Max Stock Leases New Logistics Center in Ofakim for Over $5 Million Annually

Max Stock, a retail chain, has signed a lease agreement for a new logistics center spanning approximately 45,000 square meters in Ofakim, southern Israel. This facility will serve as an additional logistics hub, complementing the company's existing two centers and external suppliers. The new center is expected to be delivered in December 2028 upon project completion.

The initial lease term is set for 10 years from the delivery date, with automatic extensions for two additional five-year periods, subject to agreed-upon conditions. Rent is expected to increase by 5% at the start of each extension period. Max Stock estimates monthly rent at around 1.7 million shekels, totaling over 20 million shekels annually before VAT and indexation.

In addition to rent, Max Stock plans to invest approximately 20 million shekels to adapt the facility to its needs. The company stated that increased activity and inventory levels necessitate the new center to support expansion, improve flexibility, and optimize distribution costs. The Ofakim center will operate alongside existing facilities in Shomria and Caesarea.

A notable aspect of the deal is that the lessor, GT One Holdings, is partly owned by Uri Max, the CEO and director of Max Stock, who holds a 50% stake. This potential conflict of interest led to the transaction requiring approval from the audit committee and board of directors, who deemed it an unusual transaction due to its scope and potential impact. Max Stock confirmed that comparative data was reviewed, and the terms were found to be reasonable and fair, with the Ofakim location and operational characteristics deemed superior to other options.

Approximately a quarter of the logistics center's area is designated for commercial use, though it can also be used for logistics, with the remainder dedicated to logistics operations. The lessor is responsible for obtaining necessary permits for these uses. GT Real Estate, the lessor, anticipates an annual income of about 21 million shekels from the property, which is already under construction. Gabriel Trablsi, Chairman and owner of GT Real Estate, highlighted the agreement as a testament to their ability to create an attractive product and noted the company's ongoing expansion across Israel.