Ayalon continues to buy real estate: Acquires 85% of Granit House in Petach Tikva and an adjacent plot of land for ILS 51.5 millionThe company notes that “this is the second large real-estate transaction since Ayalon Holdings’ public offering” • The deal comes with days of the company’s report that it had moved from a loss over the first three quarters and in the third quarter of last year, to a total profit of ILS 48.4 million and ILS 19.7 million in the corresponding periods in 2018, respectively
03.12.2018 | Ron Stein
Insurance group Ayalon Holdings, headed by Chairman Shlomo Grofman, continues to develop its own income-producing real estate portfolio. The company announced today that it is acquiring 85.5% of Granit House in Kiryat Aryeh in Petah Tikva as well as the adjacent plot of land, which has additional building rights, for ILS 51.5 million.
The company notes that “this is the second large real-estate deal since Ayalon Holdings’ public offering”. The deal comes shortly after the company’s recent report that it had moved from a loss over the first three quarters and in the third quarter of last year, to a total profit of ILS 48.4 million and ILS 19.7 million in the corresponding periods in 2018, respectively, concurrent with an increase in premiums during these periods.
Chairman Grofman, who leads on the real estate deals and who, among other things, heads Faire Fund, an American-Israeli investment fund active in residential complex development in Israel, said: “We are implementing the company’s strategy and the promises to investors” and “We shall continue in 2019 to strengthen these strategic lines of action as well as an arm active in non-bank credit.
Ayalon purchased the rights in the building from Mishkenot M.A. The building and the lot are located at the intersection of Granit-Ambar, near the Petach Tikva-Kiryat Aryeh railway station. Ayalon further informs that the building comprises six above-ground stories, most of which are leased to offices and high-tech companies and two underground stories used for parking. The transaction includes the area of the lot adjacent to the building, on which there are valid rights to build a structure similar to Granit House.
The rights sold to Ayalon do not include the leasing rights to one floor in the building, which is owned by Consist Jerusalem Computer Investment and Solutions. In any case, the total area of the building is approximately 7,000 sqm: The footprint of each story from the entrance level to the third story is 650 sqm, while stories 6-8 cover approximately 850 sqm each. The car park area extends over 2,758 sqm.
The company expects the building to produce an annual yield that may reach 7% starting in the second year. Ayalon Holdings was represented in the deal by Adv. Dor Shacham and Adv. Oshri Yamin of law firm Hamburger Evron & Co.
A few months ago, Ayalon Holdings acquired 80| percent of the rights in South Africa House which is located at the corner of Menachem Begin Street and HaRakon Street in the Diamond Exchange compound in Ramat Gan for ILS 45.5 million, reflecting a building value of approximately ILS 57 million.
Ayalon Holdings is traded at a value of approximately ILS 455 million after shedding about 30% since the beginning of the year, partly because earlier in the year it had issued shares at a discount on the market and raised bonds – both moves for purpose of the mentioned expansion, and for conducting deals of the kind announced today.