Six months after the opening of the TLV fashion mall on the site of the old Tel Aviv wholesale market, sources inform "Globes" that Gindi Investments 1 Ltd. (TASE: GIND.B1) (25%) and Moshe and Yigal Gindi (25%) are negotiating to sell their stakes in the mall at a value of NIS 2.15 billion. Blue Square Real Estate Ltd. (TASE: BLSR), which is a 50% partner in the project, stated, "We are unaware of any desire by the partners to sell their share, but should this prove to be true, Blue Square Real Estate has refusal rights, which it plans to exercise."
The TLV mall opened last March simultaneously with the occupancy for the residential project adjacent to the mall. The project has 700 apartments. The developers for the project, including both the real estate part and the mall part, reported that the shopping mall alone had 33,000 square meters, and NIS 1.5 billion had been invested in it. The shopping mall now has an 87% occupancy rate, with a lineup that includes both popular and prestigious fashion chains.
Appraisers Adina Greenberg and Ronen Katz recently published an appraisal for the mall, which was attached to Gindi Investments' quarterly reports to the Tel Aviv Stock Exchange (TASE), in which it put the mall's value at NIS 1.813 billion. Since the mall opened, there has been criticism of the small number of visitors, due to a lack of convenient access, among other reasons. The BDO report also mentioned the relevant threats to all the malls in Greater Tel Aviv, including a surplus of commercial space and an increase in online purchases.
At the same time, market sources said that the value of the mall, which currently reflects the running-in period, is likely to rise in the short term when it is fully occupied and restaurant areas are added to it, and also in the longer term when construction is completed and the light railway line is opened. In view of these assessments, it appears that Gindi Investments, with its shortage of cash, is asking a price that reflects the projected increase in value, not the current value. Gindi Investments CEO and owner Manor Gindi is handling the negotiations for the sale of the share of Gindi Investments and Moshe and Yigal Gindi.
Geocartography Knowledge Group CEO Dr. Rina Degani, which provided an economic opinion on the mall for Gindi Investments, told "Globes," "A large proportion of the residents of Tel Aviv who were thought likely to frequent the mall have not gone there, mainly because they have the idea that access to the mall is inconvenient. Most of the visitors to the mall were from out of town. These visitors in the past three months said that access to the mall was convenient, including free parking, and that they would return to the mall. In other words, we found that those who have not yet visited the mall were worried about going there, but that those who did visit the mall expressed a positive opinion about it and a desire to visit it again."
Degani added that the apartments in the residential towers built would soon be occupied, thereby increasing the number of visitors to the mall, and the second part of the residential project would amount to 2,000 housing units. "This is in addition to the residential towers scheduled to arise on the former Israel Broadcasting Authority site and on the Kanarif site, all of which are located within walking distance of the mall, and will be occupied by wealthy people. Furthermore, office towers are still being built in the area, such as the Hajaj group's Ha'arba'a towers, which will increase the figure of half a million people coming to Tel Aviv every day to work."
Degani said that people working in the area do not necessarily buy, but they eat and buy office gifts - a solution not provided by the Sarona site. "In addition, in a few years, when work on the light rail is completed, the entire area will prosper, and the mall will be just as good as the Azrieli mall, which today benefits from people coming from the Hashalom railway station. That will substantially boost proceeds in the mall," she pointed out
Published by Globes [online], Israel Business News - www.globes-online.com - on September 10, 2017
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