Koor Industries Ltd. (TASE:KOR) is selling its 50% holding in the New York headquarters of HSBC Holding plc (LSE: HSBA; HKSE: 005; NYSE, Paris: HBC) to its partner in the property and sister company Property and Building Ltd. (TASE: PTBL) for $138 million in cash, net of the debt on the building. Both companies are subsidiaries of Nochi Dankner-controlled IDB Holding Corp. Ltd. (TASE:IDBH) unit Discount Investment Corporation (TASE: DISI).
Property and Building also rented 9,800 square meters on 6.5 floors in the building at $7 million a year for 15 years, beginning in the first quarter of 2012, with an option to text the lease by 10 years. The 863,000-square foot three-building complex is at 452Fifth Avenue between 39th and 40th Streets in Manhattan.
Koor and Property and Building bought the property in equal shares in October 2009 in a buy and lease-back deal with HSBC for $353 million. The deal was closed in April 2010. Koor will report a capital gain of $72 million on the sale, a 74% return on investment.
Koor's share price rose 0.3% in morning trading to NIS 48, giving a market cap of NIS 2.27 billion, and Property and Building's share price rose 1.4% to NIS 191.60, giving a market cap of NIS 1.2 billion
Published by Globes [online], Israel business news - www.globes-online.com - on October 30, 2011
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