Sources inform ''Globes'' that Psagot Investment House Ltd. is in talks to invest NIS 250-300 million to acquire 50% in several neighborhood commercial projects that Carasso Real Estate Ltd. will build in the next two years. The investment reflects half the projects' value upon completion and leasing.
Carasso Real Estate, a sister company of Renault and Nissan importer Carasso Motors Ltd. (TASE: CRSO), owns lots zoned for neighborhood commercial centers that it bought in the past few years. They include a lot in Even Yehuda, zoned for a 3,700-square meter commercial center, bought for NIS 19 million and a lot in Yavne, zoned for a 3,600-square meter commercial center, bought for NIS 24 million. The company will also build a 3,000-square meter commercial center in Hadera's Ein Hayam neighborhood, where hundreds of apartments are under construction; and a 5,000-square meter commercial center in Ashdod's Neighborhood 16; and a 4,500-square meter commercial center in Maaleh Adumim's Nofei Hasela neighborhood. The company is also a 50% partner in two residential projects: the Bezalel Market project in Tel Aviv, and a project in the Psagot project Jerusalem's Romema's neighborhood.
Psagot and Carasso Real Estate have a longstanding relationship. In March 2013, Psagot bought the Carasso Tower, which is under construction, in Beersheva for NIS 100 million, and will take delivery upon completion in June. All the building's office space is leased to the Government Housing Administration, under a long-term lease.
In the past two years, Psagot has made a number of investments in income-producing real estate, in order to diversity its portfolio and achieve higher yields. In April 2012, together with a REIT, it bought 40% of Tel Aviv Millennium Tower from Property and Building Ltd. (TASE: PTBL) for NIS 137 million. The building's annual yield from its 15 tenants is 8.3%. A year later, Psagot bought the Gitam Building in Tel Aviv's Ramat Hahayal for NIS 76 million. The property has an annual yield of 8%.
Carasso Real Estate and Psagot declined to comment on the report.
Although insurance companies, led by Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) and Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) are better known investment in income-producing real estate, Psagot and other investment houses have become active in the field. Halman Aldubi Investment House Ltd. and Aspen Group Ltd. (TASE:ASGR) recently bought an office building in Dusseldorf, Germany for NIS 233 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 22, 2014
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