Sources inform ''Globes'' that Menorah Mivtachim Holdings Ltd. (TASE: MORA) is in talks to buy a London office building for more than ₤120 million (NIS 600-700 million). The building is leased to a well-known tenant under a long-term contract reflecting an annual return on investment of 7.75%.
If Menorah closes the deal, it will probably finance most of the purchase from insurance policies. It might also bring in partners.
Menorah is also considering other real estate deals, although these reviews are still only at the preliminary stage. The company declined to comment on the report.
In contrast to its competitors, Menorah, under chairman Menachem Gurvitz and CEO Ari Kelman, has made few direct investments in real estate, although it does have some experience. Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) and Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) are both heavily involved in real estate markets.
Menorah Mivtachim Real Estate Ltd., acquired two years ago, owns commercial and residential income-producing properties in Germany, Russia, and India. However, the present deal will not be carried out through this company.
Israel's larges insurance companies have increasingly turned to real estate in order to diversify their investments and adapt their assets to long-term commitments for savers. Income-producing real estate generates a regular cash flow for years.
Menorah's share rose 0.1% in early trading today to NIS 43.75.
Published by Globes [online], Israel business news - www.globes-online.com - on October 15, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009