The 24,000-sq.m. power center is almost completely leased at a 10% return for the investors.
Nitsba Properties will acquire 50% of a 24,000-sq.m. power center from Ganden for $24.9 million. Construction of the center, located at 5 Giborei Israel St. in southern Netanya, in the final stages. The Nitsba board today approved the deal in principle. The transaction includes the right to build two office towers on an area of 25,000 sq.m.
The commercial center will be at least partly opened before the Jewish New Year. 95% of the space has already been rented at an average of $17 per sq.m. per month, index linked, under medium and long-term leases. The rents guarantee the developers a 10% annual return. Most of the leases include a percentage of turnover clause, and the return will be higher if the percentage clause becomes effective. Ganden has invested an estimated $42 million in the commercial center to date. The company bought the 48-dunam (12-acre) site from Osem-Nestle for $18 million, at $380,000 per dunam ($1.52 million per acre). Investment in construction is estimated at $24 million, or $1,000 per sq.m. Nitsba will pay a higher price, since it is also getting the future building rights. Ganden is likely to use the sales proceeds to finance part of its acquisition of the IDB controlling interest. The following leases, the most prominent leases in the power center, are all index-linked. Most are for five years, with four five-year options, the rent increasing 5% with the exercise of each option. Club Market rented 7,000 sq.m. for a Jumbo store, and will pay $11 per sq.m. per month, or 2% of turnover.
Beitili rented 2,000 sq.m.
Office Depot rented 1,200 sq.m. at $15 per sq.m. per month, or 3% of turnover.
Kne ubne Do It Yourself rented 1,200 sq.m. at $15 per sq.m. per month, or 3% of turnover.
Super-Pharm rented 800 sq.m. for what will be the chain's largest store to date in Israel. Super-Pharm will pay $18 per sq.m. per month, or 4.5% of turnover.
Shekem Electric rented 800 sq.m. for what will be one of the chain's largest stores in Israel. Shekem Electric will pay $19 per sq.m. per month, or 2.5% of turnover.
Fox, Aminach, Castro, Matim Li, Concept Fashion Products Marketing, Jump, and others rented stores, and will pay a fixed rent in dollars, or 7% of turnover.
Nadlan Tec, owned by Sari Levi and Atia Assets and Investments, is marketing the project.
Published by Globes [online] - www.globes.co.il - on June 30, 2002