The 2018 financial statements of real estate company Levinstein Properties released on Sunday provide an interesting insight into the soaring prices charged for parking in central Tel Aviv, in step with the rise in real estate prices in the city. In a valuation of the Levinstein Tower, situated in south-central Tel Aviv on Begin Road, near the old central bus station, the company set out figures for the asking price for a parking spot in other office towers in the same area, which start at NIS 700 monthly and go as high as NIS 1,600 monthly (excluding VAT). The sample includes among other buildings the Azrieli towers, the Sonol Tower, the Shalom Tower, the Museum Tower, The S.Meier On Rothschild Tower, and the Bank Discount Tower. The average monthly price of a parking spot in the fifteen towers in the survey is nearly NIS 1,300 for a reserved spot and more than NIS 900 for unreserved parking on an available space basis.
At the higher end of the scale is the Azrieli Center, on Hashalom Road adjacent to the Hashalom railway station, with a price of NIS 1,600 monthly for a reserved spot and NIS 1,100 for parking on an available space basis. Prices in towers in the Tel Aviv "City" around Rothschild Boulevard and centered on the Tel Aviv Stock Exchange are also on the high side. Close on the heels of the Azrieli Center is the Gruzenberg Tower in Gruzenberg Street, not far from the Stock Exchange, which charges NIS 1,500 monthly for a reserved spot, but makes do with NIS 800 for unreserved parking.
A few hundred meters away, Psagot House in Ahad Ha'am Street near the Neve Tzedek neighborhood charges NIS 1,400 monthly for a reserved spot and NIS 1,000 for unreserved parking, while a stone's throw away, in the Shalom Tower, also in Ahad Ha'am Street, there are no reserved pots on offer, and unreserved parking costs NIS 1,100 monthly. In the same neighborhood, the Nahmani Tower in Nahmani Street charges NIS 1,250 monthly for unreserved parking, while the Yavne Tower in nearby Yavne Street charges between NIS 1,100 and NIS 1,300 for a reserved spot.
Slightly north of there, the Museum Tower in Berkowitz Street, close by the Tel Aviv Law Courts, charges NIS 1,150 monthly for unreserved parking.
The Levinstein Tower itself, on Begin Road near Harakevet Street, offers a fairly wide range of prices, from as high as NIS 1,500 down to NIS 1,100 monthly for a reserved spot, depending on location, while unreserved parking is at the low end, starting from a little over NIS 700 monthly up to NIS 830. The neighboring Sonol Tower, also on Begin Road, charges NIS 1,100 monthly for reserved parking and NIS 840 for unreserved parking.
Parking spaces a large proportion of revenue
The Levinstein Tower valuation also reveal the large proportion of the total revenue that the company derives from the space it owns in the tower that is accounted for by parking space.
In 2018, operating the parking space generated NIS 7 million for Levinstein, 1% less than in 2017 and 5% more than in 2016, while rents from its office and commercial space in the property totaled NIS 17 million, 7-10% less than in the two preceding years.
On the expense side, operating the car parking space cost NIS 2.5 million last year, while the expenses associated with the office and commercial floors, covering management, maintenance and operation, totaled a little over half that, at NIS 1.4 million.
The surveyors valued the car parking area at the end of 2018 at NIS 69 million.
The office floors are valued at NIS 264 million and the commercial space at NIS 8 million, so that Levinstein's holding in the tower is worth NIS 341 million, 6% more than two years ago, and 2.5% more than at the end of 2017, when it was valued at NIS 333 million.
Construction of the Levinstein Tower was completed in 2000.
The tower has 33 floors, with a total gross area of 34,000 square meters, on top of six floors of car parking and storage space totaling 23,000 square meters. Levinstein's share of the office space is 14,100 square meters, and it owns 465 parking spaces (67% of the parking area) as well as a few hundred square meters of commercial space.
Levinstein Properties, controlled by its CEO Shaul Lotan through its parent company Meshulam Levinstein Contracting and Engineering Ltd. (TASE:LEVI), deals in income-producing commercial space and offices, and Levinstein Tower is one of its main assets.
The company has a market cap of NIS 920 million, after a 10% decline in its share price in the past year. The parent company's market cap declined 7% over the same period, to NIS 480 million.
Levinstein Properties real estate portfolio was revalued substantially downwards at the end of 2018, cutting its total revenue 45% to NIS 91 million while its net profit fell by more than 50% to NIS 52 million.
Published by Globes, Israel business news - en.globes.co.il - on March 5, 2019
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