Ogen Yielding Real Estate Ltd. (TASE:OGEN) last week obtained final approval for its Urban Building Plan, which increases building rights to 84,000 sq.m. and rezones its Assuta project in Ramat Hahayal in Tel Aviv. Prior to the approval, the site was mainly zoned for the new Assuta Medical Centers Ltd. Building rights have now been increased from 200% to 300%, and the space in the project has been rezoned for commercial, high tech, and office space, as well as for the medical center. The plan calls for 84,000-sq.m. of main space, including 40,000 sq.m. for Assuta, in 19-storey high-rises above four basements with 80,000 sq.m. of service space.
Ogen will build the new 40,000-sq.m. Assuta hospital, with an option to expand by an additional 40,000 sq.m. The project will cost $97 million, and Assuta will pay $11.8 million in rent a year, for a return of 12%. Assuta will consolidate all its regional branches in the new complex, which will be built in accordance with the most up-to-date blueprints.
Ogen CEO Doron Aviv said, "We view obtaining the permit as proof of Ogen's considerable experience and performance and betterment capabilities. The Assuta project will become one of the most innovative medical centers in Israel, and we're pleased to participate in such a complex and large-scale project."
The rest of the space in the project is being leased to Comverse Technology (Nasdaq: CMVT) and BMC Software (NYSE:BMC) for $5.6 million a year in long-term leases, beginning in 2005. The buildings are 95% occupied. BMC leased the space in advance in a ten-year lease at $17.50 per sq.m. per month, linked to the US CPI. Comverse is paying $11.50 per sq.m. per month, with rent increasing by $0.25 per sq.m. each year, beginning in 2007.
Ogen, formerly Zikit Properties and Development, is owned in equal shares by Alony Hetz Property and Investments (TASE: ALHE) director and president Nathan Hetz and Ocif Investments and Development (TASE: OCIF).
Published by Globes [online], Israel business news - www.globes.co.il - on March 6, 2005