Kardan Real Estate Enterprise and Development Ltd. (TASE: KARE) today notified the Tel Aviv Stock Exchange (TASE) that it had signed an agreement to sell a lot in Andromeda Hill in Jaffa for NIS 130 million. In late February, "Globes" reported that Kardan Real Estate was negotiating with Carasso Real Estate and businessman and former FIMI Opportunity Funds partner Samuel Vlodinger, who jointly own 66.6% of the rights being acquired, and Zemach Hammerman, controlled by Haim Feiglin and the Ben-Avraham family, the sale of the other 33.3%.
The lot, located on Louis Pasteur Street, has a building permit for construction of two eight-storey buildings with 55 apartments. The price for the deal reflects a value of NIS 2.3 million per housing unit for the land element. The project includes an underground parking lot, swimming pool, fitness room, laundry, and cafe. It is believed that Kardan Real Estate decided to sell its rights to the lot because, under its current management, the company's strategy is to focus on residential projects aimed at the middle class that can be marketed in a relatively short time, rather than luxury projects that usually take many years to market. When the deal is completed, subject to various conditions, Kardan Real Estate will post a pre-tax profit of NIS 13.5 million.
This deal follows another reported yesterday on the same street, in which the Reality fund and a partner won an Israel Land Authority tender for a 4.7-dunam (1.175-acre) lot with a NIS 182 million bid.
Andromeda Hill is a closed luxury residential neighborhood located above Jaffa Port between Yefet Street and Louis Pasteur Street. A judgment was handed down in 2007 ordering the opening of the entrance to the neighborhood to pedestrians. The neighborhood has a total of 320 housing units, half of which have already been constructed. In addition to the lot sold by Kardan Real Estate, the last lot, zoned for construction of 110 housing units, is owned by businessman Haim Geyer.
The current deal is not the first cooperative venture between Zemach Hammerman and Carasso Real Estate; they are currently jointly constructing 153 housing units in the Bezalel Market project in Tel Aviv, after Carasso bought its share in the project from Elad Israel Residence, controlled by Yitzhak Tshuva, for NIS 55 million.
Kardan Real Estate published its 2016 financial statements in March, reporting a rise to NIS 47 million in net profit (NIS 37.4 million of which is attributed to its shareholders). As of December 31, 2016, the company was building and marketing 406 housing units, of which 275 units had been sold.
Published by Globes [online], Israel Business News - www.globes-online.com - on May 8, 2017
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