| Purchase of Property in Germany |
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Date:
29/4/2007
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Source:
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Dresdner Bank Building, Frankfurt, Germany.
Please be advised that a wholly-owned foreign subsidiary of Electra Real Estate Ltd. ("the Company") purchased 60% of the rights in a Income-Producing Property in the city of Frankfurt, Germany. The primary details of the transaction are as follows:
• The property purchase price (100%) before expenses is € 200 M (approx. NIS 1.1 B) plus related expenses in the sum of approx. € 17 M (approx. NIS 94 M).
• The property constitutes a luxury modern office building whose construction was completed in 2003, situated in the business center of Frankfurt, Germany. The net area of the property for lease totals approx. 35,500 sq.m. plus about 350 underground parking spaces.
• The building is leased in its entirety to Dresdner Bank, which is one of Germany’s leading banks, belonging to the European financial group Allianz, under a lease agreement up to June 2013, with no termination option. The lessee has an option to extend the lease term by five additional years.
• The net annual rent (100%) amounts to approximately € 14 M (approximately NIS 77.4 M). The rent carries a rent increase mechanism in accordance with the consumer price index in Germany. All ongoing management and maintenance expenses pertaining to the property are paid by the lessee.
• An overseas financial institute provided a loan to finance the transaction (100%) in the sum of € 193.5 M (approx. NIS 1.07 B), bearing a fixed interest at a rate of 5.43% for a term of 7 years. Of this sum, Euro 5.0 M (approx. NIS 27.6 M) is placed in deposit to be released upon the fulfillment of certain conditions. The loan is secured by a first fixed charge on the property and receipts from the property which are non-recourse to the Company.
• Another overseas financial institute provided an additional loan to finance the transaction (100%) in the sum of approx. € 11.8 M (approx. NIS 65 M), bearing a floating interest at a rate of Libor + 2% for a term of 7 years plus an exit charge. The sum of which depends on the profit generated in the project upon the sale thereof in the future. The loan is secured by a second fixed charge on the property and receipts from the property which are non-recourse to the Company.
• The total equity required for the transaction is approx. € 16.7 M (approx. NIS 92.3 M), and the foreign subsidiary’s share (60%) is approx. € 10 M (approx. NIS 55.4 M).
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| Dresdner Bank, Frankfurt, Germany. |
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