Africa-Israel, Melisron buy Tel Aviv lot for NIS 578m

Tel Aviv

The lot in the Sarona area is zoned for a 40-floor office high-rise.

Africa-Israel Properties Ltd. (TASE: AFPR) and Melisron Ltd. (TASE: MLSR) have won a tender for a 13-dunam (4.25-acre) lot in the southwestern corner of the southern Tel Aviv government district. Africa-Israel and Melisron will pay the Israel Land Authority (ILA) NIS 536 million for the land, plus NIS 42.18 million in development fees - a total of NIS 578 million.

Six bids were submitted in the tender. Bidders included Gindi Holdings, Azrieli Group Ltd. (TASE: AZRG), Hagag Group Real Estate Development Ltd. (TASE: HGG), and Israel Canada ITR) Ltd. (TASE:ISCN).

The tender, which was closed only yesterday, concerns lot no. 7 in the Sarona area in the southern Tel Aviv government district. The lot is zoned for the construction of 77,000 sq.m. of office space and 4,250 sq.m. of commercial space in a 40-floor high-rise with seven floors of underground parking and one commercial floor. The lot is current used as a parking lot.

The minimum price for the lot was set at NIS 207 million, and the tender documents stated that this prices was half of the value assessed by the government appraiser. The winning bid of NIS 536 million was therefore NIS 122 million more than the assessed value of the property.

The tender was one of the few published recently on this scale for this type of location. There are, however, several restrictions on the winner. The tender terms state that the developer can obtain the lot only when a foundation and digging permit or a building permit is obtained. This is an unusual condition, which will in practice enable ILA to continue receiving income from the large parking lot currently on the site. The tender documents also note that the construction plan has not received final approval, and the winner must therefore wait until the planning process is concluded before beginning construction. The tender also imposed public duties on the developer: the winning companies will have to complete the circular tunnel connecting the parking lots of the adjacent buildings and allocate 30% of all the parking spaces in the project to the public.

Published by Globes [online], Israel business news - www.globes-online.com - on September 8, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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