In huge deal Patrick Drahi buys Tel Aviv Mandarin Oriental

Global businessman Patrick Drahi bought Tel Aviv’s luxury seafront Mandarin Oriental project on Yarkon Street last year, Globes has learned, in a huge deal valued at nearly NIS 900 million.

The two 25-storey buildings are also known locally as the Dolphinarium Towers. One of the two towers will be a 227-room hotel managed by the exclusive Mandarin Oriental hotel chain, while the second tower will contain 230 apartments ranging in size from 75-300 square metres. The project also includes a commercial space on the ground floor with an area of ​​1,000 square meters and a public building for marine activities with an area of ​​1,200 square meters.

Drahi, Moroccan-born, grew up in France, lives in Switzerland and holds Israeli citizenship. He owns Hot Communications through the international communications company Altice, which he founded. In 2019, Drahi bought Sotheby’s for $3.7 billion, and in Israel he owns the international news television channel i24.

Many apartments in the project have already been sold over the years, with prices reaching NIS 100,000 and more per square meter due to its attractive waterfront location. According to deals reported on the Israel Tax Authority website, the last deal concluded was for a three-bedroom apartment of 118 square meters on the 24th floor, which was sold for NIS 21.46 million. In May 2024, an apartment on the fourth floor of 79 square meters was sold for NIS 8.2 million, and in December 2023, an apartment on the 24th floor of 245 square meters was sold for NIS 41.7 million.

An estimated NIS 1 billion has been invested in the project by the developers, with Israel Discount Bank and Harel providing NIS 700 million in financing. The improvement fees alone for project approval amounted to 370 million shekels.

A deal to exchange the land on which the dolphinarium was demolished

This is a famous project in the real estate sector in Israel, created as a result of a land exchange deal for the purpose of demolishing the Dolphinarium building. As part of this, the old dolphinarium building, which was located on the beach promenade, was demolished, and the land was returned to the Tel Aviv-Jaffa municipality, to be integrated into the waterfront promenade. Opposite the land, a slightly inland area has been allocated between Hircon and Herbert Samuel Streets, on which the project is currently being built.

The project was sold to Drahi by its developer, Seagate Real Estate, whose investors, as Globes previously reported, include Shmuel Harlap, the Bronfman family, Sir Ronald Cohen, Jonathan Culber and Zvi Barak. Seagate bought the land in 2015 from businessman Yosef Buchman for 200 million shekels. The dolphinarium complex was owned by Buchmann, who bought it for $5 million in the late 1980s before running into difficulties.

Last year, Globes reported that Drahi was in the process of purchasing a building in Tel Aviv from Maccabi Tel Aviv basketball team president Shimon Mizrahi for NIS 110 million. In 2022, Drahi sold the Rav Kook complex in Neve Zedek for NIS 200 million, seven years after purchasing it for NIS 133 million from a foreign company.

It was recently reported that Drahi’s communications company Altice sold its video monetization company Teads to Israeli media content recommendations company Outbrain for $1 billion. Altice is seeking to reduce its tens of billions of dollars in debt, causing its market value to shrink by 66%.

Published by Globes, Israel Business News – en.globes.co.il – on October 8, 2024.

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