Ashtrom Properties Ltd. (TASE:ASPR) and Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) have bought an office complex in downtown Leipzig, Germany from Deutsche Telekom AG (NYSE: DT; XETRA: DTEG) in a buy and lease-back deal for €29 million (about NIS 164 million).
A Deutsche Telekom subsidiary occupies 96% of the 36,500-square meter three-building complex, and stores rent the rest. Annual rent totals €2.38 million a year, giving a return on investment of 8.8%. Deutsche Telekom's lease runs through the end of 2018, and has four five-year options to extend.
The companies will set up a joint venture to buy the complex. Ashtrom will own 51% of it and Harel will own 49%. The companies took out a €21.8 million non-recourse five-year loan at 4.6% annual interest, covering 80% of the purchase price.
Ashtrom and Harel used to be partners in Har-Ash Ltd., which owns the Orbotech Ltd. (Nasdaq: ORBK) building in Yavne. In October 2008, Ashtrom sold its 50% stake in Har-Ash to Harel for NIS 66.2 million.
Ashtrom Properties' share rose 4.7% by early afternoon and Harel's share rose 0.6%.
Published by Globes [online], Israel business news - www.globes-online.com - on November 29, 2009
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