Chinese investments in Israel are expanding to the real estate sector. Sources inform "Globes" that the Chinese embassy in Israel is buying Comverse House on Habarzel Street in the Ramat Hahayal neighborhood of Tel Aviv from Meshulam Levinstein Contracting and Engineering Ltd. (TASE:LEVI), owned by Shaul Lotan for NIS 200 million.
The complex contains a six-storey 16,000-sq.m. office building with 15,000 sq.m. of underground parking and 350 parking spaces, storage space, and showers for employees. The building contains office space, halls, laboratories, conference rooms, display rooms, an auditorium, and a dining room.
Comverse Inc. (Nasdaq: CNSI) left the building in January 2015, after announcing that it was moving to a new complex in Ra'anana. Since then, Levinstein renovated the building at a cost of NIS 20 million, and looked for a renter or purchaser. Selling the building is an excellent deal for Levinstein, which will not have to find renters and maintain the building.
The Chinese embassy has been looking for an office building to buy for a long time, and was in negotiations to buy Dan Bus Company's office building in Herzliya Pituah. That building, however, was eventually sold to Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, for NIS 245 million. It is believed that the Chinese embassy will move its current location on Ben Yehuda Street in Tel Aviv to the Ramat Hahayal building. It is also being said that the embassy is planning to convert some of the space to residences for its employees.
Deals in the billions
The Chinese embassy's purchase of the building is an exceptional event, since foreign embassies usually rent their premises in the area of the Ramat Gan Diamond Exchange or near Hayarkon Street in Tel Aviv. The purchase of real estate by the Chinese embassy follows a series of investments in Israel by Chinese companies. China National Chemical Corporation (ChemChina) acquired 60% of Makhteshim Agan (now Adama Agricultural Solutions Ltd. (TASE: ADAMA)) from IDB Holding Corp. Ltd. (TASE:IDBH) in 2001 at a company value of NIS 2.4 billion, and the Tnuva Food Industries Ltd. deal, in which Brightfood acquired 77% of Tnuva at a company value of NIS 8.6 billion, was completed last March. Last June, Delek Group sold a 52% controlling interest in The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) to Chinese company Fosun for NIS 1.8 billion, reflecting a company value of NIS 3.7 billion. In addition, Chinese carrier Hainan Airlines announced it would begin flying to Israel in September 2015.
Last March, Prof. Eugene Kandel, then head of a government task force for promoting relations between Israel and China, with an emphasis on investments, R&D, and tourism, said at a special conference, "Tightening economic links between Israel and China has far-reaching effects on the Israeli economy."
Published by Globes [online], Israel business news - www.globes-online.com - on December 9, 2015
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