Creo (formerly Scitex) may call off the planned deal to rent anew location in Petah Tikva, Israel. Instead of moving, the company will stay and expand them.

Creo’s management apparently decided to stay in its present buildings on HaMada St. in Herzliya Pituah. Creo will repair the buildings, pull down a one-story building and put up a 7,000-9,000 sq. m. building in its place.

Creo’s lease is due to expire in May 2003. The company now pays a rent of $13 per sq.m. After the repairs are completed and a new building is put up, Creo will probably pay close to $15 per sq.m. per month.

Creo to remain in Herzliya Pituah

 

Elazar Levin

08.04.2002 18:55

Leading high-tech company Creo Products (Nasdaq: CREO) (formerly Scitex) may call off the planned deal to rent 23,000 sq.m. in Petah Tikva from SGS-Shemen Industries. Instead of moving, the company will stay on in its present buildings in Herzliya Pituah and expand them. One of the reasons for the change is Creo managers’ decision to refrain from new high-risk investments in the present economic situation.

 

As reported by “Globes”, Creo has long been negotiating to rent 23,000 sq.m. in Petah Tikva, or, alternatively, rent a similar space from Delek Real Estate in Kfar Neter. The rent was supposed to be $15 per sq.m., index-linked, in a long-term lease. The contract’s financial value over this period was $40 million, making it into one of the biggest deals in the high-tech real estate market.

 

However, Creo’s management apparently decided recently to stay in its present buildings on HaMada St. in Herzliya Pituah, where it rents 16,000 sq.m. from Bayside. Creo will repair the buildings, pull down a one-story building and put up a 7,000-9,000 sq. m. building in its place.

 

Creo’s lease is due to expire in May 2003. The company now pays a rend of $13 per sq.m. After the repairs are completed and a new building is put up, Creo will probably pay close to $15 per sq.m. per month.

 

As far as is known, Creo’s main consideration is that in the current period of economic uncertainty, and continuing terror liable to cause problems in manufacture and marketing of its products, it ought not to undertake the large investment involved in moving from Herzliya to Petah Tikva.

 

Creo’s spokesperson said in response that the company’s management was looking into the option of staying on in Herzliya, rather than moving to Petah Tikva or elsewhere. She said the option had already existed in the past, and that no decision had been taken yet. The spokesperson added: “The Herzliya location is superb, and the municipality promised to help.” She said that the decision would be guided only by economic considerations bearing on the company’s activity.

 

Sources familiar with the deal and with the negotiations today confirmed the report to “Globes”.

 

Published by Israel’s Business Arena on 8 April, 2002