A group headed by Efraim Shurka of the US and Yair Rabinovitch CPA bought half of the Rehovot Mall from Nitsba Holdings (TASE:NTBA) on Friday for NIS 215 million. Shurka will invest most of the money, and will own 55% of the group that bought the mall. Rabinovitch will own 45%, mainly because he was responsible for the deal.
Nitsba acquired 16.7% of the Rehovot Mall from Dankner Investments (TASE:DKNR) for NIS 60 million a year ago. The present sale was made because of the substantial increase in the mall's value over the past year. Nitsba will post a pretax capital gain of NIS 46.5 million, and a post-tax capital gain of NIS 31.5 million, on the sale.
Amot Investments and its subsidiary Eilot own the other half of the mall, and have first refusal rights to Nitsba's stake. The deal with the Shurka-Rabinovitch group will take effect only if Amot decides not to exercise its option. A source close to deal believes that that is almost certainly what will happen.
The contract stipulates that the Shurka-Rabinovitch group may defer paying NIS 175 million until February 15, 2005, in order to arrange bank financing. It will pay 10% annual interest on the deferred payment..
Shurka, an Israeli emigrant, resides on Long Island. He has lived in the US for 30 years, working in the real estate and fuel distribution businesses. Three years ago, he decided to exploit the slump in Israel's real estate to buy properties at bargain prices. He established relations with a group headed by Rabinovitch, jointly purchasing a number of properties. The purchases include a housing block leased to new immigrants through the Ministry of Immigrant Absorption, and supermarkets. This is the group's largest investment to date.
The 27,000-sq.m. Rehovot Mall is fully occupied. It is considered one of the most successful and profitable malls in Israel. The mall's owners earn a return of 10% on their investment from medium and long-term rental leases.
Published by Globes [online], Israel business news - www.globes.co.il - on December 26, 2004