The sale of “one of Birmingham’s best office buildings” to an Israeli financial services company has been completed for £32.2 million.
AXA Real Estate Investment Managers sold 115 Colmore Row on behalf of The Co-operative Insurance to CLAL Insurance Enterprises Holdings.
CLAL is listed on the Tel Aviv Stock Exchange and has a portfolio of properties with 76 per cent in Israel and the rest in London.
The 80,000 sq ft Grade A office near Victoria Square has 94 car parking spaces and is rented to law firm Eversheds on a lease with 11 years left to run, with no early exit clause.
Colin Goodwin, senior fund manager at AXA Real Estate, said: “This disposal demonstrates that there is still a clear demand for high quality well-let income producing offices in the UK’s second city and allows us to rebalance The Co-operative Insurance’s portfolio.”
Asher Golker, head of the Knight Frank Israel desk, which advised the buyer, added: “CLAL are one of the largest financial institutions in Israel and have been increasingly active in the UK real estate market over the past few years.
“They are delighted to have acquired 115 Colmore Row, one of Birmingham’s best office buildings, which is an excellent addition to their UK portfolio.”
Knight Frank acted on behalf of AXA Real Estate/The Co-operative Insurance.
The net operating return on the building is £2.2 million a year, for a gross annual return on investment of seven per cent. Clal Insurance said the current rent reflects a price of £25.20 per sq ft per year, but that the property has improvement potential, as prevailing rents in the area are £28.50 per sq ft per year.
Amir Schostak from Clal Insurance real estate operations said that the purchase improves the company’s foreign property portfolio, with the goal of diversifying the company’s assets.
Clal Insurance posted net earnings attributable to equity-holders for the first nine months of 2011 of around £16 million, compared with earnings of around £70 million for the same period in 2010.
The loss after tax in the third quarter was around £32 million, compared with around £29 million the year before.
Clal Insurance is a subsidiary of IDB Holding Corp, chaired by one of Israel’s richest men Nochi Dankner.