Eliahu in talks to sell Jerusalem's Mount Zion hotel

Mount Zion Hotel Photo: Hotel website

A group of European Jewish investors is planning to renovate the hotel and give it to an international chain to manage.

Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) controlling shareholder Shlomo Eliahu is negotiating with a number of parties to sell the Mount Zion Hotel in Jerusalem for NIS 350 million. One of these parties is a group of European Jewish investors led by David Zisser, son of the late Moti Zisser. David Zisser currently heads a company specializing in the development of hotels in Europe. As far as is known, the talks with his company are still in the initial stages.

If the negotiations with the Zisser group result in a deal, the Mount Zion Hotel will undergo extensive renovations and be managed by an international chain. As far as is known, the group of investors asked Zisser to lead the effort because of his familiarity with the hotel sector. Zisser will not invest his own money in the acquisition. No response from Zisser to the report was available.

Mount Zion Hotel is located on the outskirts of the Old City overlooking the Tower of David, Mount Zion, and Valley of Gehenna. The hotel is within walking distance of important cultural, historical, and religious sites in Jerusalem. The hotel's website states that it offers 117 rooms and 20 luxury suites in a variety of styles, a spa and fitness center with an open pool, conference halls, and a garden for events. The hotel's average occupancy rate is 70%, around the usual for Jerusalem. The hotel has an approved urban building plan for construction of up to 400 rooms, 380 parking places, and event halls. Full exercise of these rights will increase the hotel's built-up space from 11,300 square meters to 49,100 square meters.

Eliahu sold another property in Jerusalem last week

Mount Zion Hotel is one of the holdings of the Eliahu-owned City Garden (Han Ha'Ir) company, whose main asset is the Gan Ha'Ir shopping mall in Tel Aviv. The company, founded in the 1980s in order to build the mall on the former site of the Tel Aviv zoo, later undertook additional projects. City Garden was founded as an equal partnership between Eliahu and the Schechter family. Eliahu bought out his partners three years ago at a value of NIS 1 billion for the partnership's properties, and has been selling the properties ever since.

"Globes" discovered last week that Eliahu had sold another property in Jerusalem held by City Garden - a lot on Rabbi Akiva Street - to the haredi (Jewish ultra-Orthodox) owners of real estate development company Hadas Capital for NIS 305 million. The 3.5-dunam (0.875-acre) lot is located next to the luxury Jerusalem of Gold residential project, developed by Eliahu and Schechter. Eliahu previously asked for a higher price for the lot, but had to compromise on the price because of the ongoing crisis in the Jerusalem luxury real estate market.

Moti Zisser was the controlling shareholder in Elbit Imaging, which collapsed early this decade. Elbit Imaging, which developed real estate, mainly in Eastern Europe and India, encountered difficulties following the global crisis late in the preceding decade. The company's bondholders took control of it in early 2014 in the framework of a debt settlement in which 70% of the company's NIS 2.5 billion debt was written off.

Published by Globes, Israel business news - en.globes.co.il - on May 1, 2019

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

Mount Zion Hotel Photo: Hotel website
Mount Zion Hotel Photo: Hotel website
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