Eliahu sells downtown Jerusalem lot for cut price NIS 305m

Eliahu's downtown Jerusalem lot Photo: Yossi Zamir

There is a valid construction permit for a 25-floor tower on the lot but Shlomo Eliahu had to compromise on the price due to the crisis in the Jerusalem luxury real estate market.

One of the largest real estate deals in recent years in Jerusalem, and in Israel in general, was signed last week. Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) controlling shareholder Shlomo Eliahu sold a lot on Rabbi Akiva Street for NIS 305 million. The buyers are haredi (ultra-Orthodox Jewish) businessmen Hillel Zuribin and Asher Sabag, owners of Jerusalem real estate development company Hadas Capital.

Asking price NIS 350 million, selling price NIS 305 million

The 3.5-dunam (0.875-acre) lot is adjacent to the prestigious Jerusalem of Gold residential project previously developed by Eliahu, who purchased the land for the project and the land now sold together with the Schechter family in the 1990s for NIS 25 million. The two sides cooperated in two other deals in which they purchased Gan Ha'ir in Tel Aviv and the Har Zion Hotel in Jerusalem.

Three years ago, Eliahu bought the Schechter family's share in their joint properties for NIS 400 million. He then tried to sell part of the properties. Sources inform "Globes" that he previously asked for NIS 350 million for the lot he is now selling, but had to compromise on the price, due to the ongoing crisis in the Jerusalem luxury real estate market.

Eliahu previously sought to build the second part of Jerusalem of Gold on the lot that he is now selling, but the project did not go through, although construction on the property did begin. Six underground parking levels and store rooms have been built to date. The lot owners obtained a construction permit that is still valid allowing construction of a 25-storey residential tower. The permit allows construction of 176 housing units with 17,000 square meters of total space. Most of the apartments will be small 2-3 room apartments, with some four-room apartments.

The deal also includes the sale of four buildings designated for preservation on an adjacent lot, with 1,500 square meters of space, including residential, office, and commercial space. There are several reasons for the high price of the land. Beyond the scarcity of lots on Rabbi Akiva Street and the major advantages of the location, which is close to Gan Atzmaut, Hillel Street, and the Old City walls, another prominent advantage is that construction can be begun almost immediately, because the construction permit is valid.

Deals in the hundreds of millions of shekels

Since the middle of the preceding decade, the luxury real estate market in Jerusalem has shifted to Mishkenot HaUma, then called the Ministry of Foreign Affairs lot, next to the International Convention Center. In December 2006, B. Yair bought land there for NIS 474 million in an Israel Land Administration tender. The land was zoned for construction of 466 apartments. Another major deal on the site took place five months ago, when M. Aviv and Leny Group bought 11 dunam (3.75 acres) from Isras Investment, controlled by Shlomo Eisenberg, for NIS 299.5 million. The land was zoned for construction of 265 apartments. Under the deal, Isras will receive payment in cash and the proceeds from the sale of one quarter of the apartments.

Hadas Capital declined to respond to the report.

Published by Globes, Israel business news - en.globes.co.il - on April 22, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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Eliahu's downtown Jerusalem lot Photo: Yossi Zamir
Eliahu's downtown Jerusalem lot Photo: Yossi Zamir
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