After the dispute with the municipality regarding the amount of the property tax, the Israeli franchisee of the Swedish furniture giant signed an agreement today (Wednesday) to purchase half of the shares of the Abu-owned Ashdod Holding Company, which owns the land – for NIS 192 million. Tzachi Abu’s Ari Real Estate Group is expected to register a profit of NIS 130-140 million before tax deduction
The land deal for the construction of an IKEA complex in Ashdod was signed today at a good time – as published by Golan Hazani, “Khalkalsit” reporter. This actually put an end to the saga surrounding the issue, after, as I remember, disputes arose with the municipality regarding the amount of the property tax that the company would pay for the operation of the branch in the city.
As mentioned, the giant deal was signed between Ari Realden, controlled by the Ashdod businessman Tzachi Abu, together with Iron Realden and together with Moshav Sde Uzia, and Keren JTLV and a company from the Bronfman Fisher group that owns IKEA.
For NIS 192 million, the buyers will receive half of the shares of the Ashdod Holdings Company that owns the land – which actually means that everyone together – both the sellers and the buyers – will be partners in the company and will enjoy its future fruits in the future as well.
We wrote extensively about the ingenious business move of Abu and his Barry Real Estate partner, Jacky Ben Zaken, back in April when the company reported that it had signed a memorandum of intent to sell half of the shares of “Ashdod Holders” to the fund JTLV and to the Bronfman Fisher Group, an IKEA franchisee in Israel, for NIS 226 million.
As part of the transaction, Ari Real Estate is expected to register a pre-tax profit of NIS 130-140 million. According to “Khalkalsit”, the difference between the amount of the transaction at that time and the amount signed today in the agreement will be used as repayment of the owner’s loan that Abu and his partners gave to the Ashdod Holding Company. The buyers will receive a seller loan of NIS 56.5 million for the purchase.
Ashdod Holdings is the controlling owner (72%) of the company that owns land with a total area of approximately 110 dunams, designated for trade and employment, near the southern entrance to Ashdod, near the train station in the city. The remainder of the rights in the complex, on which construction rights of approximately 180,000 square meters are held, is held by Moshav Sde Uziahu. The value of the land in the transaction is NIS 450 million.
In the memorandum of intent it was determined that an area of 30 dunams out of the 110 dunams in the complex will be used as a store of the IKEA furniture chain, the chain’s seventh store in Israel, subject to receiving all the necessary approvals.