The Agreement applies to 19 real estate projects promoted by the ILDC, including 13 urban renewal projects amounting to 21,500 units.
The scope of construction is estimated at approximately $ 3.7 billion. The first two projects which the Chinese Company may carry out and finance are- the biggest nursing home in Israel and an office building of 60 stories, both in Bnei Brak.
Ofer Nimrodi, CEO of ILDC: "We are proud of signing the Agreement with the Chinese Company, which is a huge governmental corporation of magnitude that is not recognized in Israel. Together with the Chinese Company, we intend to accelerate the development of our projects. The Agreement has a strategic and historic significance for ILDC, since the Chinese Company brings technology and high quality performance, which will allow us to build projects and thousands of apartments at competitive costs. In addition, the Chinese Company will finance us with favorable terms the various projects. The cooperation with the Chinese Company will allow us to execute our plans of development our business in the field of Urban Renewal in the coming years, into which we intend to enter in full force under the brand "New Israel Land Development".
ILDC Group announced today that it has signed a significant cooperation with leading Chinese major Company. The agreement signed with the Chinese Company, which is owned by the Chinese Government, is referring to the construction and financing of 19 potential projects in real estate while the scope of construction for is estimated at approximately $ 3.7 billion. 6 of the projects are owned by the Company and the rest are future projects in the fields of urban renewal at a scope of approximately 21,500 housing units, which are in various stages of progress, and are subject to approval the local residents and authorities. ILDC added that the parties would consider forming a partnership (joint venture) to promote real estate operations (including for residence) in Israel.
One of the significant advantages of the Framework Agreement with the Chinese Company is the funding of the projects, to be provided mainly by the Chinese Company. Under the Agreement, the funding of the projects should be executed so that the Chinese company will provide 70% of the funding required to build each project, while ILDC will provide the remaining 30%, of which 15% will be received against the receipt of a bank guarantee from International Bank, and the remaining 15% will be paid in accordance with milestones throughout construction. It was also agreed that the repayment to the Chinese Company will be made over a period of two years from the end of the project or from the receipt of "Form 4". The Cooperation Agreement is implemented immediately, for in the next few weeks the Chinese company will send its own team to Israel for the purpose of examination of the various sites. Following that, the Chinese company will submit proposals for carrying out first two projects – the biggest nursing home in Israel (over 1,000 beds) scale of construction of 65,000 square meters and an office 60-storey office building, totaling approximately 65,000 square meters.
Last month ILDC reported its financial results for 2015, in which the Group has presented an increase of 5.6% in revenues to approximately -747 million, along with increased annual net profit totaling approximately NIS 117 million. The Group has reduced its leverage with a decrease of NIS 500 million in net debt, and in accordance with that, Ma'alot S&P credit rating company recently raised the rating outlook of ILDC Group from "stable" to "positive".
ILDC unlocks hidden value: MLP Company sales two Logistic Parks in Poland for approximately € 89.6 Million.
MLP's free cash flow resulting from the two realizations amounts to € 34 Million.
MLP Company, that coordinates ILDC Group's activity in the Logistic Parks sector in Poland, which is owned by the Company at an effective rate of 38.3%, unlocks hidden value for the Group.
ILDC reported today that MLP has signed two Agreements to sale its full ownership in Tyche Park and in Bierun Park which are located in southern Poland, at the total amount of € 80 Million. The completion of the transaction will bring MLP a free cash flow of € 31 Million. As part of the transactions it was agreed that in case MLP will build an additional building in one of the parks and will rent it according to the agreed terms, the consideration of the transaction will rise to € 89.6 Million, and accordingly the free cash flow from the transactions will grow to € 34 Million. The completion of the transaction is subjected to a few conditions, among others, receiving the approval of a Polish Government Institute.
The two Parks are estimated in the Company's books at a capitalization rate of 7.75%-8%, a rate which is acceptable in Poland in this sector. MLP will record a profit of € 8.6 Million with the completion of this transaction including building and renting the additional building. This reflects a transaction value that is at a lower return rate than the capitalization rate of the estimated properties.
Micha Shapira, MLP's President: "the above mentioned transaction is a reflection of extracting the full potential of Tyche Park and taking advantage of the commercial opportunities of selling the developed part of Bierun Park including future conditional sale of the undeveloped areas. The two parks are being sold after completing the Entrepreneurship potential of the land, renting the properties, building and selling them at an attractive price which will result in a substantial cash flow to the Company. As of the date of the Company's issuance (October, 2013) it has rented approximately 100,000 sqm.-we intend to follow up and expedite the rental rate whether on the basis of lands owned by the Company which include additional building rights of 260,000 sqm. or purchasing new lands at high demand areas".
MLP is traded in the Warsaw Stock exchange at a value of NIS 650 Million, operating at the sectors of developing, renting and operating Logistic and industrial Parks in Poland and is one of the major business branches of ILDC Group.
ILDC takes advantage of the low interest rate; increased the existing loan against the Seven Stars Mall to an addition of approximately 154 million.
The mall is one of the leading malls in the country, generating annual NOI of $ 73 million and its value amounts to approximately 1.04 billion
The Israel Land Development Company signed an agreement today, to expand the scope of funding against the Seven Stars Mall. The addition to the loan amounts to approximately 154 million, bears an interest rate of prime + 1.15% and will be repaid by the end of 2023. The addition was received due the continuing rise in the value of the mall, along with current repayments of the loan.
ILDC's CEO, Mr. Ofer Nimrodi: "The Seven Star Mall is a flagship property of the Israel Land Development Group, and its value increased significantly thanks to the steps of improvement we have implemented in recent years, mainly the expansion of commercial space, which led to the introduction of more high-quality tenants, while extending the lease periods. The added loan is part of the group's strategy to undertake measures to reduce its financing costs, while extending the average duration of the loans. "
The Seven Stars Mall is located on the Seven Star Boulevard in Herzliya and is among the leading malls in the country. The mall's commercial area amounts to approximately 25,000 square meters, spread over three commercial floors, and also includes three floors of parking. On the basis of the latest evaluation dated June 30, 2015, the mall NOI yields an annual amount of approximately NIS 73 million and its value amounts to NIS 1.04
A Purchasing Group has signed a sale agreement with The Israel Land Development Company ("ILDC") and purchased approximately 65% of the rights to offices area in "ILDC Tower" in Bnei Brak. ILDC remains the owner of the building rights of the remaining area, which includes approximately 12,800 square meters for commercial area and 12,400 square meters for offices In addition: The Israel Land Development Company promotes building rights for the establishment of long-term care housing in this project.
ILDC announced today (6/17/2015) that the purchasing group organized by Sufrin Projects Ltd., a company owned by Mr. Kalman Sufrin, has acquired rights for an office complex at the "Argaman" complex in Bnei Brak for a total sum of NIS 70 million plus VAT.
The sale agreement that was signed relates to approximately 65% of the rights to the office space in the building to be constructed in the complex, it will be 40 floors high and its total area is expected to be approximately 55,000 square meters. Following the transaction, ILDC will have building rights to 12 floors in the tower, including an area of approximately 12,400 sqm office space and 12,800 sq rights to build commercial space in the complex.
Also, in accordance with the terms of the agreement with Sufrin, whereas the option is exercised for the remaining 15% of the rights, ILDC will receive in exchange for the rights sold by it an additional amount of NIS 14 million plus VAT, until December 31, 2015.
The project has received the principle approval from the lending bank. The construction cost of the office building in the project that also includes the parking lot, is estimated at approximately NIS 530 million. Construction of the project is expected to begin in the coming weeks, and according to the ILDC's estimation, will take approximately 4 years.
Mr. Ofer Nimrodi, CEO of ILDC has expressed great satisfaction from this successful transaction, organized by the Sufrin Group, an experienced and professional entity, that has served as a catalyst for the initiation of ILDC tower in Bnei Brak.
He said: "We intend to develop ILDC's remaining rights in the project, and continue to enjoy the business potential in this complex, that will be developed at the heart of the Bnei Brak's business center, that seems to be one of the areas of high demand in the Dan Metropolis. Realization of a part of the rights in this project in addition to the realization of part of our rights at Rimonim Hotel in Eilat, for the sum of NIS 200 Million at the beginning of the year, is part of the Company's strategy to sign deals that will unlock hidden value, while bringing in potential strategic partners and increasing the Company's liquidity while keeping the potential for future revenues from these projects in the Company".
ILD Hotels sells 67% of its rights at Rimonim Eilat hotel, at a value of NIS 300 million Following the sale, ILD Hotels is expected to include in its financial statements a capital gain, before tax, of NIS 70 million. The available cash flow after loans payments and before tax will amount to NIS 140 million.
ILD Hotels, owned by ILDC (83%), has signed agreements regarding the sale of 66.67% of the leasing rights of its subsidiary, Neptune Hotel Inc, in Rimonim Eilat hotel, including the commercial area adjacent to the hotel ("the Property") for the consideration pf NIS 200 million, reflecting a total value of 300 million NIS for the property. ILD Hotels is expecting to have free cash flow of NIS 140 million, after the partial repayment of the loans against the property and before tax. The capital gain, before taxes, will be approximately NIS 70 million.
ILD Hotels will continue to be the manager of the hotel, as part of Rimonim Hotels Chain, for a period of 10 years, with an option to extend it by the parties for an additional period of up to 7 years.
Ofer Nimrodi, CEO of ILDC: "We welcome two big companies ISTA and Sela Capital as strategic partners in the hotel. I am confident that this partnership will upgrade the hotel's business and maintain its status as one of the leading hotels in Eilat. As result of the transaction ILD Hotels will have a substantial capital gain and significant cash flow. ILD Hotels will also continue to enjoy the hotels business results and its future improvement, as the owner of 1/3 of the property".
Eran Kviatek, CEO of ILD Hotels: "The sale of part of the rights at Rimonim Eilat is another step in the implementation of ILD Hotels' strategy to focus on managing hotels instead of full ownership. We continue to manage the hotel and together with new partners we will continue to invest in the hotel and upgrade it over the years. Rimonim Hotels Chain continues to expand its assets portfolio and has recently added Rimonim Palm Beach Hotel to the chain. I believe that this transaction will also assist in further development of the chain and will increase the range of options to add more hotels."
ILD Hotels, manages through Rimonin Hotels Chain 11 designed hotels from Eilat in the south to the northern Golan Heights. The chain is in the process of growth and currently holds approximately 2,100 rooms.
MLP signed an agreement with leading retailer in Poland – MLP will build for the said company in the next 4 years, industrial parks over a total area of 120.8 thousand square meters