Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) and Menorah Mivtachim Holdings Ltd. (TASE: MORA) have bought an office building in Norwich, in Norfolk, England for ₤134.3 million (NIS 834.1 million).
Harel and Menorah bought a 33,500-square meter five-building complex leased to Aviva International Insurance plc (LSE: AV) unit Aviva Central Services UK Ltd. in a 20-year lease. Aviva is Britain's largest insurance company and the fifth largest in the world. Aviva pays ₤11.5 million in annual rent, giving a return on investment of 8%.
Harel and Menorah each acquired 48% of the complex, paying ₤64.5 million each (NIS 400 million). The companies' two UK partners own the remaining 4% of the property.
The complex includes a historic building built in 1901 and four buildings built in the 1970s. The complex was renovated in 2005-07 at cost of over ₤90 million.
The deal is the latest property purchase by Harel, following other deals in the UK and Germany this year.
Harel director of real estate investments Gadi Ben-Haim said, "We believe that real estate prices in some Western European countries provide attractive investment opportunities. That's why we've recently bought several high-quality properties in the region, including two office buildings in central London, and an office complex in Leipzig.
Harel's share price rose 0.5% in morning trading to NIS 186, giving a market cap of NIS 3.8 billion, and Menorah's share price rose 1.2% to NIS 40.91, giving a market cap of NIS 2.56 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on December 10, 2009
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