Huge deal in real estate: the winners will pay NIS 821 million for the construction of residential towers in Kirya in Tel Aviv

A partnership between Canada Israel and Acro Real Estate has won the most expensive land tender ever issued by the Israel Land Authority (ILA) for state-owned land. The tender was for the Kanarit complex in the Kirya area of Tel Aviv. The winning bid submitted by the partnership totaled 821 million shekels (excluding VAT). In return, the companies will receive building rights for two 44-story towers, which will include 330 residential units, as well as office and commercial space. An additional 6.2 million shekels will be required for development costs.

Currently, the Kanarit complex serves as a parking lot within the Kirya. The planned project is part of a broader redevelopment initiative by the ILA, which includes the Sarona project and other plots designed and marketed by the authority. The Kanarit site spans approximately 10 dunams and is located between Kaplan Street to the south, Leonardo da Vinci Street to the west, and the Kirya military base to the north. The approved building plan allows for two residential towers of 44 stories, alongside office and commercial buildings of 8 and 11 stories, all arranged around a central courtyard.

According to the district planner for the ILA, Gili Tesler, the residential mix will include a total of 31,750 square meters of primary living space, comprising 330 apartments—290 for sale at market rates and 40 designated for rental. Among the units, 58 will be small apartments of approximately 63 square meters plus 12 square meters of secure space (Mamad), and 232 will be larger units of about 108 square meters plus 12 square meters of Mamad. The rental units are expected to be four-room apartments of 87 square meters. The commercial space will total 1,250 square meters, and the office space will reach 26,800 square meters.

An appraisal commissioned by the ILA valued the plot at 753 million shekels, with a minimum bid set at 240 million shekels. In addition to Canada Israel and Acro, a buyers’ group organized by Moti Peled under the name “Residential Administration for Israel” submitted the second-highest bid of 801 million shekels. Gindi Holdings, the developer behind the nearby Sarona project, offered 688 million shekels. The lowest bid came from a partnership between Africa Israel and Doron Aviv, who submitted 680 million shekels.

The Sarona tender, held in 2009, closed with a winning bid from Gindi Holdings of 457 million shekels for land rights to build 324 apartments and commercial space. Another branch of the Gindi family, Gindi Investments, purchased two towers in the wholesale market on HaArba’a Street in mid-2014, each containing 297 apartments. They paid 365 million shekels for the first tower and 380 million shekels for the second.

Although the Kanarit complex includes more office and commercial space, the price gap is still significant. Despite the six years since the Sarona tender, real estate experts believe the two companies priced the land very aggressively, even given current market conditions.

Adiel Shmron, acting director of the Israel Land Authority, stated:“The Israel Land Authority, in cooperation with the Tel Aviv–Yafo Municipality, has succeeded in maximizing the optimal rights for land vacated by the Ministry of Defense in the southern Kirya. The revenue from this sale will support continued land marketing for housing under the affordable housing program.”

Source:TheMarker article