The insurance company will invest 400 million NIS in the construction of a 40-story office tower in the Dan business center in Bnei Brak. Twenty years ago, a shopping center was established due to a partnership conflict.
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The real estate service of the insurance company ”Migdal Insurance” purchased 75% of the BBC tower in Bnei Brak last week. It is expected to rise at the intersection of Jabotinsky and Ben Gurion streets in the Bnei Brak business district. The tower is expected to reach 40 stories, of which 30 will belong to Migdal.
The tower is expected to reach 40 stories in Bnei Brak
Sources close to the matter estimate that Migdal paid 150 million NIS for the project rights. Additionally, its investment, including construction, will reach 400 million NIS. The offices in the tower will total 57,000 m², of which 43 will be owned by Migdal. The developer is expected to have 375 parking spaces. The lower levels of the project are expected to serve as a shopping center with a built area of 15,000 square meters. However, the agreement does not pertain to this part.
Currently, rental prices in the Bnei Brak area are 65 NIS per square meter.
This will give the tower a return on investment of 8% to 9%. Recent transactions in the commercial area of neighboring towers indicate that the value of offices in the region is 12,000 NIS/m². Meanwhile, the investment cost per m² reflecting the agreement for Migdal is only 9,000 NIS per m². This means that the agreement should benefit from an entrepreneurial margin of 25%.
Near the tramway
Migdal is entering the project at a relatively advanced stage, having already obtained a building permit. Waxman Govrin Geva has recently been chosen to manage the project and will be selected in the coming weeks. According to estimates, construction will be completed within 3 to 4 years. Furthermore, the red line of the tram will operate a year earlier. In addition, one of the stations built next to the tower will have an escalator leading directly to the shopping center.
The main commercial name of the center is the Dan Center, but many know it primarily as “the White Elephant of Bnei Brak.” It was interrupted during its construction, 20 years ago, due to a conflict between partners.
In the past, the 10.4 dunam area was used as a vegetable warehouse by Tnuva. In the 1990s, when Tnuva moved to the wholesale market in Tel Aviv (which has since become a huge real estate project), it sold it to brothers Zion and Yehuda Shaulian, Ezer and Robert Rubinstein, but disagreements quickly erupted between the brothers and the contractors, and the project remained stalled.
