"Our expertise lies in creating value out of nothing. We take empty land that no-one is interested in. The land on which the Ayalon Mall stands was a garbage heap before we built the mall, and we were also the only ones to bid in the tender for constructing the Modi'in Mall," Azrieli Group Ltd. (TASE: AZRG) chair Danna Azrieli said today at the inauguration of the group's new mall in Ramala, which is also the inauguration of the first asset under Danna Azrieli's leadership, after the death of her father and the company's founder, the late David Azrieli.
Danna Azrieli declared that the group intended to expand its commercial space by 50% within five years. Will revenue rise at the same rate? On this, group CEO Yuval Bronstein said, "It could be that the rise in revenue will be slightly less than the rise in square meters."
The Azrieli Ramla Mall, the group's fourteenth mall, was built in the center of Ramla at an investment of NIS 400 million. The mall, which will officially be open for business tomorrow, is already fully occupied, with 120 stores and 15 stalls. Azrieli Malls CEO Arnon Toren estimates that the businesses in the mall will turn over NIS 480 million a year, excluding VAT.
Rents in the mall are substantially lower than in the group's leading malls such as Jerusalem's Malha Mall and the Ayalon Mall in Ramat Gan, at NIS 130-300 per square meter. Management fees are however relatively high, at NIS 80 per meter.
Ramla is a city of 77,000 people, with Arabs accounting for 24% of the population. The mall is meant to serve Ramla and Lod directly, but the Azrieli Group expects that it will attract people from a larger radius, even though that radius is already saturated with commercial space, including among other things the Bilu shopping center, Azrieli Mall Modi'in, and the Rehovot Mall.
Retailers say that, under Danna Azrieli's leadership, the group is investing more in its assets, citing the investment in upgrading the Malha Mall and the investment in the Negev Mall in Beersheva (the group refuses to disclose amounts) and the NIS 100 million investment in the Ayalon Mall. "It's simply what is relevant nowadays," Azrieli responds. "My father loved architecture and design," she says, "it's a matter of timing. Times have changed. People expect certain things when it comes to finish and service, and I understand that it's necessary to invest in these things as well."
Do you feel the burden of responsibility?
"Yes. There is a burden, but there's a positive and creative aspect. I consult all the time. My responsibility is to choose a direction and put the right people in place. It's important to me to succeed."
Published by Globes [online], Israel business news - www.globes-online.com - on March 2, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015