Aspen Group Ltd. (TASE:ASGR) and Shlomo Insurance Company Ltd. have jointly bought a 19,854-square meter office building in Stuttgart for €35.8 million (NIS 170 million), including transaction costs. Aspen owns 70% of the partnership and Shlomo Insurance, a unit of S. Shlomo Holdings Ltd. (TASE:SHLD), owns 30%.
The building is leased to the Baden-Wurttemberg state government in a 12-year lease, with no exit option. Rent is €2.5 million (NIS 12 million) a year, linked to the German Consumer Price Index (CPI), giving an average return on investment of 7%.
Aspen and Shlomo Insurance have a letter of commitment from a German bank for a €24 million (NIS 114 million) five-year loan with 2.65% fixed annual interest rate and 1% amortization rate, to finance the purchase. The companies financed the remaining €11.8 million (NIS 56 million) of the purchase from independent resources, of which Aspen's share is NIS 39 million, and Shlomo Insurance's share is NIS 17 million.
"In the past month, Aspen Group has signed three deals in Germany worth NIS 500 million," said Aspen Group CEO Ilan Gifman. "The emphasis in all the agreements is long-term leases with tier-1 tenants, while exploiting opportunities for obtaining optimal finance. When closed, these deals will guarantee Aspen and its partners stable long-term cash flow."
Published by Globes [online], Israel business news - www.globes-online.com - on January 19, 2014
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