Mizrahi Tefahot Bank (TASE:MZTF) today instructed the banks management to prepare to move its head office to Lod from Ramat Gan. The bank was the first major bank to move its headquarters out of Tel Aviv's financial district eight years ago when it moved to eight floors in the Moshe Aviv Tower, Israel's tallest building with 68 floors.
Now Mizrahi Tefahot Bank has sold those eight floors to Sela Real Estate for NIS 268 million. In this deal, the bank will continue renting the offices for eight years. Under the agreement terms, the bank will pay NIS 17 million in annual rent, reflecting a 6.1% return.
Earlier this month, Bank Leumi (TASE: LUMI) reported the sale of its main branch, located in central Tel Aviv, using the same method employed by Mizrahi-Tefahot Bank, in which the property is sold and then rented. Bank Leumi sold its property to Israel Canada ITR) Ltd. (TASE:ISCN), and will pay NIS 500,000 in monthly rent.
Sela Real Estate raised NIS 458 million last week in order to pay for its acquisition. The offering included both bonds and shares: NIS 195 million was raised through shares and NIS 263 million through an extension of its existing B series of bonds. The yield on the bonds is 1.92%, reflecting a spread of 159 points on the seven-year duration.
Sela Real Estate had little trouble raising the money, with demand totaling NIS 500 million for the bonds and NIS 300 million for the shares.
Published by Globes [online], Israel Business News - www.globes-online.com - on June 19, 2017
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