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Selling “Beit Mishorim” in Petah Tikva for about 22 million NIS – 29% above its book price (about 17.3 million) and about 2.1 times the purchase price of the property 14 years ago. Calculating an annual return, this is 6.2%.
The property was bought by the Mishor company 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, which includes five floors (and a basement floor) and parking spaces. The annual rent was NIS 1.37 million. The built-up area is 2,285 square meters, including the basement floor. 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 date of completion, the buyer will receive a 10% discount on the rent. From the date of completion, no more rent will be paid.
“This is another transaction that reflects Mishor’s strategy to locate properties with significant potential, improve them and realize them at a price higher than their book value, something that is not taken for granted at this time,” says Alon Waxman, CEO of Mishor. Mishor Real Estate Investments is traded on the Leni Stock Exchange. in Tel Aviv.
In addition to the sale of the property on Arie Shankar Street in the Kiryat Arie industrial area in Petah Tikva, the company’s rights to the photovoltaic system installed on the building and to the electricity company are also sold to the buyer for NIS 350,000. 10% of the consideration was paid at the time of signing the agreement, the balance will be paid within 60 days of signing.
In agreement with the financing entities, in light of the increase in the value of the portfolio of all the company’s assets that are subject to a lien, the sold property will be excluded from the lien against the debt and the full consideration received for it, minus taxes, will enter the free flow of the company.
As the transaction is completed, the company is expected to recognize a pre-tax accounting profit 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, said: “The sale of ‘Beit Mishor’ is another transaction that reflects Mishor’s strategy to locate properties with significant potential, improve them and realize them at a price higher than their book value, which is not obvious at this time. This transaction is further evidence of the potential inherent in our asset portfolio and joins a series of moves that we are leading to the realization of assets and we continue to work to improve the asset portfolio and create value for all of our shareholders.”
Mishorim (NYSE: Mishar) is controlled by Alex Schneider. It is traded on the Tel Aviv Real Estate Index. It is also the controlling owner (50%) of Skyline, which operates profitable hotel properties in North America and is also traded in Tel Aviv.
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