Azrieli Group Ltd. (TASE: AZRG) has bought 50% of Netanya's Ir Hayamim mall, which is under construction, from Azorim Investment, Development and Construction Ltd. (TASE: AZRM) for NIS 350 million, and will invest an additional NIS 40 million to complete construction.
Shikun u'Binui Holdings Ltd. (TASE: SKBN) owns the other half of the 70,000-square meter mall, which is scheduled to open in early 2012.
Azrieli said that, as of now, the mall has 24,000 square meter of leasing space, of which 68% has been leased to 100 tenants for NIS 40 million a year. It estimates the net operating income (NOI) of NIS 61 million when the mall is fully leased, of which the company's share is half. It therefore estimates the return on investment at 7.8%
Azrieli currently owns 15 malls nationwide.
Azorim's new controlling shareholder Hershy Friedman said, "This is an important strategic move… that will strengthen its capital base and cash flow. The sale of the mall is another move toward refocusing the company's business on it relative advantages."
Azrieli's share price fell 1% in morning trading to NIS 88.63, giving a market cap of NIS 10.85 billion. Azorim's share price rose 0.4% to NIS 4.90, giving a market cap of NIS 268 million.
Published by Globes [online], Israel business news - www.globes-online.com - on August 16, 2011
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