Hagag Group Real Estate Development Ltd. (TASE: HGG) today notified the TASE that it has acquired from Wardinon Real Estate and Investments Ltd. (TASE: WDRE) an option to buy all the rights to the Somail lot at the corner of Ibn Gvirol Street and Arlozorov Street in Tel Aviv. Hagag will build a 30,000-square meter 50-story residential tower with 200 apartments on the site. The building will have a commercial ground floor facing Ibn Gvirol Street and a six-level underground parking garage.
In August, Wardinon Real Estate notified the TASE that it had acquired an option to buy land at the corner of Ibn Gvirol Street and Arlozorov Street from Eurocom Real Estate Ltd. and a group of private landowners. In today's deal Wardinon and its partners sold part of their rights to Hagag, keeping 24% of the project to themselves.
Hagag will handle the project's administration and marketing in exchange for management fees set by the parties. The option given by the landowners has two parts: one from the private landowners and the other from Eurocom Real Estate, for a total price of more than NIS 200 million.
The site has an approved Urban Building Plan deposited by the Tel Aviv Local Planning and Building Commission, and is now going through the objections process. The tower, together with three other adjacent high-rises, which will be built later, will be among Tel Aviv's tallest buildings. All the buildings are located between Ibn Gvirol Street to the west, Jabotinsky Street to the north, Arlozorov Street to the south, and Ben Saruk Street to the east.
One of the reasons for the delay in the realization of the plans for the site has been a dispute between the landowners and the Tel Aviv Municipality over the rights of the existing buildings on the land. At the same time that the options agreement was signed, an agreement was signed for vacating all the current residents, which is a necessary condition for the building permit, and which has prevented construction until now. With the settlement for vacating the residents, and as soon as a decision is made on the appeals, it will be possible to issue a building permit for the project.
Published by Globes [online], Israel business news - www.globes-online.com - on December 12, 2012
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