Property & Building offered $950m for NY HSBC building

HSBC building New York
HSBC building New York

Selling the Manhattan building would inject desperately needed liquidity into the IDB group, but meanwhile it prefers to retain control.

US real estate companies continue to cast eyes on the HSBC office building in New York owned by IDB group company Property and Building Ltd. (TASE: PTBL). Sources inform "Globes" that, last week, George Comfort & Sons offered to buy the building for $950 million (NIS 3.7 billion), and even said it would agree to deposit $10 million to demonstrate the seriousness of the offer. The IDB group, however, sees the office building as an important asset, and for the time being prefers to continue in ownership. The IDB group is controlled by Eduardo Elsztain.

The HSBC tower is at 452 5th Avenue in Manhattan. It comprises two adjacent buildings, one 12 floors and the other 29 floors, with a total built area of 80,000 square meters. The asset is entirely leased to high quality tenants, such as HSBC and law firm Baker & McKenzie.

In April 2010, the IDB group bought the building from HSBC through group units Koor and Property and Building, in equal shares, for $330 million. Eighteen months later, Property and Building bought Koor's 50% share at a valuation of $480 million. Since then, along with the general recovery in real estate prices in New York, the tower's valuation has continued to climb and generate on-paper capital gains for Property and Building. In the company's financial statements for the third quarter of 2015, the building was valued at $820 million, more than double the weighted valuation at which it was bought.

In its third quarter report, released the day the offer was received from George Comfort & Sons, Property and Building stated that it had from time to time received approaches from parties interested in purchasing the office tower, and that it had examined the offers, but had meanwhile rejected all of them. The report further states that Property and Building intends to examine the possibility of selling up to 49% of its rights in the asset, so that it will continue to retain control.

Property and Building has shareholders' equity of NIS 1.7 billion. Selling the HSBC building at the offered price would boost its shareholders' capital by some NIS 500 million and give it tremendous liquidity. This would enable it both to reduce its net debt, which currently stands at NIS 3.3 billion, and to pay a substantial dividend to its shareholders, headed by parent company Discount Investment, which is crying out for cash to service its debt.

Published by Globes [online], Israel business news - www.globes-online.com - on November

HSBC building New York
HSBC building New York
Inflation  credit: Tali Bogdanovsky Unexpectedly low February CPI reading cuts inflation

While inflation in Israel in the 12 months to the end of February 2025 is lower than forecast, housing prices continue to rise.

Bavli Park penthouse credit: Eyal Tagar Tel Aviv Park Bavli penthouse sells for NIS 43m

A 44th floor penthouse in one of the two towers in businessman Yitzhak Tshuva's Park Bavli project has been bought by an Israeli businessperson.

Tel Aviv credit: Shutterstock Supply of unsold new homes hits record

Israel's real estate market is sliding into recession with 78,000 unsold new apartments in January, the Central Bureau of Statistics reports.

Real estate agencies illustration: Tali Bogdanovsky credit: Eyal Izhar Too many agents and too few housing deals in Tel Aviv

There were 2,270 second-hand homes sold in Tel Aviv last year, while the city has 2,566 registered realtors, "Globes" finds.

Ramat Hasharon house in Ankor Street credit: Leanna Rose Ramat Hasharon house sells for NIS 12.4m

The 240 square meter, five-room semi-detached house on two floors is on a 430 square meter lot in the Neve Rom neighborhood.

Israeli apartments Credit: Shutterstock Apartments sold and rented

A selection of recent real estate deals in Israel in Ramat Gan, Holon, Modi'in Illit, Rehovot, Akko and Ashkelon.

BIG Glilot office tower credit: Dror Marmor 63% of BIG Glilot office tower already leased

The 44-floor office tower above the shopping center is charging lower rents than Tel Aviv but higher than Herzliya.

Tel Aviv light rail credit: Yossi Cohen Proximity to Tel Aviv Red Line pushes up housing prices

A study commissioned by NTA has found that real estate along the Red Line has risen well above the overall average rise in prices.

Eilat house near the sea credit: Amram Avraham Investor buys Eilat house near sea for NIS 5.8m

A six-room, 164 square meter house with a 362 square meter yard was sold recently to an Israeli from the center of the country.

Building work on Sarona Hotel credit: Shutterstock Work moves slowly ahead on one of Israel's biggest hotels

After years of delays, construction work resumed several months ago on the 800-room, 47-floor Sarona Hotel in Tel Aviv.

Wiz Sarona offices inset Assaf Rappaport credit: Wiz Omer Hacohen Wiz leases five floors in renovated Sarona building

Exclusive: The Israeli cloud security company is leasing 5,500 square meters of space in a preserved Tel Aviv Templar building.

Israeli apartments Credit: Shutterstock Apartments sold and rented

A selection of recent real estate deals in Israel in Jerusalem, Ma'aleh Adumim, Hod Hasharon, Zikron Yaakov, Kiryat Bialik, and Beersheva.

Tel Aviv credit: Shutterstock Tel Aviv master plan sees 600,000 residents by 2035

The Tel Aviv District Planning and Building Committee has approved for deposit the TA/5500 master plan for Tel Aviv-Yafo.

BIG Fashion Glilot credit: Dror Marmor Israel's biggest mall opens Thursday

BIG Fashion Glilot strip mall is in Ramat Hasharon's new office park, adjacent to Cinema City Glilot.

Tel Aviv credit: Shutterstock New Tel Aviv master plan massively boosts building rights

The plan, set to be approved for deposit, adds 11.3 million square meters of housing, 6.1 million square meters of office space and allows construction of 80-floor buildings in certain places.

Israeli apartments Credit: Shutterstock Apartments sold and rented

A selection of recent real estate deals in Israel in Kfar Saba, Even Yehuda, Rishon Lezion, Hadera, Haifa and Tzfat.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018