Arie Israel Insurance has halted its negotiations with Ampa Real Estate to rent 4,000-5,000 sq.m. in Ampa’s office building under construction on Hamasger St. in Tel Aviv. The rent was a major factor preventing an agreement. Ampa demanded $13 per sq.m. per month, while Arie was willing to pay only $11 per sq.m. per month, given the slowdown in the office space market and the large supply of space for rent.
Arie, a Clal Insurance (TASE:CLIS) subsidiary, has for many years occupied four floors of offices in the Shalom Tower in Tel Aviv, with a total of 4,800 sq.m. Management is on the 13th floor, while most of the employees are on the third and fourth floors, and the separation hampers the company operations.
Although the offices have been renovated, the old building is distant from the new city business centers. Arie wanted to move to Hamasger St., which is near the offices of its parent company, Clal Insurance, at 48 Petah Tikva Rd.
Ampal is constructing an eight-storey office building on Hamasger St., on the site of its national service center. One possibility that Arie explored was having a separate entrance, to create a “building within a building”. Ampa recently offered the second and third floors to insurance agencies, but had no success.
Arie will now consider other rental office space in the central region. At the same time, management is in no hurry to decide the matter. The company is likely to continue in its current offices, unless it receives a reasonable offer on attractive terms.
Published by Globes [online] - www.globes.co.il - on March 2, 2003