Matthew Bronfman bids for Rishon Le-Zion lot

A second IKEA Israel branch will be erected on the lot, as the anchor for a new power center.

Matthew Bronfman is in advanced negotiations with the Rishon Le-Zion municipality and the Israel Land Administration (ILA) to buy a 40-dunam (10-acre) lot in the south of Rishon Le-Zion, on the municipal border with New Ziona. Bronfman is expected to erect a power center on the lot, including a second Israeli branch of Swedish furniture chain IKEA, at an investment of some $60-80 million.

The report came at a conference of developers held by the Israel Building Center together with Rishon Le-Zion mayor Meir Nitzan and city engineer Sima Kushnir. Nitzan and Kushnir said that IKEA had concluded its negotiations with the municipality, and that all that remained was for the company to agree the principles and outline of the deal with the ILA.

Bronfman is thus entering real estate dealings in Israel, after leading the consortium that bought the state's stake in Israel Discount Bank (TASE: DSCT), and buying into the retail sector, with holdings in Blue Square Israel (NYSE: BSI ; TASE: BSI) and ownership of the IKEA Israel franchise.

The second IKEA branch will stretch over 28,000 square meters, making it larger than the original branch in Netanya. The Bronfman group can expect to benefit from the high demand for the rest of the commercial space on the Rishon Le-Zion lot deriving from IKEA's presence.

IKEA Israel had sales of NIS 345 million last year, and made a net profit of NIS 35 million. This year's sales are expected to be about 8% higher.

Published by Globes [online], Israel business news - www.globes.co.il - on December 19, 2005

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