Property firms spend millions abroad

Jerusalem Economic Corporation buys properties in France; Dorot buys lots on the US east coast.

fishman 88 (photo credit:)
fishman 88
(photo credit: )
Israeli property companies are keeping up their frenzied pace of investments abroad, disclosing another series of deals to expand their international presence. Jerusalem Economic Corporation, owned by Eliezer Fishman, on Sunday announced an expansion of its activity in France by buying six properties for 10.3 million. The properties, which are being acquired through JEC's wholly owned foreign subsidiary, are logistics centers with a total space of 13,612 sq.m. that are leased under long-term contracts to a major French communications company, whose identity remained undisclosed. Rent was estimated to generate an annual return of 1m, a year. JEC is negotiating with a French bank to finance 85 percent of the deal. "The company considers France as a strategic target for expanding its business. The company has invested 150m. to date, and owns 120,000 sq.m. of offices and logistics centers," said JEC CEO Oded Shamir. The deal follows JEC's 22.5m. acquisition of eight properties with a total space of 62,284 sq.m. in France in December. Meanwhile, Property and Building Corp., a subsidiary of the IDB Development Corp. and BST Enterprise and Construction together will invest 10.8m. in a joint residential project in Romania, which will include 800 housing units. The 27,000 dunam lot located in downtown Bucharest would be owned equally through subsidiaries of the two companies. The project would be financed through a 5m. nonrecourse loan by Banca Romania SA and the remaining 5.8m would come from the company's own equity capital. Property and Building said construction would begin in 2006. Finally, Dorot Properties and Holdings, bought two lots on the east coast of the US for $29 million in cash, credit and stock. Dorot will pay $7m. for a 1,000 dunam lot on Chesapeake Bay, in Virginia, which will be divided into 26 residential units. The company also will pay $22m. for the second lot, a 26 dunam lot located next to the marina of the historical town of Cape Charles, Virginia. The lot includes two golf courses. Dorot plans to build residences, commercial space and hotels on the lot, as well as expand the marina together with local investors. Financial backing for the deal will be provided by the transfer of shares worth $3.5m, which would give the seller the right to appoint two directors to Dorot's board. Dorot also will take a bank loan, secured by a lien on the properties combined with a five-year loan at a 10% annual interest rate from the seller. The deal still awaits approval by Dorot's board of directors and is expected to be completed by the end of April.