Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) is in advanced negotiations for moving its headquarters to a new office project in Petah Tikva, to be constructed by Vitania Ltd. (TASE:VTNA.B1) and Carasso Real Estate, sources inform "Globes." It is believed that the project will contain at least 40,000 square meters of offices and stores in the Em Hamoshavot area. Real estate sources predict that rent will be NIS 45-50 per square meter per month in shell condition. The lease periods are likely to be long - over 20 years (including options). Completion and occupation of the project is expected to take several years.
Vitania reported last month that it had agreed to buy 50% of the ownership rights in a 24,500 square meter area located in the northeastern part of the Kiryat Arie industrial zone in Petah Tikva from Carasso Real Estate for NIS 68.5 million. The parties also signed an agreement to develop the land and construct commercial buildings. SGS Building Company, owned by Ehud Samsonov and Yaron Shemie, who are also among the controlling shareholders in Vitania, will manage construction of the project. According to the urban building plan for the land, 61,000 square meters of main space and 94,000 square meters of service space can be built there.
Vitania, whose market cap is NIS 540 million, develops, builds, and leases real estate in Israel and other countries. In addition to Samsonov, the company chairman, and Shemie, the controlling shareholders include Flying Cargo, Gitam Systems, and Hamama Brothers & Co.
Consolidated headquarters in Petah Tikva
If the parties do sign a long-term lease, it will be a disappointment for Azrieli Group Ltd. (TASE: AZRG), with which Teva also negotiated for a project to be constructed in Petah Tikva. Azrieli last month reported that it had purchased 19 dunam (4.25 acres) of land in the eastern part of the Kiryat Arie industrial zone near another office project that it owned. The value of the deal, which was to have been completed within a month, was NIS 91 million plus VAT.
Azrieli bought the land from real estate tycoon Amos Luzon and Tidhar Group (who posted a NIS 35 million capital gain on the plot, which they bought from Isralom only two years ago). The land includes rights for construction of 53,000 square meters and an underground parking lot.
Teva, which had planned to build a new office complex in Ra'anana, recently sold the land it had acquired in the city to Amdocs Ltd. (Nasdaq: DOX), and now plans to keep its headquarters in Petah Tikva, but in a different location from the present one. The new headquarters will consolidate all the company's headquarter sites in the city, and later also its special R&D activity.
Teva's headquarters are currently located on Basel Street in Petah Tikva, and the company also has activity at several other sites in the city, including in the Daniv Park and the Kodak building. For Teva, selling the lot in Ra'anana only two years after buying it fits in with the company's need to sell assets and reduce expenses in order to service its $35 billion debt. The company yesterday reported that it had completed the sale of its women's health business for the purpose of reducing its bank debt.
Published by Globes [online], Israel Business News - www.globes-online.com - on October 19, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017