The Israel Post Corporation is pulling out of several high-priced pieces of real estate in Yerushalayim and Tel Aviv where it currently operates – and is moving operations to a new logistics center in Modi’in, TheMarker reported. The Corporation will rent a large space of some 30,000 square meters in a long-term 15-year lease, valued at NIS 130 to 150 million, the report said.
Currently, the Corporation’s operations are divided between several locations in areas of Tel Aviv and Yerushalayim that are gentrifying – meaning that the buildings owned by the Corporation will fetch high prices when they are put up for sale. Corporation executives also feel that by locating all their operations in one place they will be able to operate more efficiently.
Like postal services around the world, the Israel Postal Corporation also faces significant challenges from email and other electronic message distribution services, which have badly hurt the letter business; the Corporation’s income from letters falls some 6 percent to 8 percent a year. However, those losses are more than made up for by the increased traffic in packages, due to the rise in Internet shopping. Income actually rose in the second quarter of 2017 by 1 percent over a year earlier, TheMarker report said.