Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) announced yesterday that, following negotiations with various concerns for the sale of its land at Mesubim Junction in central Israel, it had received a binding and irrevocable offer to buy the entire property for NIS 550 million, plus VAT. The company is still assessing the offer, and is also considering other possibilities for selling the property or part of it. Bezeq notes that if it decides to accept the offer and reaches a binding agreement to sell the property, it is likely to post a substantial capital gain in its books starting in 2018.
As recently reported in "Globes," Bezeq contacted a number of leading real estate companies in order to solicit bids for buying the land it owns at Mesubim Junction. The land (the Sakiya site) is zoned for 350,000 square meters of offices and parking spaces. The fair value of the rights in the land was appraised last year at NIS 460 million, and its sale is likely to yield Bezeq a capital gain in the hundreds of millions of shekels. Bezeq wants to immediately lease back some of the space to be constructed in the project and move its offices there from the Azrieli Towers in Tel Aviv in a sale and lease-back deal.
Bezeq is currently renting 17 floors in the Triangular Tower in the Azrieli Center, amounting to half of the tower's space (22,400 square meters). The Bezeq-Azrieli Group Ltd. (TASE: AZRG) lease was signed in 1999, and Bezeq has since exercised options to extend it, with the current lease period due to expire at the end of 2020. Since Bezeq is an anchor tenant in the tower, it currently pays a significantly lower rent than the market price.
Published by Globes [online], Israel Business News - www.globes-online.com - on December 7, 2017
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