Fattal Hotel Management Ltd., owned by David Fattal, has signed an agreement with Amot Investments Ltd. (TASE:AMOT) to lease Building C in the Amot Insurance Project at 46-48 Menachem Begin Road in Tel Aviv. Fattal will convert the 9,200-square meter building into a 190-room business hotel under the Leonardo brand at investment of NIS 50 million.
/ Source: Globes
The lease is for 24 years and 11 months. The hotel will occupy one of the three buildings of the Amot Insurance Project, most of which is owned by Amot. A 20-year lease will come into effect when conversion of the building for the purpose of lease is completed. Conversion of the building into a hotel will take one year. Fattal Hotel also obtained an option to extend the lease for four years.
The holding in the property will be transferred to Fattal during the second quarter of 2014, when Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) vacates it. Amot expects an average annual rental income from the lease agreement of NIS 8.7 million, linked to the Consumer Price Index (CPI). Amot estimates the property's total cost, including its share of the conversion of the building into a hotel, at NIS 100 million.
In August 2013, Amot bought the property, including 260 parking spaces and additional spaces, from Clal Insurance for NIS 97 million.
The business hotel will be Fattal Hotel's fifth hotel in greater Tel Aviv, after Herod's, the Leonardo Basel, the Leonardo City Tower in the Ramat Gan Diamond Exchange, and the Leonardo Boutique Hotel in Ramat Hahayal. The four hotels have 820 rooms altogether; the fifth hotel will bring that number to 1,010 rooms.