Moshe and Yigal Gindi concluded a deal last week to buy a compound for the construction of 180 apartments in Kiryat Arie in Petach Tivka from Teth Beth. Teth Beth is owned by the Berger and Trubovitz families. Gindi will pay $6.85 million for the compound, equaling $38,000 per apartment. Bank Hapoalim will provide financial coverage. The deal is scheduled to be signed shortly.
The whole compound is designated for the construction of 360 apartments. Teth Beth sold half the compound to Africa-Israel at the end of 1999, for $42,500 per land per apartment. In its negotiations with Teth Beth, Gindi demanded to pay 10% less than Africa-Israel, due to the fall in apartment demand and prices.
At the same time, negotiations between Gindi and Etz Lavud (AMEX: ETZ) for an adjacent compound for 475 apartments have broken down. As reported in “Globes” on February 25, the parties were unable to agree on a price. Etz Lavud sold an adjacent compound to Africa-Israel in late 1999 for 390 apartments at $42,500 per land per apartment, and demanded a similar price from Gindi, later dropping to $40-41,000 for a total of $19-19.5 million. Gindi replied that in light of the depression in the real estate industry, they were willing to pay the same price as in the Teth Beth deal, i.e. $38,000 per land per apartment for a total of $18 million.
The dispute remained unresolved, and Etz Lavud has opened negotiations to sell the compound to Dankner Investments. Sources close to the negotiations said the compound may ultimately be sold to the Gindi brothers. Etz Lavud is demanding $43,000 per land per apartment from Dankner Investments. If Dankner buys the compound at that price, they will be in a poor competitive position vis-a-vis Gindi, which is buying the adjacent compound at a much lower price.
Africa-Israel announced it will not exercise its first refusal rights for the two compounds.
Published by Israel's Business Arena on 25 March 2001