For the second time in two months, real estate company Alony Hetz Properties and Investments (TASE: ALHE) has managed to give the market a nasty surprise with news of huge losses on overseas assets. The company, headed by its main shareholder Nathan Hetz, will write NIS 750 million off the value of assets in the US and the UK. This comes less than two months after the company released its financials for the third quarter of 2022 showing losses from negative asset revaluations.
Alony Hetz has announced that, in preparation for the publication of its 2022 financials, it received indications from the overseas companies through which it holds assets in the US (AH Boston and Carr) and in the UK (Brockton Everlast) that it would post losses on adjustments to the fair value of investment properties amounting to NIS 750 million.
The company says that the revaluation losses mainly stem from the rise in capitalization rates of forecast cash flows from investment properties, of 0.25-0.5%, and from a rise in construction costs.
The revaluation losses reported by Alony Hetz arise from draft appraisals that are incomplete and, according to the company, provide "partial indications only" and may yet change. The company posted revaluation losses of NIS 102 million for the third quarter of 2022.
Alony Hetz’s assets are mostly office buildings. In Israel, it controls Amot (53.8%), which has an extensive portfolio of office buildings around the country. In the UK, through Brockton Everlast (83%), it specializes in constructing advanced medical laboratories. In the US it has two subsidiaries mainly involved in office rentals: Boston AH (55%) and Carr Properties (47%). Alony Hetz also controls (50.4%) renewable energy company Energix, which operates photovoltaic systems and wind farms in Israel, US and Poland.
The value of Alony Hetz’s assets totaled NIS 16.8 billion at the end of the third quarter of 2022.
Published by Globes, Israel business news - en.globes.co.il - on January 18, 2023.
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