Herzliya's Arena Mall to Be Demolished and Rebuilt as Open-Air Complex

The Arena Mall in Herzliya, which opened 23 years ago with an investment of approximately $153 million, is set to be dismantled and transformed into a new complex. The original enclosed structure, designed with Venetian-inspired interiors, will be replaced by seven independent buildings with open walkways, restaurants, leisure facilities, and rooftop areas overlooking the marina and sea. The new project is expected to cost around 200 million shekels.

Opened in June 2003 by Moti Zisser, the mall aimed to be a luxury destination but struggled from the outset. Its enclosed design, despite its prime waterfront location, failed to connect visitors with the sea. Accessibility issues, including paid parking and the building's layout, further hampered its success. Zisser sold the mall in 2007 for 546 million shekels to a group led by Jackie Ben Zaken and Avraham Nanikashvili, who invested an additional 60-70 million shekels in renovations, including a skylight and rebranding as 'Fashion Arena.'

Despite these efforts, the mall continued to face challenges. By 2015, occupancy was around 82%, revenues dropped by 16% to approximately 40 million shekels, and average rents decreased. In 2016, a consortium led by Reality Fund acquired the mall for 335 million shekels, a significant drop from its previous sale price. This ownership group began exploring alternative uses beyond a traditional fashion mall, considering offices, medical facilities, hospitality, and senior living.

The new plan, approved for demolition starting in October, will divide the 31,000 square meter site into seven two-story buildings. The complex will feature anchor tenants, hotels, restaurants, cultural and leisure spaces, and wellness facilities. The project aims to leverage the waterfront location, integrating the complex with the marina, which is also undergoing a 100 million shekel renovation by the Herzliya municipality. This shift reflects a broader trend in the retail market towards open-air centers with mixed-use developments, exemplified by the nearby Big Fashion Galiloot complex.