Skyline International Development Inc., a Canadian joint venture of Mishorim Development Ltd. (TASE:MSHR) and Israel Land Development Company (TASE: ILDC) has sold 135 of the 145 luxury apartments in the King Edward Hotel in Toronto for C$54 million (NIS 197 million). Skyline has orders for the remaining apartments, and expects to close the deals soon.
The apartments are due to be handed to the buyers in 2012. The apartments' development cost is C$30.5 million, and Skyline expects to report a profit of C$17.1 million (NIS 62.3 million). Mishorim's profit will be NIS 10.6 million, which it will record in its financial report for the first quarter of 2012.
Mishorim owns 65.35% of Skyline, and Israel Land, controlled by Ofer Nimrodi, owns the rest. Skyline and its partners bought the King Edward Hotel from Lehman Brothers in March 2010 for C$48 million (NIS 175 million). Skyline paid C$15.7 million from equity and financed the rest with a bank loan. Skyline owns 17% of King Edward Hotel. Its partners include billionaire Alex Schnaider (the former owner of the Maccabi Tel Aviv Football Club), Dundee Corporation (TSX: DC), and the Zuria family.
The 300-room King Edward Hotel in downtown Toronto was built in 1904
Mishorim chairman Gil Blutrich said, "Within three months of taking ownership of the hotel, we sold 12% of its space at a handsome profit. We only began the sales a month ago, and they were scheduled to continue through the end of the year. We were surprised by the strong demand. Hundreds of people who registered with the sales office were left without an apartment to buy."
Skyline intends to continue redevelopment of the King Edward Hotel, 30% of which was empty at the time of the purchase. The company plans to lease commercial space and reopen its historic ballroom, the "Crystal Room", which has been closed for 35 years.
Mishorim's share price rose 9% by mid-afternoon to NIS 8.02 and Israel Land's share price rose 1.2% to NIS 27.10.
Published by Globes [online], Israel business news - www.globes-online.com - on July 6, 2010
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