Another famed banking real estate property is up for sale. Sources inform "Globes" that Bank Hapoalim (TASE: POLI) is now offering for sale the building that houses its branch on Hayarkon Street in Tel Aviv. The branch contains Bank Hapoalim's private banking center for foreign residents, which is expected to move to another Tel Aviv location after the deal is completed.
The building on Hayarkon contains 1,500 square meters spread over five floors on a 460-square meter lot. The property's value is assessed at NIS 70-90 million, owing to its potential for upgrading.
The urban building plan applying the area includes housing and hotels, which provides a number of upgrading options, such as additional rights, for example. Also contributing to the high value is the location close to the Tel Aviv coast and the city's hotel district, embassies, and luxury housing. It is believed that an important part of those interested in buying the property have hotel uses in mind, and it is therefore likely that a hotel will be constructed on the site.
Bank Hapoalim's Hayarkon branch is one of the bank's best-known branches. It made the headlines 13 years ago when the police raided it on suspicion that a great deal of money laundering had taken place there. Some of the branch's employees were arrested in the raid. The affair ended with the employees' acquittal and a fine of less than NIS 10 million imposed on Bank Hapoalim by the Bank of Israel.
Private banking business has been shrinking in the wake of growing global regulation, including a complex investigation by the US authorities into suspicion that Bank Hapoalim helped its customers evade US taxes.
Selling this property is the latest in a series of sales by the Bank Hapoalim, managed by CEO Arik Pinto. The bank has sold 16 properties at prices totaling millions of shekels in the past two years, thereby reducing its space by thousands of square meters. These streamlining measures, led by the bank's COO division, are both boosting the bank's capital gains and saving on current expenses, especially the high municipal property taxes paid by Bank Hapoalim in the Tel Aviv area.
Sales of real estate by Israeli banks in recent years have generated hundreds of millions of shekels in profits for them. Well-known properties sold include Bank Leumi's (TASE: LUMI) main Tel Aviv branch for NIS 280 million and its current sales of its Dizengoff Center branch.
Israel Discount Bank (TASE: DSCT) is also expected to soon begin a wave of sales of properties in the Tel Aviv area amounting to hundreds of millions of shekels, following the moving of the bank's headquarters to Rishon Lezion. Mizrahi Tefahot Bank (TASE:MZTF) sold its headquarters in Ramat Gan for NIS 270 million ahead of its planned move to Lod.
Published by Globes [online], Israel business news - www.globes-online.com - on September 16, 2018
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