Sources inform ''Globes'' that the Azrieli Group is set to begin a comprehensive restructuring program, one of whose goals is the flotation of its shopping mall business. Among the moves in the upcoming restructuring will probably be the consolidation of the sister companies Canit Hashalom Investments Inc. and Canit Management, Investments and Financing Inc., which currently hold the group's seven shopping malls, and the separation of the group's high-tech activity and its holdings in Granite Hacarmel Investments Ltd. (TASE: GRNT) from its real estate business. The restructuring itself, which will also entail complex tax and legal issues, will take place during the course of 2007. On its completion, the group plans to float its shopping mall activity on the Tel Aviv Stock Exchange (TASE) at a value of $1.5 billion.
Aside the restructuring of its business, the Azrieli Group is also likely to complete a number of key projects this year, which will enable it to maximize its value in the flotation.The most prominent is the construction of the Square Tower in the Azrieli center in Tel Aviv and the completion of the shopping mall in Modiin.
The Azrieli Group is presently wholly owned by businessman David Azrieli and it is managed by group president Menachem Einan. The group consists of two main companies, Canit Hashalom and Canit Management. At present, Canit Hashalom holds the Azrieli center in Tel Aviv (office blocks, shopping mall and parking lot), the MAR project in Modiin, which comprises commercial space, a shopping mall, office blocks, and residential properties; and the Herzilya Outlet Mall in Herzilya Piutah. It also holds a 64% controlling stake in Granite Hacarmel, which it recently acquired at a value of $275 million.
The sister company, Canit Management, holds the Ayalon Mall in Ramat Gan, the Jerusalem Mall in Jerusalem, the Negev Mall in Beer Sheva, the Holon Mall in Holon, and the Margalit Mall in Hod Hasharon. It also controls the group's venture capital fund Azritech Fund which invests in young high-tech companies. Figures recently published by the Azrieli Mall Group, which is managed by Pe'er Nadir, reveal that it ended 2006 with turnover totaling NIS 4 billion from its seven shopping malls. It is expected to complete the construction of the Modiin Mall by the end of 2007 at an investment of $100 million. The mall will generate annual rental income of $13 million.
The group figures also show 45 million visitors at its seven shopping malls in 2006 Its share of the turnover in the shopping mall market in 2006 reached 23%. The group's seven existing malls extend over a total of 150,000 sq.m. space and contain 1,000 stores, with the Modiin Mall adding a further 20,000 sq.m. space and 130 stores.
David Azrieli (84), one of Canada's wealthiest businessmen with an estimated fortune of $2.4 billion, is considered the inventor of the shopping mall concept in Israel, after he opened the Ayalon Shopping Mall in 1985. Since then he has gradually built his business into the shopping mall empire it is today and has now began to eye the local capital market, after keeping his business under private ownership throughout his career.
Published by Globes [online], Israel business news - www.globes.co.il - on March 8, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007