The huge LYFE project being developed by Ashtrom Properties Ltd. (TASE:ASPR) and transport company Dan in Bnei Brak continues to make progress. Ashtrom Group, the parent company of Ashtrom Properties, reported to the Tel Aviv Stock Exchange this morning that it would be the contractor for the project, and would construct the two office towers in the initial stage of the project (towers A and B) to the shell stage, in addition to four underground parking levels and five above-ground car parking levels for the entire project, the ground floor areas, the commercial areas, and the entrance floors.

The project will be constructed at the junction of Ben Gurion Street and Sheshet Hayamin Street in Bnei Brak. The site is 15.8 dunams (almost four acres) in area. There are building rights for the site (formerly a Dan bus depot) for 200,000 square meters of office and commercial space.

In 2016, Ashtrom Properties bought 50% of the rights to the site for NIS 100 million, and set up a partnership with Dan for the purpose of jointly exploiting the rights on the lot. The two companies intend, initially, to construct two office and commercial towers 34 and 36 floors in height. At a later stage, if they obtain the appropriate permits, they will construct an additional similar tower.

The revenue projection for sales of offices in the two towers is NIS 1.3 billion. In addition, there will be commercial and parking areas for rent worth NIS 160 million annually. Ashtrom's estimated profit from the project is NIS 220 million.

So far, 44,000 square meters of office space in the project have been sold, for NIS 527 million in total (in Tower A), and the two companies plan to start selling space in Tower B shortly. The partners are currently completing excavation and reinforcement work, and now, following the signing of the construction agreement, Ashtrom will start building the towers and the car parking areas.

Ashtrom Group's expected revenue from the construction work is NIS 766 million plus VAT, or some NIS 900 million in total. This amount will be linked to the Construction Inputs Index, and will be paid in accordance with progress in construction. The company will be entitled to a bonus of NIS 5 million if it meets the project timetable.

Construction is expected to take three and a half years from the date that an order to start work is given, which the company expects will happen by the end of this month.

Ashtrom Group's share price rose 1% today in response to the announcement, making it a 20% rise for the year to date.

Published by Globes, Israel business news - en.globes.co.il - on October 15, 2018

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