While tension between Israel and the Palestinians is at a peak, an ambitious project by Rami Levy will open next month: an Israeli-Palestinian shopping mall a few meters from the separation wall at the edge of the Atarot neighborhood of Jerusalem. Construction of the mall, which began two years ago, cost NIS 200 million. 50 businesses will open on the mall's two floors.
The mall, located on a 17.5-dunam (4.375-acre) lot, has 25,000 square meters of built-up space, 13,000 square meters of which is commercial space. The mall has two levels: an open power center and a closed mall, with a covered parking lot between them. The mall occupies a strategic location opposite Ramallah on Highway 60, which connects Pisgat Zeev, Neve Yaakov, and the Atarot area to Highway 443.
Rami Levy Hashikma Marketing, Rami Levy's private real estate company, owns properties that it rents out to Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI). It owns Mevaseret Mall and the properties of Rami Levi Modi'in and Rami Levy Shilat. Levy is also a 50% partner in Mega Or Holdings Ltd. (TASE:MGOR) in a shopping mall in Ariel. The real estate company also owns non-commercial real estate.
Sources inform "Globes that Rami Lev is currently preparing plans for requesting a building permit for another floor in the Atarot mall. He wants to start building a third floor a few months after the mall opens to increase the supply of commercial space by 1,500-5,000 square meters in order to meet strong demand from renters. In contrast to Atarot, Rami Levy's mall in Mevaseret Zion is not yet fully occupied, among other things because of other malls surrounding it that deter chains from opening more nearby stores. Rami Levy also owns more shopping centers all over Israel.
The second floor of the Atarot mall directly overlooks the houses next to the separation wall in Ramallah. "I'm not afraid of the security situation," Levy told "Globes." "I came to the area because of two things: I like making the wilderness bloom and, in my opinion, Atarot is the most expensive and necessary land for Jerusalem. It was a neglected area, and in my opinion, this has to and can change. I believe that the site is suitable for any population - Jews, Muslims, and Christians - and this will bring coexistence. No one took the initiative with this land, and some people felt that it was a dangerous thing to do in a business area. Two years ago, when we started marketing, the chains were hesitant because of the project's location, but they eventually realized its great latent commercial potential."
How big is the potential? "230,000 Arab residents with blue identity cards live around the project, in addition to the Jewish communities. There is no shopping center around there that can serve them," Levy says.
According to Levy, marketing for the project has been completed, with over 100% occupancy of the leased stores. "There is very strong demand for the project because of the number of people around. We have a waiting list. There was a well-known chain that realized at the last minute that there was no place left for it inside. They wanted space in the mall so much that we put them into a small space that was supposed to have been for supermarket shopping carts. Not a single square meter is unoccupied."
"Globes": Didn't the security tension deter renters?
Levy: "After everything that is happening and because of the situation, there are many Palestinians interested in developing economically and setting up businesses or coming to buy there. It's a population that has been ignored and deserves service without having to travel 30 minutes or more in a car to reach a mall."
In contrast to the surplus commercial space in large cities in Israel referred to in the recent State Comptroller's report, the situation in this area is completely different. Osnat Zagrun from Moria YLY Properties and Investments, which marketed the project, says, "The current ratio of commerce to population in Israel is 1.5 square meters of commerce per person. In this area, the ratio is completely different - 17 people per square meter. The potential is obvious."
"The marketing process was unusual. Chains were afraid"
Which chains will be in the mall? Super-Pharm, Fox-Wizel Ltd. (TASE: FOX), Fox Home, Laline, The Children's Place, Crazy Line, Machsanei Hashmal, Hamashbir 365 Holdings Ltd. (TASE:MSAH), Golf & Co. (TASE:GOLF), Nimrod Shoes, Wow Cosmetics, Optica Halperin, Kiwi Kids, Greg Café, Burgers Bar, and others. The mall will also have an especially large branch of Rami Levy Chain Stores with almost 5,000 square meters.
"The marketing process was unusual because of concern about the location. Some of the chains signed by themselves, others preferred to independently take a franchise holder from the Arab sector, and still others made opening the store contingent on our bringing them a franchise holder from the Arab sector," Zagrun says. "Hamashbir and Golf & Co. operate their stores by themselves, but with the Fox group, for example, we signed several deals with the group, and several months ago, it was decided to give the operation to a franchise holder who operates stores for them all over Israel in the Arab sector. Crazy Line also came with a franchise holder from the sector. For Café Greg, on the other hand, we brought a franchise holder from the Arab sector."
Zagrun adds, "It was important for us to bring in players who were not Israeli chains, but which sell in the Arab sector, for example Silverado, a gold jewelry chain with eight branches in East Jerusalem and Ramallah; Giovani Paolo, a men's wear store that has operated for 40 years on Salah a-Din Street in Jerusalem; and Tag, a store in Ramallah that markets Gant brand clothes and is now also opening a store with us. The local community, at least, believes in the project and thinks that it will create jobs and improve the quality of life for the residents. We're hearing from people in the field and the renters that signed leases that if peace doesn't come from politics, it will come from business."
The mall's success, however, does not depend merely on the potential from the number of people, but also on the security situation. "Originally, it was supposed to have been a shopping center that would bring two communities together: Arabs and Jewish residents in northern Jerusalem and the Talpiot area. It's a great challenge to integrate these two communities, especially at a time like this," says Tamir Ben Shahar, CEO of the Czamanski & Ben Shahar consultancy firm.
He adds, "When you look at the situation in European countries, it's customary for there to be shopping centers on the border, with people going there from both sides of the border, but that's not at all the situation in Israel. The question marks and the threat cause uncertainty in a sensitive security situation. It's possible that in the future, the center will have to serve only one community, not both of them."
Which one of the communities? "If I had to choose one of the communities as a developer, I'd choose the Arab community - the potential there is greater. Keep in mind that 200,000 residents is the number of people in Ashdod or Petah Tikvah; it's huge. On a day like today, it has to be said that Rami Levy is a brave man and an ambassador of peace," Ben Shahar says.
Published by Globes, Israel business news - en.globes.co.il - on November 14, 2018
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