Co-Op Blue Square signed a lease last Wednesday to rent a 7,000 sq.m. building in the Hutzot Hamifratz mall in Haifa. The lessors are Ofer Brothers, Koor Properties and Ashtrom. The lease is for ten years with a ten year option. The parties did not disclose the rent, but it is estimated at $10 per sq.m, index-linked.
The lease also stipulates that Hutzot Hamifratz will buy Co-Op Blue Square's current 3,810 sq.m. store in the mall, probably for $5 million. Co-Op bought the store in 1996 for $1,400 per sq.m., and is now selling it at a slightly lower price. Co-Op was the only mall tenant to buy space; all other tenants are renters.
The lease also stipulates that Hutzot Hamifratz's developers will build a 7,000 sq.m. building for Co-Op at a $4 million investment, based on Co-Op's blueprints. The new store, which will be the largest supermarket in northern Israel, is scheduled to open by Passover 2003.
Hutzot Hamifratz covers 42,300 sq.m., and will reach 49,000 sq.m. when Co-Op's new store is completed. The old building will be subdivided into shops, designated for renting.
Published by Israel's Business Arena on 10 February 2002