Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) and real estate companies Tidhar Group and Acro Real Estate (in which The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) recently became a partner) are negotiating to buy a large parcel of land in central Tel Aviv on Harakevet Street adjacent to Hatzfira Street in order to construct an office and residential project. An informed source told "Globes" that, as far as is known, the contacts have been going on for several months, during which Azrieli Group Ltd. (TASE: AZRG) also expressed interest in the land. The land is worth an estimated NIS 215 million.
It is believed that the purchasing group is seeking to build a tower with 30,000 square meters of offices and 10,000 square meters of residences. Construction is slated to cost hundreds of millions of shekels on top of the price for the land. The informed source told "Globes," "The details have not yet been settled; there is no written agreement and no final form for the deal." It is therefore still unclear how much of the land the buyers will hold when the deal is completed.
As far as is known, the sellers are foreign investors who have been holding the land for a long time. The Azrieli Group, which formerly expressed interest in buying land on Harakevet Street, apparently abandoned the idea after the Migdal-Tidhar-Acro group made a higher bid.
Real estate development deals are not a common venture for investment institutions, which usually prefer buying income-producing real estate that is already past the development risk stage. At the same time, this is not the first development deal involving large real investment institutions, including Migdal, whose investments are managed by investment division head Assaf Shoham. Migdal, controlled by Shlomo Eliahu, previously developed the Museum Tower, the Champion Tower, and the Allon Tower in Tel Aviv, in which it was joined by Harel Insurance Investments and Financial Services Ltd. (TASE: HARL).
For Migdal the investment is a non-financial one considered part of its alternative investment instruments to which it is allocating increasing resources. Migdal manages NIS 249 billion on its own account and for its policyholders.
Published by Globes [online], Israel business news - www.globes-online.com - on July 12, 2018
© Copyright of Globes Publisher Itonut (1983) Ltd. 2018