24 years after the evacuation of the IMI Magen weapons factory in Tel Aviv, Shikun VeBinui will build 164 apartments for rent on the site

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Shikun VeBuni won a tender from the state-owned company to rent an apartment for the construction of a long-term rental project with 164 apartments on Derech Hashalom 17 in Tel Aviv and will pay NIS 203 million, Calcalist has learned. The victory of Shikun VeBinui was determined at the end of a tense bidding process in which the Azorim Living Company also participated.

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The envelopes with the bids of the companies bidding in the tender were opened on Tuesday last week and then it became clear that in addition to the Living and Housing and Construction areas, another 6 bids were submitted by Ashtrom, Efi Properties, a joint bid by Electra and Structure, Praszkowski, Nathaniel Group and Guy and Doron Levy. The difference between this leading bid of Azorim and that of Shikun VeBinui was about 1%, and according to the rules of the tender, it was determined that a bidding process would take place. The drama continued this morning when only in the third round of bidding was the winner determined. In the first two rounds, there was no bid that was higher than the competing bid by more than 3%, so the fortune fell only in the third round, after Shikun VeBinui improved its bid by NIS 15 million compared to its bid on Thursday. This is the second apartment tender for rent in which Shikun VeBinui wins. In 2016, she won a tender to build a 333-unit project for long-term rent, which is currently being inhabited in the Arnona neighborhood of Jerusalem.

The old IMI compound on Derech Hashalom Photo: Yariv Katz

Tamir Cohen, chairman of Shikun VeBinui, told Calcalist: “I am proud and happy about our second project in collaboration with an apartment for rent. Together we will continue to build comfortable and optimal housing options for more and more young families in Israel. Especially in the days when the economic horizon seems difficult and complicated, we believe in this product of long-term permanent rental housing. ”

The tender was for the price of the land, with the winner having to pay NIS 8.2 million in development expenses to Remi, 5.3 million of them for the purification of the land and 2.9 million for participation in the construction of public institutions.

The project will include 164 units in a 23-story building with a long-term lease for 20 years.

The mix of apartments in the project includes 2, 3 and 4 rooms, 25% of which will be offered for rent to those eligible at a reduced price of 20% off market prices. When in this area a 2-room apartment is rented for about NIS 4,000 per month. 750 sq.m. in the project intended for commercial use, the winner may sell at the end of construction and after occupancy. Shikun VeBinui will be obliged to operate and maintain the project for a period of 20 years through a management company and in accordance with a maintenance specification defined by the apartment. For another 5 years, the rent does not change except for the index link, after 5 years the company can update it by 5%.

This is the project that has yielded the country the highest revenue since its inception in 2014. The highest amount so far received in May 2017, Ashtrom won an apartment tender to rent in the nursery neighborhood when it paid NIS 164 million for a project to build 176 apartments.

The relatively high bid, and the fact that many large players competed in the tender, seem to be a combination of an attractive location in Tel Aviv near Yigal Alon Street, and office towers including Toha Tower, and uncertainty because companies prefer a solid and relatively safe investment even with a relatively low return on entrepreneurial projects. In the last month and a half, at the height of the Corona crisis, four more tenders for an apartment for rent were successfully closed last week. The tender was won by the companies Efi Capital and Shoval Engineering, for whom this is the first project to be set up as part of apartment tenders for rent, before which tenders in Ashkelon, Lod and Beit Shemesh were successfully closed.

The Minister of Construction and Housing, Yaakov Litzman: “We continue to promote rental housing in Tel Aviv as well, as part of our activity to accelerate housing solutions in Israel. Long-term rental is a very important housing option that we can promote in the center and throughout the country.”

CEO of Apartment for Rent, Yair Tal: “The important peace path project that Shikun VeBinui Real Estate will establish will make the option of living in Tel Aviv accessible and provide a quality, stable and safe housing alternative that will facilitate tenants in the city. The project is an example of a long-term rental concept that promotes An apartment for rent in the heart of the main cities in the country, and another large tender will soon be published for the construction of 750 long-term rental units and student dormitories, together with employment and commercial centers in the heart of the stock exchange complex in Ramat Gan. ”

The director of the Israel Land Authority, Adiel Shimron: “This is an important project that an apartment rental company has successfully led. Rental apartments in the heart of demand areas join a series of solutions that the state and RMI provide for the benefit of the homeless and housing developers in Israel. “Rami manages the state’s land from the perception that the land is a national resource that can and should stimulate economic growth, social development and, above all, a response to the housing needs of the citizens of Israel.”



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