The first major deal in the new Rishon Lezion business district has been concluded: the Discount Group, which includes Israel Discount Bank (TASE: DSCT), Mercantile Discount Bank, and ICC-Cal, has won a tender published by the Rishon Lezion municipality for a 21-dunam (5.25-acre) site with a NIS 105.5 million bid. The tender, the first on the site, was approved for validity only a few months ago, and is slated to including 1.7 million sq.m. for business.
Discount Bank's announcement today to the Tel Aviv Stock Exchange (TASE) stated, "The group plans to build a complex on the land purchased and transfer various Discount Bank, Mercantile Discount Bank, and ICC-Cal units to it, including computer facilities. The project and the transfer of the units will take place in stages." As of now, only the land has been purchased, and it will take years for before construction is completed and the complex occupied. There are so far no plans to move the bank's management units to Rishon Lezion.
The plot involved is the first marketed in the new 1,000-dunam (250-acre) business district zoned for business development, residential construction, and leisure. In addition to 1.7 million sq.m. zoned for business, the site is also marked for 5,500 housing units. Future business tenants are expected to include financial corporations, high-tech, business hotels, a center for congresses and exhibitions, research and educational institutions, leisure businesses, and residents. After the plan was approved for validity, the question arose of whether such a large business complex could attract major companies, given the massive business and office construction planned for the coming years, despite the success of the tender just concluded; this question will be answered in the future. At the same time, the area Discount Group is slated to occupy in the coming years will necessarily entail the Group leaving the space it currently rents elsewhere, which will affect the supply and demand equation for offices and business space.
The Elef district is located west of the Ayalon Highway, with access to Road 20, Road 431, and Moshe Dayan railway station. The three light rail lines currently under construction in the greater Tel Aviv region are planned to intersect at the district.
The district is owned half by private parties and half by the Rishon Lezion municipality. The Discount Group site is on a municipality-owned site. Additional tenders are slated for publication soon on municipality-owned land, and later also on privately owned land.
"The dream of turning Rishon Lezion into Israel's new business center is starting to come true," Rishon Lezion Mayor Dov Zur said today. "Approval of the Elef plan is creating the possibility for Israel's best companies of making their home in the best location in Israel, without the traffic jams plaguing the Greater Tel Aviv region, located next to high-speed roads, a heavy railway line, and three light railway lines. I congratulate Discount Bank, ICC-Cal, and Mercantile Discount Bank - three of Israel's leading financial entities - for choosing to make their home in Rishon Lezion. They will soon be able to boast of the good choice they made, and prove it to their colleagues in Israel's business leadership." Zur also revealed that as part of the marketing of land in the tender, the municipality had decided to reduce municipal property taxes in order to attract major institutions.
Published by Globes [online], Israel business news - www.globes-online.com - on June 14, 2016
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