Clal Insurance (TASE:CLIS) is in advanced negotiations for two deals to lease 1,800 sq.m. at $15 per sq.m. per month in the City Tower, in Ramat Gan’s diamond exchange compound. A Tel Aviv law firm will rent 1,000 sq.m. on the 52nd floor, and an international trading company will rent 800 sq.m. on the 51st floor.
Both leases are for five years, index-linked, with a five-year option at a 7.5% increase in rent, if exercised. Both companies will also rent 25 parking spaces at $135 per space per month, under the same terms.
The demand for Clal Insurance’s space in the build is high, since they offer a panoramic view of the city. The floors are finished and can be occupied within a short time.
Clal Insurance bought four 1,440-sq.m. floors in City Tower for $2,600 per sq.m. These leases give it a yield of only 7% on the investment. The lower than expected yield is due to the weak office market and falling prices. Clal Insurance is in negotiations to lease the 50th floor to attorneys and accountants under similar terms.
In a separate development, the new Mivtachim Pension Fund has given up its option to rent the 1,440-sq.m. 30th floor in City Tower from Dolinger Construction and Investment Co. at $15 per sq.m. per month. As reported by “Globes”, Mivtachim rented the 31st and 32nd floors from Dolinger at $15 per sq.m. per month in a seven-year lease, with a 12-year option.
Published by Globes [online] - www.globes.co.il - on February 9, 2003