The Israel Land Authority (ILA) auction for the Israel Military Industries (IMI) lot on Hashalom Street in central Tel Aviv has been won by Acro Real Estate (TASE: ACRO) and Kata Group with a bid of NIS 644 million plus NIS 67 million development costs.
This amount is five times the minimum required bid of NIS 140 million but considerably less than the price the lot would have fetched in the era of zero interest rates. The lot has planning rights for 528 apartments and the bid reflects an average of NIS 1.34 million per apartment for the land.
Acro Real Estate will buy the lot for construction of 364 apartments for NIs 368 million plus development costs of NIS 42 million. Kata Group will buy the lot for construction of 164 apartments for NIS 276 million plus NIS 25 million development costs. Acro and Kata were the winning bids out of 12 bids submitted.
The two lots marketed cover 5 dunams (1.25 acres) for high-rise apartments with street level commercial space. Overall there will be 1,097 housing units on the IMI lot, with a large part of them small 50-70 square meter apartments. On the lot will be buildings 7-9 floors high with 23-floor buildings on the edge of the lot and a 52-floor tower in the northeast and another 5 dunams of open public spaces.
The Israel Land Authority said, “This is a further vote of confidence by real estate developers in the potential for building of new residential, commercial and office projects. We will continue, together with all the parties that work with in the government and local government, to carefully plan and design housing, office and commercial space all over the country, so that it will meet the characteristics and needs of a growing public in the near and far term.”
Published by Globes, Israel business news – en.globes.co.il – on May 6, 2024.
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