The Hagag buyer's group organized to purchase lots in Africa-Israel Investments Ltd.'s (TASE:AFIL; Pink Sheets:AFIVY) housing project in the Tel Aviv suburb of Savyon has bought fewer than half the 75 lots that it committed to buy. The company reports that 30 lots have been sold, but local real estate agents say that the actual figure is 15.
Two months ago, Africa-Israel, controlled by chairman Lev Leviev, subsidiary Africa-Israel Residences Ltd. (TASE:AFHS) signed an agreement with a buyer's group organized by developer Ido Hagag and his brother, Adv. Yitzhak Hagag, to buy 75 lots for the company's luxury project in Savyon. The Hajaj group was given an option to buy the lots for NIS 190 million, 30-40% less than the price at which Africa-Israel has been marketing the lots on the open market since December 2007.
If the buyer's group does not sell all 75 lots within the period stipulated in the contract, the deal is off. The low demand has apparently led the buyer's group to divide sales to two blocs: the first is due to sell 30 lots within 45 days, and the second will sell the remaining 45 lots within the 45 subsequent days. Given the shaky economy, this rate of sales seems highly unlikely.
Africa-Israel's share rose 5.3% by midday today to NIS 35.34. Africa-Israel Residences share rose 3% to NIS 20.
Published by Globes [online], Israel business news - www.globes-online.com - on January 4, 2009
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