Delek Real Estate Ltd. (TASE: DLKR), controlled by Yitzhak Tshuva, has sold an office building Zurich, Switzerland, for CHF 114.5 million (NIS 422 million). The property was sold by Delek Global Real Estate plc, which handles Delek Real Estate's properties in Western Europe and Canada.
Delek Real Estate books the property at close to the sale price, and will report a capital loss of CHF 4 million (NIS 15 million), partly because of deferred expenses and transaction costs. The company will use part of the proceeds to repay the outstanding CHF 76 million bank debt on the property. Net cash flow to Delek Global Real Estate on the sale will be CHF 34 million (NIS 125 million).
Delek Global Real Estate bought the property in August 2005. It is leased to Credit Suisse Group AG (NYSE: CS; SWX: CSGN; XETRA: CSGZ). The building's value jumped considerably as a result of Credit Suisse renewing its lease. Credit Suisse renewed the lease for ten years through October 2022. Rent is CHF 6 million (NIS 22.1 million a year), giving a return on investment of 5.2%.
Delek Real Estate's share price was unchanged in morning trading at NIS 1.34, giving a market cap of NIS 406 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 16, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011