop and have a coffee and a soft drink. It’s a huge saving.”
So now Katz wants to bring his real estate model – which works in Israel under the name of Hagshama – to London.
“Basically, it’s an investment grouping,” he said.
Cogress’ platform carefully matches investors and vetted entrepreneurs seeking funding for residential and commercial property developments. “Cogress offers the chance to invest in real estate assets with a low barrier to entry. If you think property investment is too expensive and too difficult, think again.
We offer quality investments from £20,000. Our circle is open to investors like you,” Katz said. Basically, each investor has a stake in a property, be it 0.5 percent, five percent or even 50 percent. And when the property’s price rises, then so does the investor’s take. “It’s all based on joining forces. We work together to build success. We understand that there is a global pool of investors, who would like to earn the returns available from investment in property, but who do not have access to the best opportunities,” he added.
All deals are done through lawyers and there is due diligence and City regulation through the Financial Conduct Authority. “We act like a public company and we send out quarterly reports. And we know that when you invest, it’s not for the long term unless that’s what you want. Exits in 18 to 36 months keep you in control,” said Katz.
As an entrepreneur, he is the former chief executive officer and owner of the Blue Square Group – a leader in the fields of houseware and toys.
“That’s how I started. Selling pencils in toy shops at a knock-down price. Stationery was far too expensive. Pencils were being sold for 12 shekels a go. I sold them for a shekel. “And I set up the ‘Everything for a Shekel’ shops” – the equivalent of Poundland or Poundworld.
Only one shekel is about 16p. With Katz all the way is chairman and former navy commando Hanan Shemesh, a qualified lawyer experienced in marketing and real estate. In London, where Cogress has teamed up with north London property consultant Debbie Ingram, the company has already had notable successes, in Golders Green, Stoke Newington and Finchley.
Tal Orly, chief executive officer, at Cogress UK, said: “Since launching our model in Israel we have successfully adopted the concept in the US and in countries across Europe. By finally bringing our unique investment structure to the UK, we can support would-be investors who might have been too nervous to get involved in a property development on their own.”
“The majority of our UK developments are in north London, which is why we are delighted to be working with Debbie Ingram, whose knowledge of the market is second to none.” And will there be a Cofix in London? “Sure, why not,” says Katz.
“I want to make people happy.” Watch out Starbucks and Costa. Katz is out to get you.