Isras Investment Company has suspended construction of 18,000 sq.m. of office and high-tech space in the Jerusalem Technology Park, due to plummeting demand in the past two years. Isras was also scheduled to build a 23,000 sq.m. underground parking lot.
Isras has already invested millions of shekels in the excavation work for the building, which would have been one of Jerusalem's largest high-tech projects.
Isras recently completed construction of a 17,000 sq.m. building and 20,000 sq.m. parking lot, and is now looking for tenants. Sources inform ''Globes'' that very few deals have been concluded lately for the project. Rent was recently set at $16 per sq.m. per month.
Isras chairman Shlomo Eisenberg, who also owns its controlling interest, said, "The high-tech crisis recently caused a sharp drop in demand by high-tech companies. Companies have been closing at an accelerated pace. These processes have affected tenants at the Jerusalem Technology Park and Har Hotzvim (Isras' other main high-tech and office project) as well. The trend is expected to continue and even worsen in 2002."
Isras realized the collateral on guarantees given by tenants who left before their leases expired. As a result, Isras' revenue rose 14% in 2001 to NIS 83.5 million, despite the crisis.
Isras owns 54,300 sq.m. in technology parks, mostly at the Jerusalem Technology Park. Occupancy is 65%, and 19,000 sq.m. is empty. Isras also owns 10,400 sq.m. of office space, of which 2,910 sq.m. is empty, and 20,000 sq.m. of commercial space, of which 3,000 sq.m. has not been rented.
Published by Globes [online] - www.globes.co.il - on May 26, 2002