Gindi Holdings said last night that it had halted talks to to sell Tel Aviv's Sarona Market to Azrieli Group Ltd. (TASE: AZRG) because of "commercial and legal differences." Gindi also announced that talks with other potential buyers had been broken off, due to "a decision to continue owning Sarona Market as an income-producing property in the coming years." Gindi Holdings even said that it had decided to develop similar urban market platforms, in other major cities in Israel and abroad.
This has been a totally unexpected development because Gindi Holdings is a company that has to date worked exclusively in residential real estate and not in income-producing real estate, and has previously sold income-yielding real estate that it has owned. In the commercial portion of the Sarona project, the company had planned to realize its assets and sell the market after it was operating but it now seems that the potential sale has been ended. The company only operates in Israeli real estate and has no overseas activities.
Sarona Market CEO Sharon Moman said, "In the past few months there have been major debates between the two alternatives of selling or developing it as a model. After exhausting several negotiations with companies interested in the subject, including advanced talks with Azrieli Group, we decided that the right thing for us is to replicate this successful formula in other places in Israel and abroad."
The Sarona project includes three residential towers with 324 housing units and 8,700-sq.m. of commercial space leased to 90 businesses in the Sharona Market covered area.
Gindi's decision not to sell the market comes amid a spate of complaints by tenants about problems with the project with homeowners saying the market harms their quality of life. Market stall holders also claim that Gindi has not fulfilled all its promises. Gindi rejects all these complaints and insists that any problems that do exist are being dealt with. Other complaints that have been raised, say Gindi, are attempts by tenants and stallholders to claim money that is not due to them.
Published by Globes [online], Israel business news - www.globes-online.com - on December 7, 2015
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