Nitsba Holdings Ltd. (TASE: NTBA), controlled by businessperson Haim Tsuff, an associate of businessperson Koby Maimon, is expanding its operations in the hotel sector. Sources inform "Globes" that the company recently submitted a request for a permit to build a hotel at the entrance to the Airport City business park it owns near Ben Gurion Airport. The permit application, which was submitted to the Modi'in Local Planning and Building Commission, relies on an approved urban building plan and includes no changes or concession, and is therefore expected to be quickly accepted.
The current estimated investment in building the hotel of NIS 850,000 per room comes to far more than NIS 200 million, and the government grant that Nitsba will receive for it is likely to amount to tens of millions of shekels. The planned five-star hotel, which will have 250 rooms on seven floors, with 16,000 square meters of space above ground and two underground floors with 15,000 square meters of space, will be the first built near Ben Gurion Airport, and is expected to serve air crews, passengers whose flights were delayed, and business visitors to the business park. Sources also told "Globes" that Nitsba was negotiating with a number of Israel and international hotel management chains, including Fattal Hotel Management Ltd., controlled by David Fattal.
The hotel is actually being built 15 years behind schedule, because the Airport City plan, which was ready for occupancy in 2001, already included a hotel, but the company chose not to build it until now, probably out of concern about a lack of demand. Nitsba CEO Priel Attias told "Globes" that there were two reasons why the company had decided to go ahead with building the hotel now: "First of all, the Ministry of Tourism made the important decision to extend its grants to everywhere in Israel other than in Tel Aviv and Herzliya, an incentive that did not previously exist, so that we can receive 20% back on the investment in the hotel's construction. The second reason is the increase in tourism, which resulted in the expansion of Ben Gurion Airport and the terminal, thereby generating enormous demand for hotel rooms for the air crews and passengers."
Nitsba's hotel is not the only hotel planned in the proximity of Ben Gurion Airport. In October 2016, the Ministry of Finance decided to build a hotel at Ben Gurion Airport using the design, build, operate, transfer (DBOT) method. This hotel will be part of the map of priority areas in the Law for the Encouragement of Capital Investments. Since then, the Israel Airports Authority has published a tender for construction of a three-star hotel on state land located west of Terminal 3 a number of times. This hotel will have direct access to the terminal. The tender, however, has been repeatedly delayed.
In contrast to the hotel proposed in the tender, the hotel that Nitsba will build will also rely on the business park in which it is located. The anchors of Airport City include tenants such as Arison group subsidiary iShikun & Binui Holdings Ltd. (TASE: SKBN), the central management of Bank of Jerusalem (TASE: JBNK), and other companies,
A few years ago, Nitsba made a strategic decision to enter the hotel business, and is currently building 2,000 hotel rooms in Israel. Nitsba also owns the Eilat Princess Hotel, which it acquired for over NIS 250 million, and which is scheduled to open in the third quarter of this year, following renovations.
Published by Globes [online], Israel Business News - www.globes-online.com - on February 14, 2018
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