Azrieli Group bought the Mount Zion Hotel in Jerusalem for 275 million Israeli shekels as part of its expansion into Israel's hospitality segment.
The 137-room hotel on Hebron Road is built on 13,000 square meters of land with an aggregate built-up area of 11,600 square meters.
The Israeli real estate operator will pay 500 million to 600 million shekels for the hotel's renovation and expansion. It has an approved zoning plan for the property, which features the addition of 22,400 square meters of above-ground area and around 380 underground parking spaces. The plan also allows the company to increase the number of the hotel's rooms to 400.
Azrieli, which intends to continue operating the hotel, will use its own resources and/or bank or institutional financing to fund the transaction.
The deal is subject to the approval of the competition commissioner.
The company is also looking to build two additional new hotels as part of the expansion plan, consisting of an 84-room hotel in the city of Modi'in and a 250-room hotel. The second project is part of the extension of the Azrieli Center in Tel Aviv, which is slated to be completed in 2025.
Azrieli tapped hospitality industry veteran Eli Maor to manage the group's hotel operations. Maor worked at the Sheraton Hotel Eilat under the international Starwood chain, the Alrov Properties' Mamilla Hotel in Jerusalem and Marriott International's The Jaffa Hotel in Tel Aviv.
As of Dec. 9, US$1 was equivalent to 3.47 Israeli shekels.