Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY.PK) and a partner have signed an MOU to buy a 47-storey Bangkok residential high-rise for NIS 209 million 1.7 billion Baht). Africa-Israel will own 75% of the property and its partner will own 25%.
Construction of the building began ten years ago, but was halted during Thailand’s economic crisis. Africa-Israel plans to complete the building and sell the apartments, which will cover an aggregate space of 67,500 sq.m. on 44 floors, and the 4,000 sq.m. of commercial space on three floors.
UBS has raised its target price for Africa-Israel from NIS 368 to NIS 600 per share, although it kept its “Neutral 2” recommendation. UBS cited the successful IPO of AFI Development plc (LSE:AFID), which accounts for 62.4% of Africa-Israel’s net asset value (NAV), and notes that every 1% change in AFI Development causes a 0.7% change in Africa-Israel.
UBS says, “Triggers for further upside could come from an IPO of Eastern European assets, expected in the second half 2007, an IPO of US assets, which is not currently on agenda in our view, but could occur in future, and a step-up in future deal flow, as seen by two large US transactions recently. As such, Africa-Israel shares remain difficult to value and are clearly sensitive to Russian real estate risk and Russian real estate values.”
Published by Globes [online], Israel business news - www.globes.co.il - on May 6, 2007
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