Gazit Globe Eyes Afula Power Center

The commercial real estate market is heating up, and many investors, including those renowned for their expertise in overseas investments, are looking for significant new properties here.

Gazit Globe is negotiating the purchase of the new power center (outdoor shopping center) in Afula, Emek Center, Haaretz has learned. The mall is jointly owned by Moshav Merhavia (50 percent), with the other half owned by businessmen Moshe Hadif and Gaby Edri. According to the licensing laws, Moshav Merhavia must continue to own at least 26 percent of the mall, and it seems that Gazit Globe is looking to buy out Edri and Hadif's share.

The value of the power center is estimated at $30 million.

Emek Center opened a few months ago, and contains 20,000 square meters of space. About $21 million was spent on building the mall, which is almost completely full and includes major chains such as Super-Pharm, Castro, Fox, Renuar and Matim Li.

This is not the first time Edri is negotiating the sale of his share of the Afula mall. Real estate market sources say that Edri wants to receive a price reflecting an 8 percent return, while the offers he has received reflect a 10-11 percent return (the return represents the ratio of the annual rents received to the purchase price - the higher the purchase price, the lower the return.)

Edri is also the owner of the Eight Center mall in Kiryat Shmona.

Gazit Globe recently announced it is interested in establishing a group of 7-10 malls in Israel. So far it has bought one, the Rothschild mall in Rishon Lezion, for NIS 185 million. It has also bought a neighborhood shopping center in Tel Aviv as well as land for constructing another one.

Gazit Globe Israel said the company does not comment on such information.

Haaretz has yet to receive a response from Edri.