Despite low foot traffic, D-City design mall continues to defy expectations

If you are looking to design your home in Israel, the D-City shopping mall outside of Jerusalem sounds like a dream: With many of Israel’s best-known brands, easy parking, and possibly the best-looking mall interior in the country, it’s just missing one thing.

“It’s a complete ghost town,” said Scott Lawrence, a Jerusalemite visiting the mall to buy furniture on a midweek February afternoon. “It’s amazing, but there’s absolutely nobody here.”

Located in an industrial park next to Maale Adumim, a West Bank town a half-hour from the center of Jerusalem, D-City defies expectations. It’s a luxury mall designed in the style of great European piazzas, sitting in the desert just several kilometers from the ramshackle Khan al-Ahmar Bedouin encampment.

It bills itself as a home design center, but entertainment is one of its main markets. And it is helping to drive economic growth for the local municipality, even if its stores are mostly empty.

When The Times of Israel visited D-City on a warm day in February, there was an eerie quiet reminiscent of COVID-era lockdowns. In a mall with 120 stores and 60,000 square meters (646,000 square feet) of commercial space, there weren’t more than several dozen shoppers circulating the complex at a time, according to this reporter’s estimate, and many of the large designer showrooms were empty or closed. Construction being done near the front entrance added to the impression that the shopping center was barely open.

“It’s very nice here, but I think they need to figure out how to use the potential here better,” said Shmuel, another shopper from Jerusalem.

Israel’s war against Hamas in Gaza isn’t helping matters, with many Israelis now more reluctant to travel beyond the Green Line due to security factors. Traffic at the mall from Jewish and Arab shoppers, already low before Hamas launched its attack on Israel on October 7, 2023, has since declined about 20%, store owners estimate.

For those who invested over NIS 1 billion in a mall that opened less than four years ago with the hopes of becoming one of the country’s most active shopping centers, the quiet is disappointing. But store owners and the building’s management say there is more happening beneath the surface than meets the eye.

“People who are focused on buying furniture know to come here,” said Aviad, who runs two stores in the mall selling mattresses and custom closets. “We opened a year ago, and we get designers and contractors building large apartment complexes all over the country who know that they get a better shopping experience here. I get a lot of sales by phone or online, and people hear about us through word of mouth. Our business only needs to make a few sales a day, and this place attracts the right people.”

Despite the lack of crowds, many store managers seemed busy during our visit, handling sales calls and managing orders by phone and online. Most we spoke with said they remain committed to the mall, even if foot traffic remains low.

“We firmly believe in this complex and its future,” said Evgeni Haitovich, vice president of sales at Israeli bedding store Aeroflex, which has 24 showrooms around the country. “People come here because they know they can find everything they need for their homes in one place. Every Israeli company in the home design business should be here.”

A different kind of shopping center

D-City operates by a different set of rules than most shopping centers, said Hanoch Kass, the baby-faced Orthodox Jewish owner whose investment company owns the center.

“This is a center focused on interior design, and that’s totally different than most malls, where the goal is to have lots of people coming in and buying clothes,” said Kass, whose Kass Group also operates real estate projects in Georgia. “Here, you have architects coming in occasionally to get to know the distributors, and then placing orders by phone of tens of thousands of shekels at a time.”

Total revenue for D-City stores in 2024 was a combined NIS 180 million, a respectable figure, but less than in the previous year due to the war, Kass said. A significant upgrade is underway that will add new stores to the mall, including many from outside the home sector, he noted.

And the shopping mall is just one part of the equation for a massive 200,000-square-meter (2.2 million-square-foot) complex, Kass said. That includes a 150-room hotel (with 100 more rooms under construction), a massive event hall, an amusement park and several entertainment centers, a workspace, a gym, and a spa.

“Our event hall is full almost every night. We have a wedding for almost 7,000 people tonight,” Kass said in an interview. The massive hall, designed to replicate the famous Venice Hotel in Las Vegas, was originally intended as a food court, “but that doesn’t make sense when the mall doesn’t attract large crowds,” he noted.

Nonetheless, Kass said, the D-Jump entertainment center located inside the mall is full almost every day, and the nearby Magic Kass amusement park had a million visitors last year. The hotel hosts mainly tour groups, conferences, and army and police functions, but will include the country’s largest spa when construction is completed later this year, he added.

“Each part of this is working well, and there will be a lot more people coming when we complete our upgrade in September,” Kass said.

Unmet expectations

Not everyone in the mall is willing to wait that long. Many stores in the mall have shuttered, with the pace of closures increasing in recent months, shop owners said.

“When this place first opened, there were people, and sales were coming in,” said Etti, whose Tzemer carpet store was having a liquidation sale in February before the branch was closed. “But after the coronavirus pandemic and the war, there is almost no one here, despite the fact that so much money was invested in it. One store after another has closed, and now we have no choice but to close as well.”

The mall’s desolation belies the excitement stirring in its halls when it opened in August 2021 to great fanfare. Tens of thousands visited the mall each day during the grand opening, which featured concerts by well-known Israeli singers, street performers, laser light shows, and even a line of cabaret girls dancing in front of the giant fountain at the mall’s entrance.

While many questioned the logic of opening a mall in the desert during the middle of the coronavirus pandemic, others were optimistic that it would replace Jerusalem’s industrial neighborhood of Talpiot as the capital’s center for home products. It seemed logical that D-City’s large modern showrooms and bountiful parking would entice shoppers away from Talpiot and its old, decrepit buildings and limited parking options.

Kass predicted at the time that D-City would soon become one of the busiest malls in the country.

However, concerns about safety, a reputation for high prices, and the mall’s physical location outside of the capital have hindered that vision from becoming a reality. The mall now has 40% fewer stores than when it launched, and traffic remains low even as activity in Talpiot remains consistent.

“We have an Aeroflex branch in Talpiot and a branch here, along with others around the country,” said Haitovich. “Sales are stronger in Talpiot, but one isn’t replacing the other.”

One thing that is clear is that D-City is helping to breathe new life into surrounding businesses.

When it opened in 2021, the surrounding Mishor Adumim industrial zone was rebranded as Park Israel and has since become one of the most active industrial parks in the country, according to a spokesperson for the adjoining Ma’ale Adumim municipality.

“Commerce in the industrial zone began to develop in 2014 when Rami Levy opened a grocery store branch here, and it has continued to grow steadily since then,” the spokesperson said. “The opening of D-City was a significant and powerful milestone that led to the need for us to change the name.”

Park Israel is now home to hundreds of stores on an area of about 1,800 dunams (445 acres) of built-up commercial space, the spokesperson said. The industrial park employs about 7,500 people, including about 5,000 Palestinians.

Locals believe that D-City will prove too big to fail and that things will continue to improve at the mall, despite the low traffic.

“They invested a lot in this place,” said Chen, manager of an electronics store located in the mall since 2022. “Good things take time to develop, and sometimes you need to have patience. There’s no reason it can’t work.”