Blue Square Real Estate Ltd. (TASE: BLSR) has signed a deal to acquire the Gindi family's shares in TLV mall, The deal includes the fashion mall, the residential towers above it, and all of the other land rights on the site. Manor and Kfir Gindi and Ori Levy are retaining ownership of the nearby 48-storey Gindi TLV luxury towers.
Blue Square Real Estate, controlled by Moti Ben-Moshe, will pay NIS 225 million for the Gindi group's 50% holding in the TLV Mall and the residential towers overlooking it, plus additional areas on the site of the former wholesale market zoned for rental housing, hotels, and more commercial space.
The payment is part of NIS 350 million in owners' loans, so that the Gindi group is actually losing NIS 125 million on the deal, after deductions from the value of the mall.
The deal makes Blue Square Real Estate the sole owner of the mall and the entire site, except for the four towers, which were never included in the partnership between the parties.
Ben-Moshe made it clear that his company was determined to continue implementing its new business strategy. He said, "The changes we have begun to make this past year in the mix of business are clearly having an effect, as seen by the 11% rise in proceeds since the beginning of the year and the even more substantial form of NOI in comparison with last year. I have no doubt that when the massive urban development in the area is completed, including the two light railway stations on the site (Carlebach and Yehudit), and when occupancy of 2,500 housing units near the mall is completed, and hundreds of thousands of new offices and hotels are located in the surroundings, we will realize the inherent business potential in the project."
Blue Square Real Estate CEO Michael Zissman said, "The site will already benefit in the coming months from accelerated growth of thousands of housing units, offices, and hotel rooms planned in the area. Our business plan is well-organized, and we are prepared to supply the new tenants and the huge audience that will pass through the light railway stations a variety of shopping, entertainment, and leisure experiences."
The Gindi group said, "We signed today an agreement to sell our share in the TLV Mall, and the Lev Tel Aviv Towers project to our partners in the project since it was built - the Blue Square Real Estate group. A positive and business-like solution has been found to all of the disputes that we previously had, and the two sides are glad to turn over a new leaf. This the end of a significant period. We are confident that Blue Square Real Estate, one of the largest income-producing properties (offices and commerce) companies in Israel, will be able to continue benefiting from the fruits of the investment for many years."
The negotiations between the parties were first reported in "Globes" last November. "Globes" reported the purchase of half of the rights in the TLV Mall owned by the Gindi Investments group, a family company controlled by Gindi Capital, controlled by Manor Gindi, Ori Levy, Eyal Friedman, and Kfir Gindi (25%) and brothers Moshe and Yigal Gindi (25%).
TLV Mall, which contains 32,500 square meters in space, was opened to the public in March 2017. Its value has since eroded. Following the mall's poor results, a number of write-downs in its value were made this year. As of the end of the third quarter, the site's value was NIS 1.62 billion, compared with NIS 1.68 billion at the end of the third quarter of 2018.
Published by Globes, Israel business news - en.globes.co.il - on December 23, 2019
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