Sources inform “Globes” that Big Commercial Centers will spend $80 million over the next two years on the construction of four new shopping centers, expanding two existing shopping centers, and the construction of an office building.
These will probably be the largest retail commerce investments in the near future, since the major supermarket chains, Super Sol (NYSE: SAE; TASE:SAE), Blue Square Israel (NYSE: BSI; TASE:BSI), and ClubMarket are cutting down on their business.
As part of its expansion plan, Big Commercial Centers will for the first time build two shopping malls. Up until now the company had only build power centers with a single floor and an elevated parking lot. Brothers Yehuda and Roni Naftali own Big Commercial Centers.
Big Commercial Centers today inaugurated its shopping center in northern Eilat, built on a 32-dunam (eight-acre) site purchased from Superior Cables. Construction of the 12,000-sq.m. center cost $15 million, and all of the space has been leased at $15 per sq.m. per month. The main tenants are Jumbo 3,050 sq.m., Golf 890 sq.m., and Super-Pharm 680 sq.m. A few of the stores have not yet opened.
Big Commercial Centers’ largest investment will be the acquisition of the Karmiel power center, which has 15,000 sq.m. of commercial space and 5,000 sq.m. of offices, for $25 million. Ytong owns 75% of the commercial center, and Ganden subsidiary Azorim Properties owns the other 25%.
The deal with Ytong has already been closed, and advanced negotiations are taking place with Azorim Properties.
The second largest investment, $20 million, will be in the construction of Big Ashkelon, at the northern entrance to the town. Dirom Construction Company, controlled by the Khakshouri family, is an equal partner in the 20,000-sq.m. project, which will be built on the site of the former Yuval Gad plant.
The two new shopping malls will be in Beit Shemesh and Eilat, near Big Commercial Centers’ existing power centers. The Beit Shemesh mall, with 14,000 sq.m., and costing $15 million, will be an equal partnership with Kibbutz Tzora. The Eilat mall will have 8,500 sq.m., and cost $12 million.
Big Commercial Centers will also expand its shopping center in the Krayot by 8,000 sq.m., add 2,000 sq.m. to Big Beer Sheva, and construct an office building adjacent to Big Beit Shemesh in stages.
Big Commercial Centers is in advanced negotiations with Bank Leumi (TASE:LUMI) and Bank Hapoalim (LSE:BKHD; TASE:POLI) for financial coverage of 80% of the investment. The other 20% will be financed from equity, mostly from the company’s profits from leasing its existing commercial centers.
Published by Globes [online] - www.globes.co.il - on December 10, 2003