The buildings will be leased back to Deutsche Telekom.
A subsidiary of Direct Capital Investments Ltd. (TASE:DCI) and partners last week bought three office buildings in Frankfurt from Deutsche Telekom (NYSE: DT; XETRA: DTEG) in a buy/lease back deal for NIS 155 million. Deutsche Telekom will lease back the properties in a ten-year lease, with three five-year options. The return on the deal is 8% a year.
Direct Capital will finance 90% of the purchase, excluding expenses, with a loan from Lehman Brothers (NYSE:LEH). Under the terms of the loan, Direct Capital will borrow €24 million for five years at 4.35% interest a year. The interest will be repaid in quarterly installments. Direct Capital will also repay 2% of the principle a year in quarterly installments.
This is Direct Capital’s first deal in Western Europe.
Published by Globes [online], Israel business news - www.globes.co.il - on December 11, 2005