Arcadi Gaydamak is entering Israel’s real estate market. On Friday, he bought the Zim lot at Rothschild St. 22, on the corner of Nahalat Binyamin St., Tel Aviv, for $26 million from Mizrahi Tefahot Bank (TASE:MZTF). He outbid seven parties, with a price $6 million above the assessor’s estimate. As part of the deal he also bought three 1,200-sq.m. buildings slated for preservation.
The 1,861-sq.m. Zim lot is occupied by several buildings, which served as Mizrahi Bank’s headquarters until seven years ago. The bank moved its headquarters to the Sha’ar Ha’Ir building at the Elite Junction in Ramat Gan, paying Ocif Investments and Development Ltd. (TASE: OCIF) and Mordechai Aviv Building Industries Ltd. (TASE: AVIV) $29 million for six floors.
The Zim compound is zoned for a 10,000-sq.m. luxury office building, including 500 sq.m. of commercial space facing Nahalat Binyamin St. The Urban Building Plan (UBP) permits an additional 1,125 sq.m. of space on the top floor. Gaydamak will reportedly try to rezone the building for luxury residences.
Mizrahi Bank wants to rent space in the new building’s commercial space and three floors, making part of the project a sell and lease-back deal. Since the assessor valued the lot at no more than $20 million, the bank has made one of the best real estate deals in recent years. Moshe Zur designed the new office building.
Published by Globes [online], Israel business news - www.globes.co.il - on October 8, 2006
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