Azrieli Group Ltd. (TASE: AZRG) has a new concept in its Rishonim tower project in Rishon Lezion. For the first time, the company is offering fully finished offices with 100-300 square meters of space, most of which have been leased to members of the liberal professions. This small units product, built to a finished level, is being constructed by Azrieli for the first time. Demand for the units is strong, and the group is therefore developing an additional area in the tower.
Companies that have rented some of this space include Menorah Mivtachim Holdings Ltd. (TASE: MORA), which rented 350 square meters; Care Health Services (250 square meters); and medical software products company Perigen Solutions (500 meters). The average rent for these deals is NIS 70-75 per fully finished square meter per month, plus parking space for NIS 450-550 per month.
The demand for small offices was shown in another deal by Azrieli with the Dogether company, which operates shared work spaces. Dogether rented 1,600 square meters on the fifth and sixth floor of the tower.
These deals come on top of leases for larger spaces that cumulatively amount to over 21,000 square meters. Companies that have already moved their offices to the tower include Electra Consumer Products Ltd. (TASE:ECP) (6,000 square meters), the headquarters of Yeinot Bittan (3,500 square meters), the Space fitness club (2,400 square meters), Mor Institute (1,200 square meters), and real estate company Grofit (500 square meters). A number of high-tech companies have also recently rented space in the tower, including Controlup, which specializes in IT systems (1,300 square meters), and software company WebTech Innovation (150 square meters).
In March, after three years of petitions to the High Court of Justice, the Ministries of the Interior and Finance approved a revision of the Rishon Lezion municipality's municipal property tax. The municipal property tax rate for high-tech companies will be cut, making the city more attractive to companies. The new rate is NIS 91.28 per square meter per year, compared with NIS 162 per square meter per year in Tel Aviv, for example.
Azrieli has leased 85% of the space in the tower. The leases were signed for periods of 5-15 years with options to extend, and also include parking spaces in the tower's underground parking lot.
The new Azrieli Rishonim project contains a 15-floor tower with 2,300 square meters per floor - a total of 30,000 square meters in gross space. The project also includes a 20,000-square meter shopping mall with an underground parking containing 1,500 parking spaces. The project is located at the intersection of Highways 431 and 412 above the Rishonim railway station and a bus terminal.
Published by Globes [online], Israel Business News - www.globes-online.com - on August 24, 2017
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