Azrieli Group Ltd. (TASE: AZRG) is scheduled to move tenants into its first sheltered housing project. The company constructed the project itself under the Palace brand name. Azrieli bought the lot from developer Israel Levy, who obtained the lot from the Israel Land Authority in 2007 for only NIS 14 million, in February 2014 for NIS 51 million.
Azrieli constructed four sheltered housing buildings with 239 housing units and 136 geriatric beds on the lot. Two of the buildings are elliptical with seven and eight storeys, respectively, and extensive public spaces. The project contains a total of 35,000 square meters of built-up space above ground, plus an underground parking lot with 600 parking spaces. The total investment including the land and construction amounted to NIS 390 million.
The sheltered housing units include two and three-room apartments with 48-72 square meters and small and large balconies of 4-70 square meters each. Purchasing a housing unit in the complex requires a NIS 1.4-2.7 million deposit and a NIS 5,300-10,000 monthly management fee. The amount of the deposit is projected to fall each year by 3.5%. As of now, before tenants move into the building, 70% of the housing units have been marketed. In addition to the housing units, the complex also has a restaurant, swimming pool with access to disabled people, fitness room, health clinic, synagogue, library, lecture halls, bridge rooms, and shuttles for tenants to an Azrieli shopping mall located two kilometers away from the sheltered housing complex. The tenants are also entitled to bring their pets into the complex to live with them.
The complex itself will contain a branch of a pharmacy chain and a café to be constructed on the main street, which will be open to the general public. The complex will also house a dialysis clinic that will serve residents of the area. Another task imposed on Azrieli by the Modi'in municipality is construction of a day center for senior citizens near the sheltered housing, to be operated by the municipality.
Azrieli's activity includes construction and management of shopping malls, offices, and other holdings. Sheltered housing currently accounts for 6% of the group's business. In addition to the complex in Modi'in, Azrieli's Palace sheltered housing chain currently operates sheltered housing buildings in Tel Aviv and Ra'anana with a total of 560 housing units and 200 geriatric beds. Besides the Modi'in project, the chain is currently planning and building three more sheltered housing buildings in Lehavim, Rishon Lezion, and Jerusalem. When these are completed, the Palace chain will have 1,700 housing units and 550 medical beds.
Azrieli chairperson Danna Azrieli said on an initial tour of the complex, "A number of years ago, we looked for another sphere to enter, and saw that sheltered housing was a suitable niche we would be able to manage and strengthen, because Azrieli is a group that manages real estate instead of selling it. The third age has grown and grown. People today are living longer than they used to. If you take into account the projected population growth, today there are one million people over age 65, but a decade from now, there will be 1.3 people in the third age. We will manage the sheltered housing like we manage our commercial and office space, including the medical section."
Published by Globes [online], Israel business news - en.globes.co.il - on October 8, 2018
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