Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) and two partners have bought a property on the Champs Elysee in Paris for €240 million (NIS 1.16 billion), not including transaction costs. The purchase comes just a month after Harel and a partner bought an office building on London's Fleet Street.
The property comprises two buildings, built in 1878, and renovated in 2004-06. The 3,500 square meters of commercial space, 5,100 square meters of office space, and 1,600 square meters of residential space are fully leased in long-term leases.
Harel owns 39% of the property; its partners, New York-based Thor Equities LLC and a third undisclosed company, own the rest, and will manage the property. Harel's direct investment in the purchase is €29 million. The partners' total equity of the purchase is €73 million, and they financed the rest with a bank loan.
Harel's real estate division owns properties worldwide, mostly on the US Eastern Seaboard, the UK, and Germany. At the end of June, more than 3% of the assets of the company's participating life insurance policies came from the fair value of its real estate properties in Israel and overseas.
Real estate investment by Harel and other Israeli insurance companies is based on their attempts to diversify their investments to long-term assets that generate a steady cash flow. The companies are seeking to reduce their current heavy dependence on investments in the capital market.
Published by Globes [online], Israel business news - www.globes-online.com - on October 24, 2013
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