The Academic Campus - Kiryat Ono has rented 2,500 sq.m. in Or Yehuda from Maslavi Construction at $10 per sq.m. per month, index-linked in a two-year lease with a three-year option. The rent for the option period will be settled in negotiations.
The Academic Campus - Kiryat Ono has an option until the end of 2004 to rent the rest of the 5,000-sq.m. building in the Or Yehuda business district. The Academic Campus is expected to exercise the option, due to the rapid increase in its activities.
In a separate project, Maslavi Construction is launching its large 513-apartment vacate-and-build project in Kiryat Ono.
Despite the endless talk, running around, and deal-making, only one large-scale vacate-and-build neighborhood project currently exists, although individual buildings can be found here and there. At a real estate industry conference in Tel Aviv last week, Ashdar general manager Shraga Waseman said bitterly, "They talk about 100 projects, but the Ministry of Finance income and property tax division has approved only six to date. At this rate, construction will begin only in three to five years."
Maslavi succeeded, apparently by stubbornly pursuing the bureaucrats, and signed up 170 apartment-owners for its vacate-and-build project on a 26-dunam (6.5-acre) lot in central Kiryat Ono. Although the residents were willing, Maslavi had to persuade the Kiryat Ono municipality, the local planning and building committee, the Israel Land Administration (ILA), Bank Hapoalim (LSE:BKHD; TASE:POLI) (which is financing the project), lawyers, and the Income Tax Commission. It is no wonder that two months ago, ILA director-general Yaacov Efrati expressed astonishment at the victory over Israeli bureaucracy.
Maslavi will build 513 apartments in eleven high-rises of nine to fourteen floor each. After giving 170 apartments to the existing apartment-owners, and selling 50 apartments to an association at a 7% discount, it remains to be seen if Maslavi will earn a profit on the project.
Ashdar, Mishab Housing Construction and Development, and other companies are now waiting to see whether vacate-and-build projects are worthwhile for them too, and not just for the apartment-owners.
Published by Globes [online] - www.globes.co.il - on April 25, 2004