Eric Mirowski, Globes, 27.01.2020
Abramovich's novel against the backdrop of the Shield in Tel Aviv / Photos: Amir Meiri, Eyal Yitzhar; Adapted by Tali Bogdanowski
The deal : It was recently announced that the Shield Building (also known as the "Beit Hachshara") was sold to Roman Abramovich, considered one of the world's richest, for NIS 200 million.
The property : The property is located at 2 Shenkar Street in Tel Aviv, west of the Neve Tzedek neighborhood, next to the Herbert Samuel Promenade, on a 2 dunam plot of land, on the first line of the sea (in the textile complex). It comprises five floors, 6,500 square meters of office space. About 130 stores on two upper floors and about 120 parking spaces. The land belongs to the Israel Lands Authority and the lease agreement with the authority ends in 2035.
History : In the 1990s, the settlement company sold Beit Haganach to Migdal Insurance Company, which in 2016 sold the property further, to French businessman Dominique Romano, for NIS 150 million.
The planning : It is estimated that Abramowitz plans to convert the property from offices to hotels or to luxury hotel residences. According to the Tel Aviv Municipality's 5000 outline plan, the lot, located in District 5, is defined as a "hotel-biased area." An examination by Uri Sofer architect shows that the potential building area is about 12,000 sq.m.. The realization of the rights involves the submission of a detailed plan, which is expected to take several years.
Environment deals : In May 2019, the Aviv Group and Lenny Group purchased a plot on Herbert Samuel Street 6-8 in Tel Aviv for NIS 250 million. On the 2-acre lot, a 19-story building can be erected, comprising a commercial floor, six-story hotel with 150 rooms, and above it floors of luxury residences comprising 58 apartments.
Luxury hotels nearby : Nearby is the Herbert Samuel Opera Hotel launched by Nakash Group in 2019 in the Tel Aviv Opera Building, which includes 110 rooms, the Drisco Hotel opened in 2018 in the US Colony for NIS 120 million and the Stai Hotel in the Jaffa complex in Jaffa In 2017, according to estimates, the Nakash brothers invested about NIS 300 million.
Alongside close launches (such as the Kempinski Hotel), other international chains have recently announced the establishment of luxury hotels in Tel Aviv. The Mandarin Oriental chain recently announced the establishment of luxury hotels and apartments in Tel Aviv, as well as the Novo chain (2020) and Ritz Carlton (2022-2023). The last two will establish the hotels on Rothschild Boulevard in Tel Aviv. The Four Seasons network is also looking into entering a hotel and luxury project on the Jaffa Road in Tel Aviv.
Bottom line : The deal embodies the momentum of combining luxury hotels and luxury residences in a unified structure in Tel Aviv. An indication of a worthy deal with promising potential.
The transaction analysis was carried out by appraisers Shmulik Cohen and Karni Gatrade, joint owners of SK Real Estate Appraisal Office