Hamburger Evron & Co.

  • 27.10.2014, Leumi lends NIS 1.2b to Entrepreneur Henry Taic, Globes

Leumi and the hotelier signed a deal for financing the “David Promenade Towers” luxury project north of the Opera Tower in Tel Aviv ■ The project includes two 26 floor towers

Sources inform "Globes" that Bank Leumi recently signed an agreement with hotelier Henry Taic for the financing of the David Promenade Towers project that Taic is constructing opposite the Opera Tower, close to Tel Aviv's beachfront.

Under the agreement, Bank Leumi will finance the project to the tune of NIS 1.2 billion, covering the cost of construction and the guarantees to buyers of apartments in it. Taic and Bank Leumi CEO Rakefet Russak-Aminoach celebrated the signing of the agreement with a cake in the shape of the project.

The land on which the project is being built is located on Hayarkon Street between Hayarden Street and Trumpeldor Street. It has been in the Taic family's ownership for decades. The project consists of two 26-floor towers, one a hotel and the other a luxury apartment block. Construction is expected to be complete in 2016.

In June 2013, a 612 square meter apartment on the seventeenth floor of the residential tower, taking up the entire floor, together with four car parking spaces, was sold for NIS 81.4 million.

Taic owns the David Intercontinental Hotel in Tel Aviv, Le Meridien Hotel on the Dead Sea, and the Grand Court Hotel in Jerusalem. He also owns land on the northern section of Hayarkon Street in Tel Aviv, near Independence Park, on which he plans to build a 17-floor hotel.

Taic was represented by Adv. Amalia Meshi and Adv. Michal Sagmon from the law offices of Yigal Arnon & Co., while Bank Leumi was represented by Adv. Assaf Englard and Adv. Michal Mendelson from the law offices of Hamburger Evron & Co.

Bank Leumi confirmed the report.

There were relatively few new construction projects in the recent year, and many entrepreneurs encountered difficulties obtaining credit for projects, while some also opted not to start construction due to uncertainty in the real estate market, fueled among other things due by the Zero VAT plan that resulted in a construction standstill.

Research carried out by Top Capital, a company specializing in financing solutions for real estate entrepreneurs, indicates that banks approve loans at a higher rate toward the end of the year. This trend comes after the banks underwent a significant drop in the volume of new proposed financing deals, and following third quarter conclusions that at this rate they would not meet the annual goals they set.

The research indicates that some banks may fail to meet their goals with respect to the scope of projects to which they intended to sell money within the framework of real estate and infrastructure investments. Hence, the last quarter of the year is critical for the banks to catch up with the annual work plan, as much as possible.

Guy Rozen, a partner in Top Capital, explains: “The banks’ credit departments are required to meet objectives same as any other department in the bank, and if the banks were less enthusiastic about extending credit early in the year, they have no choice but to loosen up in recent months in order to meet the quotas. If the bank fails to meet its objectives, it becomes more anxious to get financing and accompaniment projects by the end of the year. We believe now is a good time to submit projects for approval for bank financing and get good financing terms”.