Because of the high demand for commercial centers in Israel on the part of investors, more and more developers have been persuaded to put their assets up for sale. The hottest property to be offered recently is the Gan Ha'ir (City Garden) mall in central Tel Aviv. The mall is owned by Shlomo Eliahu and the Shechter family, and it carries a price tag of nearly NIS 500 million.
Israel's commercial property market has become more and more concentrated in the past few years in the hands of a small group of developers seeking to exploit economies of scale and buy up as many centers as possible. The largest concerns in the sector are REIT Israel (previously Azorim Properties), owned by UK businessman Leo Noe, David Azrieli's Azrieli group, and Gazit-Globe (TASE: GLOB) unit Gazit-Globe Israel.
An industry source said yesterday, "The Shechter family and Shlomo Eliahu woke up this morning and wanted to know how much they were worth, and so they said the business was for sale." Several attempts have been made over the years to persuade the owners to part from Gan Ha'ir, but market sources stressed yesterday that their inclination was not to do so.
Eliahu and Mordechai Shechter built Gan Ha'ir in the 1980s, in a project that included a residential tower considered a pioneer project in luxury residential high rises in Israel. They also built the new Tel Aviv city hall, an adjoining park, and the Gan Ha'ir commercial center on the ground floor of the tower. The mall was opened in May 1988. It was planned as a prestigious shopping center, without fast food chains or cinemas, and it has managed to preserve its status over the years.
The center has an area of some 41,000 square meters. The shopping mall itself is 21,000 square meters in area, of which 13,000 square meters are commercial space (almost 100 stores).
Published by Globes [online], Israel business news - www.globes.co.il - on July 18, 2007
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