Plan for new mall in Jerusalem could shake up local shopping market

Jerusalem may be on its way to getting a new mall. Melisron, one of the country’s largest developers of shopping malls, has requested permission to build its first in the capital, on a vacant plot near the Armon Hanatziv promenade.

If approved, the move could spark increased competition between the city’s most successful shopping centers, including those in Malha and Ramot and the Hadar Mall in Talpiot.

In July, Melisron acquired 75 percent of the ownership rights to the 29-dunam (7.2-acre) plot of land, for NIS 247.5 million ($83 million), according to the company’s latest quarterly earnings report.

The land is currently zoned for residential and hotel use only, but Melisron has requested permission to include a shopping center in the development. The purchase stipulated an additional NIS 120 million ($40.2 million) payment if a new zoning plan is approved that would designate it a mixed-use complex that can include commercial space, as well as recreation and leisure facilities.

Melisron has presented the plan to the Jerusalem municipality, which is broadly in favor of it.

“In principle, the initiative is being looked at in a positive light,” a city spokesperson said in a statement to The Times of Israel. “However, it requires further planning review and assessment in accordance with the relevant planning considerations.”

Currently planned at around 35,000 square meters (377,000 square feet), the mall would become the city’s second-largest shopping center, somewhat smaller than Malha Mall’s space of more than 40,000 square meters (430,000 square feet). It is unclear when the plan could be approved or construction begun.

Opening a new shopping center in Jerusalem would be a big win for the Ofer family’s Melisron, which has malls in most big cities around the country. Its 18 malls include locations in nearby Mevaseret Zion and Maale Adumim, but it hasn’t succeeded in developing a presence in the capital until now.

The company, which has a market capitalization of NIS 19.4 billion ($6.5 billion) on the Tel Aviv Stock Exchange, also owns six high-tech parks and numerous residential properties, according to its latest filing.

While shopping malls have been in a state of decline in much of the world, the industry is strong in Israel, with high foot traffic and near-capacity occupancy rates.

Malha Mall, owned by Azrieli, is one of the country’s most valuable malls, with a valuation of some NIS 2.7 billion ($9.05 million). That places it third in the country, after Melisron’s Ofer Mall in Ramat Aviv (NIS 3.2 billion, or $1.07 billion) and Ofer Hakiryon mall in Haifa (NIS 3.1 billion, or $1.03 billion), according to the Globes business daily.