Amot Investments and Nitsba Holdings (TASE:NTBA) plan to convert Beit Egged, above the Haifa central bus station from offices to immigrant housing. The companies cite the slump in the office space market and the pending move of the building’s main tenants. The companies plan to convert the offices to 120 apartments that will be leased to the Ministry of Immigrant Absorption for $1 million a year.
The 12-storey Beit Egged has 8,100 sq.m. Israel Electric Corporation (IEC) owns for floors and leases three more, and Egged Bus Cooperative rents five floors. IEC will shortly vacate its space when it moves to its new headquarters in southern Haifa.
IEC will return its rented office, for which it paid $10 per sq.m. per month, to Amot and Nitsba, and is offering the floors it owns for $2.2 million, or $800 per sq.m. Amot and Nitsba have first refusal rights to the property.
Egged has a 10-year lease, reportedly paying $8-10 per sq.m. per month. Amot and Nitsba have offered Egged alternative space, possibly in the new central bus station under construction in southern Haifa. This would leave the entire building vacant, and available for conversion. The Ministry of Absorption periodically publishes tenders to lease complete buildings for immigrant housing for 10 years or more. Amot and Nitsba found that there is a shortage of rental housing for immigrants in Haifa.
Amot and Nitsba estimate they can lease the apartments for $700 a month. After deducting maintenance and management fees, they would earn $500 a month per apartment. Due to the slump in the office space market, in part due to the City Windows project in downtown Haifa, and the low rents for office space, converting Beit Egged to immigrant housing seems to be the best solution for the building.
Published by Globes [online] - www.globes.co.il - on June 8, 2003