Azrieli buys Mount Zion Hotel for NIS 275m

Impression of expansion of Mount Zion Hotel / Imagin: Lea Rubanenko Architects, View Point

Azrieli Group will invest NIS 500 million in expanding and renovating the historic building overlooking the Old City of Jerusalem.

Azrieli Group is acquiring the Mount Zion Hotel in Jerusalem for NIS 275 million. Migdal Insurance controlling shareholder Shlomo Eliahu owns the hotel through his holdings in the City Garden company. Azrieli will invest NIS 500 million more in expanding and renovating the hotel. Other Azrieli Group hotel projects are in the development and construction stages.

Several real estate groups in Israel are buying hotels, converting existing buildings to hotels, or constructing hotels from scratch, sometimes in combination with residential apartments, among them Israel Canada and Nitsba. Azrieli is also in the picture.

The Mount Zion Hotel is located in West Jerusalem on the outskirts of the Old City in a historic building constructed as a hospital in 1882. The Israel Land Authority bought the property in 1972, and sold it to a developer who planned to demolish the building, and did in fact partially demolish it. A campaign against the demolition of a building designated for preservation was successful, however, and it was converted into a hotel. The hotel was renovated in 2006, and currently has 137 rooms, plus conference and event halls.

The hotel, located on a 13-dunam (3.25-acre) site, has 11,600 square meters of built-up space. The deal includes 22,400 square meters of above-ground construction rights and rights to construction of a 15,200-square meter underground parking lot. Azrieli Group plans to continue operating the hotel on its current format, while renovating it and using the additional construction rights to expand it to 400 rooms and build an underground parking lot with 380 parking spaces. Renovations will include restoration and preservation of some of the existing buildings on the site. Azrieli plans to manage the hotel itself.

Azrieli has confidence in the hotel sector, which is growing with the number of tourists visiting Israel. Israel expects to finish 2019 with 4.5 million tourists, an all-time record. Israel has 55,000 hotel rooms, 2% more than last year.

"The hotel sector interfaces the group's core income-producing real estate activity," Azrieli Group says. "Among other things, it will enable Azrieli Group to take advantage of its unique development capabilities, and to widen the mix of its activity for the creation of a new growth engine in a large and important field." In 2018, Azrieli acquired a lot in the main business center of Modi'in, on which it will build a project containing an 84-room boutique hotel that will have the great advantage of proximity to Ben Gurion Airport, as will other hotels slated for construction in the area.

Azrieli is also planning the construction of the 91-storey spiral tower on the site of Yedioth Ahronoth House in Tel Aviv. This site also has construction rights for 250 hotel rooms on the upper floors.

Published by Globes, Israel business news - en.globes.co.il - on December 9, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Impression of expansion of Mount Zion Hotel / Imagin: Lea Rubanenko Architects, View Point
Impression of expansion of Mount Zion Hotel / Imagin: Lea Rubanenko Architects, View Point
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