Subscribe to Print Edition | Wed., December 03, 2008 Kislev 6, 5769 | | Israel Time: 22:37 (EST+7)   Back to Homepage web haaretz.com Haaretz Toolbar Diplomacy Defense Jewish World Opinion National Print Edition Car Rental Books Haaretz Magazine Business Real Estate GA 2008 Travel Week's End Anglo File

Africa Israel reported millions in sales that never materialized By Ranit Nahum-Halevy Tags: Africa Israel, Israel News Africa Israel has reported more than NIS 22 million in deals at a flagship project in Jerusalem, though at least some of the deals had not been finalized. Apparently the company customarily includes non-binding agreements in its sales reports, but neglected to report when several such agreements were canceled. After the company eliminated any mention of the project in question, Hanevi'im Court, from its third-quarter report, the Israel Securities Authority demanded immediate clarifications. The Hanevi'im Court project sits on five dunams of land bordered by Hanevi'im, Heleni Hamalkha and Monbaz streets in the heart of the capital. Africa Israel and a partner acquired the plot of land in January 2006 for $23 million. Advertisement Africa Israel has described the project enthusiastically, in light of its central location and proximity to the Old City. The company initially offered apartments in the project for a minimum of $8,000 per square meter, while asking $15,000 per square meter for its penthouses. But after the company's plan to erect a nine-story apartment complex on the site, with about 100 luxury residential units were approved a year ago, prices for the complex shot up to $10,000 to $20,000 per square meter, and the project was valued at $125 million. Shortly thereafter, the company announced it was negotiating with a group of American Jews who wanted to buy all the apartments. Thus, the project was painted as a pearl of a property and a huge business success for Leviev. That's not a contract Why did the Jerusalem project disappear from the firm's third-quarter financial reports? Apparently it was not by chance. The Jerusalem real estate market began to ebb eight months ago, and it has become increasingly difficult to sell properties there. About a week and a half ago, a rumor emerged in the Jerusalem real estate industry that construction at the project was going to be suspended. TheMarker has learned that Africa Israel has ceased marketing the site, and has begun returning money to buyers. It also learned that due to the dire condition of the luxury apartment market in the capital, the company may elect to build a boutique hotel on the site instead of housing, or possibly something else. A representative of Africa Israel in Jerusalem, Avi Hakimi, says there has been no change, and that the project continues to be marketed as residential. A source close to the company confirmed Hakimi's assertion, but said all the deals reported in the first two quarters had been canceled. The source later clarified that the report had not referred to sales, but to registrations, and as these transactions were "in the pipeline," no contracts had been signed or down payments paid. "Some believe that these registrations should be regarded as sales, with a potential for revenue," the source said to explain the NIS 22 million sales figure. And the company's financial reports do indeed note that sales figures for all projects include "signed requests to buy rights." As a result, the reports do not clearly reveal how many actual contracts have been signed, and what they are worth. Africa's partner Sheinfeld confirms that 12 potential customers have canceled, and five or six buyers who made deposits or paid in full have been offered alternative residences in another joint project on the nearby Harav Kook Street. Sheinfeld explained the partners are seeking to amend the plans to allow some of the apartments to be used as a boutique hotel, and to reduce the size of particularly large, 200- to 300-square-meter apartments. Since the process of acquiring approvals could take months, the partners are redirecting customers to the project at Harav Kook Street. A spokesman for Africa Israel said the company rejects allegations by the press regarding the executive report, and there can be no doubt that it is prepared with exemplary detail and transparency," he said. Bookmark to del.icio.us   A U.S. warning The Indian government faces accusations of intelligence failures after the attacks. Mistaken Identity Peres' handshake with Egypt's Grand Sheik is raising a few eyebrows.

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