Regency Jerusalem Hotel Ltd. (TASE:REGE-M), a subsidiary of Hagag Group Real Estate Development Ltd. (TASE: HGG), controlled by brothers Yitzhak and Eido Hagag, has exercised its option, signed in February, to acquire the Recital Hall lot, near the Azrieli Towers in Tel Aviv, at a value of NIS 91 million. The company will build a 21-storey office building, and there is a plan to increase the height by ten more floors.
Last Thursday, the buyers group organized by the Hagag brothers to acquire the lot signed the sale agreement with the landowner, Shuli Avraham, to acquire 80% of the Recital lot for NIS 53 million plus VAT. The buyers group received an extra three months to exercise its to right acquire the remaining rights to the lot.
The reason for the relatively low price of the lot is that the landowner is a member of the buyers group, and will receive five floors of the planned building at no cost.
The original plan calls for the construction of a 21-storey office tower, but the developers have submitted a plan to the Tel Aviv Local Planning and Development Commission for a 31-storey building. Regency will buy the penthouse duplex and commercial and parking space for the additional planned floors in the tower, which will be branded as H-Tower. Recency will market the building's office space through the buyers group at a starting price of NIS 9,500 per square meter.
The buyers group includes the tower's owners of Africa-Israel Industries Ltd. (TASE: AFID) (formerly Packer Plada), brothers Lior and Ahikam Cohen, Mellanox Technologies Ltd. (Nasdaq:MLNX; TASE:MLNX) chairman and CEO Eyal Waldman, Menorah Izu Aharon Group Ltd., and law and CPA firms.
The tower, designed by MYS Architects, will top a 16,000-square meter parking garage and luxurious lobby, and will include commercial space. Occupancy in the project is scheduled for three and a half years from now. The tower is part of Tel Aviv's new North Central Business District, which will comprise a series of towers with 500,000 square meters of office, commercial, and entertainment space. Most of the towers in the district are already under construction.
Published by Globes [online], Israel business news - www.globes-online.com - on August 27, 2012
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