Following the sale of a Jerusalem lot yesterday, Arledan CEO Tzali Reshef said, “Commercial real estate is still in a slump, and there’s no sign of renewal. However, anyone who expects positive macroeconomic developments should pay attention to opportunities. We believe there are commercial properties with large discounts on the market.”
Arledan Investment Ltd. (TASE:ARDN), controlled by the Reshef family, yesterday announced that it sold the leasing and maintenance rights on a downtown Jerusalem lot to Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY). The lot is partly vacant, with the rest occupied by pubs and parking lots. Arledan will make a NIS 78 million capital gain on the sale. Market sources believe that Africa-Israel paid NIS 107 million in cash for the lot. Under the agreement, Africa-Israel will receive the leasing rights to the pubs on the site. Arledan said it earned NIS 1 million in rent from these pubs in 2005.
Reshef said, “The site has a large number of pubs and places of recreation. The Urban Building Plan (UBP) permits construction of 36,000 sq.m., including 19,000 sq.m. in residential space.” He added that Africa-Israel plans to build on the lot a nine-storey building that will overlook the Old City. Reshef said Arledan would still own the rights to Arledan House and the Ben Dor building on the adjacent lot.
In November 2005, Arledan sold a lot with two buildings at the corner of Azza St. and Ha’ari St. in Jerusalem for $1.85 million, and expects to make a gross capital gain of NIS 8.1 million on the sale. The buyer plans to demolish the buildings, and build luxury apartments that will be marketed to foreign investors. Market sources predict that a four-room apartment can be sold for $400,000.
Reshef said he sold the property because, “We’ve been in the market for many years. We bought income-producing properties at reasonable prices. The market is rising, so we’re now selling. Arledan is cash-rich, and we’re now launching new projects. We plan to spread outside Jerusalem, and we don’t rule out investing overseas, although we have no network there at the moment.”
Published by Globes [online], Israel business news - www.globes.co.il - on January 18, 2006