REIT Asset Management (Israel) Ltd. (formerly Azorim Properties) CEO Amir Biram and shareholders have expressed their confidence in properties in northern Israel, despite the war and commercial paralysis in the area. The company bought the Nahariya Mmall from private parties on Friday for $20 million. The mall was on the verge of going into receivership because of a NIS 162 million debt.
The Nahariya Mall has 7,500 sq.m. of income producing space on two floors with 60 shops, plus a 3,000-sq.m. third floor in skeleton condition, slated for office space. Rent totals NIS 450,000 a month, at an average of $27 per sq.m. per month, and management fees total NIS 300,000 a month. Most of the mall’s debt is due to credit taken out for construction, which the company could not repay, apparently because of management style and the inability of the owners to agree on providing the necessary capital.
REIT Israel has bought 11 malls in Israel since April 2005, including the Nahariya mall. The company has improved financing costs by securitizing income-producing projects and recycling mortgages, setting new standards in Israel. Last week, the company refinanced its mortgage from Bank Leumi (TASE: LUMI) on Park Azorim in Petah Tikva, and signed a $100 million five-year mortgage with German bank Eurohypo AG(DAX:EHY) at better than those offered by Bank Leumi. REIT Israel also raised NIS 330 million from the public by securitizing the Avnet Mall in Petah Tikva. The 80,000-sq.m. Avnet Mall includes 25,000-sq.m. of commercial space.
Published by Globes [online], Israel business news - www.globes.co.il - on July 23, 2006
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