Fattal launching new Tel Aviv boutique hotel

Bachar House  photo: Kadia Levy

The hotel will be a conversion of Bachar House, at the corner of Lilienblum Street and Nahalat Binyamin Street, a 1922 building listed for preservation.

Fattal Holdings (1998) Ltd. (TASE:FTAL) is launching a new boutique hotel in Tel Aviv in one of the loveliest buildings in the city: Bachar House, located at the corner of Lilienblum Street and Nahalat Binyamin Streets, near the chain's hotel at 22 Rothschild Street, sources inform "Globes." The building will be leased to Fattal for 25 years. Appraisers estimate that Fattal will pay NIS 2 million in annual rent, or NIS 50 million over the lease period.

The building, which is listed for preservation, will be converted from offices to a hotel, including a spa, at an estimated cost of NIS 10 million. A change in the building permit and approval of exceptional use is required.

$400 per night

The building covers 1,350 square meters. The hotel, which is scheduled to open in the second half of the year, will have 26 rooms, five spa rooms and a 250-square meter roof for the guests' use. Architect Ari Shaltiel, preservation architect Naor Meimar, and Feigin Architects are responsible for the design. Fattal Holdings business manager Assaf Fattal, responsible for building the chain's hotels, said that the new hotel would be luxury class, with overnights costing $350-400.

Bachar House, built in 1922, was designed and built by architect Yehuda Leib Magidovich, the first Tel Aviv city engineer. The process of conserving the building was completed in 2013, and it was redesigned for offices, after having housed a branch of Mizrahi Tefahot Bank (TASE:MZTF). A Chinese real estate company dealing in shared workspaces took over the building in 2016, and will remove its tenants in two weeks. The building will then be renovated and converted.

6% state grant

The Ministry of Tourism recently announced that Tel Aviv hoteliers would receive 10% grants on the conversion of buildings to hotels. The grant is limited to NIS 250,000 per room, and Fattal said that the hotel would therefore receive a 6% grant. "The ceiling set by the Ministry of Tourism is designed primarily for popular hotels in which the investment is lower. This is a boutique hotel in a building with a distinguished history marked for preservation, so the investment per room is far greater."

"Globes": The hotel is actually Fattal's smallest in Israel. Are you extending the chain's activity in boutique hotels?

Assaf Fattal: "We're also looking at this segment. Fattal has several boutique hotels, such as U Boutique in Tiberias with 62 rooms and the Haneviim Court Hotel in Jerusalem with 74 rooms. This hotel, which will be the chain's smallest in Israel, will supply the demand for rooms in tourism and business in Tel Aviv, which is increasing yearly. Bachar House is a unique building with a spectacular architectonic design. Its location is attractive, making it an important addition to Fattal's hotel portfolio in Tel Aviv."

Fattal Holdings held its IPO on the TASE last year. The company's market cap is over NIS 5.8 billion.

Published by Globes, Israel business news - en.globes.co.il - on February 3, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Bachar House  photo: Kadia Levy
Bachar House photo: Kadia Levy
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