Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) has bought an office building in Birmingham, UK, for £32.2 million (NIS 200 million). The company said that the 80,000-square foot (7,500-square meter) Class A property is located next to City Hall, at 115 Colmore Row, Birmingham's most prestigious street.
The building is leased to the Eversheds LLP law firm in a lease with 11 years still to run, with no early exit clause. The net operating return (NOI) on the building is £2.2 million a year, for a gross annual return on investment of 7%. Clal Insurance says that the current rent reflects a price of £25.20 per square foot per year, but that the property has improvement potential, as prevailing rents in the area are £28.50 per square foot per year.
Clal Insurance VP real estate operations Amir Schostak said that the purchase improves the company's foreign real estate portfolio, with the goal of diversifying the company's assets.
An investigation of Clal Insurance's real estate portfolio found that 76% of the properties are in Israel, and most of the rest are in London.
Clal Insurance is a subsidiary of Nochi Dankner-controlled IDB Holding Corp. Ltd. (TASE:IDBH). Clal Insurance's share price rose 2.4% by mid-afternoon today to NIS 38.60, giving a market cap of NIS 2.1 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on July 1, 2012
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