June 9, 2021

Tel Aviv glass towers spread south

Globes, Guy Nardi, 09.06.2021

Everybody approaching Tel Aviv from the La Guardia Interchange on the Ayalon Highway (Road 20) is greeted by a view of impressive high-rise office and residential developments to the north and usually traffic jams clogging the multi-lane highway. The view around La Guardia itself is of neglected, old buildings.

But the La Guardia Interchange area is beginning to change with the first of many high-rise glass towers just completed. Vitania Tower, named for real estate developer Vitania (TASE: VTNA), rises by the southwest corner of the La Guardia Interchange. In the 40-floor tower are the car showrooms of BMW, Mini Cooper, Ford and Mazda on the lower floors. Above then tenants include law firm Gornitzky & Co., which has bought five floors, gaming developer Moon Active and shared workspace company Mindspace have also taken floors and a large company traded on the TASE has taken 13 floors.

Vitania Tower is just the first of many high-rise buildings set to rise around the La Guardia Interchange according to plans already approved by the Tel Aviv District Planning and Building Committee in 2018. These include five 40-floor towers - two alongside the Ayalon Highway and three on Haharash Street. Between the towers will be six-floor buildings bringing the total amount of space in the area to 240,000 square meters of office, commercial and hotel space as well as 200 housing units and 7,000 square meters of public buildings.

Most of the land covering nearly six acres is owned by Vitania and Delek Automotive Systems (TASE: DLEA) with the southern third owned by Adv. Alon Hoter-Yishay. Two months ago the Tel Aviv District Planning and Building Committee approved the architectural plans for the continuation of the area's development.

Vitania CEO Ofer Ziv said, "In the next stage, two more towers will be built, one with offices and the other with a hotel and apartments. We originally had rights for 48,000 square meters and we have increased that to 150,000 square meters. We will receive the first building permit this week and I expect this second stage to be ready in another 4.5 years."

Ziv estimates that the two towers in the second stage of the project including parking will cost NIS 1.1 billion to build.

Ziv admits that although the location is central, it has its challenges. "Overall it is only one junction away from the Azrieli Center and in terms of transport it is one of the best places in Tel Aviv, close to a railway station and the central bus station and the light rail Green Line will go over Haganah Bridge. It is 200 meters from the Old Central Bus Station where they are building hundreds of new homes. The Tel Aviv Municipality is planning a pedestrian bridge, like the Yehudit Bridge, which will connect us to Yad Eliyahu. If you have an e-scooter, you can be on Rothschild Boulevard within two minutes.

Architect Avner Yashar also believes in the location. "It's excellent that the beginning of the project includes mixed use. We are planning another project over the road in Harakevet Street. All these projects will link up with the city. You have to think ahead. When you think about urban planning you can't just think two years ahead."

Yashar also thinks that the mix of heights of the buildings will create a bustling atmosphere.

Regarding prices of the offices, Gornitzky & Co. is paying NIS 80 million to buy its five floors and leasing costs NIS 90-110 per square meter for unfurnished offices.

Published by Globes, Israel business news - en.globes.co.il - on June 9, 2021