© Mishorim Real Estate Investments PR
| Investing.com News |
The Mishorim Real Estate Company (TASE:) reported on Thursday that it entered into an agreement for the sale of the “Beit Mishorim” office building on Aryeh Shankar St. in the Kiryat Aryeh industrial area in Petach Tikva for NIS 22 million, 29% above its book price and about 2.1 times higher than the purchase price when The consideration reflects an annual rate of return of approximately 6.2%.
At the same time, the company’s rights in the photovoltaic system installed on the building and towards the electricity company are also sold to the buyer in exchange for NIS 350,000.
Mishor’s stock rose 1.9% on Thursday, after falling by about 47% in the last 12 months and the company’s market value falling to NIS 250 million. We note that Mishorim Company is the controlling owner (50%) of Skyline Company (TASE:) which is engaged in the management of hotels, resorts and profitable real estate in the USA.
Mishori paid 10% of the consideration at the time of signing the agreement, and the remainder of the consideration (90%) will be repaid within 60 days of signing the agreement.
The property was bought by the Mishor company controlled by Alex Schneider, in 2009 at a price of NIS 10.2 million. The land area is 1,063 square meters, on which an office building is built that includes five floors (and a basement floor) and parking spaces, where the annual rent was NIS 1.37 million.
The total built area is 2,285 square meters, including the basement floor and the area for marketing is 1,898 square meters plus 27 parking spaces.
The buyer is an association that currently rents the building, together with a corporation related to it. Until the completion date, the buyer is entitled to a 10% discount on the rent. From the date of completion, no more rent will be paid.
In the company’s financial statements as of September 2022, the property is listed at a value of approximately NIS 17.3 million, so the sale price is approximately 29% higher than its book price.
As the transaction is completed, the company is expected to recognize an accounting profit before tax of approximately NIS 5 million. Completion of the transaction is expected to occur during the first quarter of 2023.
The expected free flow to the company after the completion of the transaction is expected to total the full consideration and minus any transaction expenses and taxes.
Alon Waxman, CEO of Mishor:
“The sale of ‘Beit Mishorim’ is another transaction that brings to light the strategy of Mishorim to locate properties with significant potential, improve them and realize them at a price higher than their book value, something that is not obvious at this time. This transaction is further evidence of the potential inherent in our property portfolio and joins a series of moves We lead them to the realization of assets and we continue to work to improve the asset portfolio and create value for all of our shareholders.”