Israel Railways, ILA to develop commercial centers at country’s train stations

Train stations across country have been grouped according to their potential development size.

An agreement signed on Tuesday between Israel Railways and the Israel Lands Authority (ILA) will enable the development of new commercial centers at train stations around the country.
According to the terms of the agreement, the Israel Railways will be able to commercially develop business and residential areas near and above train stations to various extents, depending on the sizes of the stations. Within the next 10 to 15 years, the signers estimated that Israel Railways will develop about 6 million square meters of real estate with expected annual revenues of NIS 1.5 billion, compared to current revenues of about NIS 400m. Also partaking in Tuesday's agreement were the ministers of transportation, finance and housing.
"The agreement is designed not only to develop Israel Railways," said Transportation Minister Yisrael Katz. "It involves an understanding that the train is not just a tool of mass transportation from distances to and from the Center. Each station holds the potential for active business development in the environment in which it stands."
Constructing office buildings and shopping centers at and around the country's train stations will exploit the great potential of these locations, a well as fulfill employment, entertainment and commercial demands, the signers agreed. In addition, building such facilities will strengthen peripheral areas and make public transportation more attractive to travelers, they said.
The train stations have been grouped according to their potential development size, with small stations defined at 1,500 square meters, medium stations at 3,000 square meters and large stations at 6,000 square meters, the agreement explained. Examples of medium-sized stations are those at Ben Gurion Airport, Beersheba, Haifa Bat Galim, Holon, Petah Tikvah and Rosh Haayin. Examples of large-sized stations are those at Tel Aviv Savidor-Merkaz, Tel Aviv HaShalom, Haifa Merkaz Shmona, Netanya, Bat Yam and the future Jerusalem Binyanei Hauma site.
"Today's agreement brings the future to train stations in Israel," said Finance Minister Yair Lapid. "The connection between transportation and real estate is a classic case of a greater whole than the sum of its parts. This is a connection among transportation infrastructure and economic benefits with increasing potential, which are the product of real estate development."
It is the hope of the agreement signers that the increased income accrued by Israel Railways, the ILA and the relevant local authorities will reduce the company's dependence on government subsidies, as well as allow for continued improvement in passenger service, they said. Israel Railways will need to pay 2% of its total annual revenues from operational services and subsidies, as well as 8% of the income generated by the commercial developments to the ILA, the agreement added.
With increased profits, Israel Railways will be able to better the quality of service available to its customers, company CEO Boaz Tzafrir stressed.
"This will transform the perception of train stations, as they are today, and strengthen the periphery, ease road congestion and contribute to the environment – improving quality of life for us all," Tzafrir said.