Sources inform ''Globes'' that Dan Center receiver Adv. Ron Bar-Nir, appointed on behalf of Israel Discount Bank (TASE: DSCT), will sign a deal for the sale of the Bnei Brak center for $20 million with a group of local developers tonight.
Located on a 10,500-sq.m. lot at the corner of Jabotinsky St. and Ben Gurion St., the Dan Center has been a white elephant for five years. A 15,000-sq.m. three-storey mall and 35,000-sq.m. 35-storey office tower will be built on the lot. The project’s developers - Canadel Development Tel Aviv, Givat Marom, SC Talpiot, and Mey Arad Engineering Development and Building Co.bought the land in 1995 in a combination deal from private parties. A dispute erupted between the developers and landowners a few months later, causing the deal to be cancelled by mutual agreement, and construction was halted. Part of the building framework and a 860-space four-storey underground parking garage had already been built
In 2000, Discount Bank petitioned for a receiver to be appointed for the project, because construction had been halted, and the developers were not repaying NIS 100 million in loans to the bank.
So far as is know, the buyers were the only candidates for the property. Bar-Nir divided the project into two properties: the mall and the office tower. Under the terms of the deal, the buyers will pay $10 million for the mall, which is in shell condition, and 330 parking places. The buyers will pay another $10 million for the second property: the two office floors in shell condition and building rights for 33 more floors, plus 530 parking places. The court has to approve the deal.
Due to the current market climate for office space, Bar-Nir got little money for the project. He had negotiated to sell the project to a consortium comprising Uri Dori Engineering Works Corp. (TASE: DORI), BSR Projects Ltd. (TASE:BSRP) and Housing and Construction Holding Co. Ltd. (Shikun u'Binui) (TASE:HUCN) subsidiary Secom Ltd. for $32-33 million, but the deal fell through when Egged decided to rent 10,000 sq.m. of office space at Airport City instead.
Published by Globes [online], Israel business news - www.globes.co.il - on August 14, 2005