The Government Housing Administration is about to sign a contract in which it will rent from the Ofer Brothers and Shimshon Pritzker, in equal shares, a 20,000 sq.m. office building on Yirmiyahu Street, Romema, Jerusalem. Construction will commence as soon as the contract is signed, and the Administration will receive the building at the beginning of 2001.
The Administration will pay $10 per sq.m. per month, linked to the Consumer Price Index, under a ten-year lease, commencing from date of delivery. After four years, and again after eight years, an inspection will be performed by licensed land valuers, and the rent will be adjusted to market prices. In ten years time, the parties will negotiate an extension of the lease, but no option has been granted. The State will also rent 500 parking spaces at $60 per month, on identical terms.
The Housing Administration will move the Ministry of the Interior to the new building. The Ministry is presently located, for the most part, on Hillel Street, in the centre of Jerusalem. Various departments of the Ministry of Justice are also to be moved to the new building. The Ministry of the Interior is currently paying rent at $15-16 per sq.m. per month, while the Ministry of Justice is paying $13-14 per sq.m. per month. The Ministry of Justice directorate, presently located in East Jerusalem, is evidently not slated for relocation to the new building.
The Pritzker-Ofer deal will evidently be the last in an extensive series of rental transactions concluded by the Government Housing Administration, and the government is currently pulling out of the office leasing market. Inter alia, the Administration has leased buildings in Jerusalem, in Shenhav House, Sha’ar Ha’ir and other buildings, and the Government Compounds Authority is putting up new buildings for some ministries. New housing has been assured for all government ministries in Jerusalem. The Administration has also concluded large deals in Tel Aviv (the Moskowitz buildings and others), in Haifa and in other towns. In future, the Administration will engage mainly in building maintenance.
Published by Israel's Business Arena April 18, 1999