Vitania Buys Out Land Family's Stake in Elbit-Leased Project for $83 Million
Translated & summarized from Bizportal by baba
Real estate firm Vitania is acquiring the Land family's stake in a 40,000 sqm office and industrial project in Ness Ziona for NIS 307 million. The property is leased long-term to Elbit Systems, providing a stable revenue stream. The deal follows financial difficulties for the Land family's original tenant. Vitania expects a NIS 68 million accounting loss from the acquisition, which will increase its debt and financing costs, leading to a credit rating review.
The story in 6 lines · by baba
- Vitania is purchasing the Land family's share in a 40,000 sqm project in Ness Ziona for NIS 307 million.
- The project's first phase is fully leased long-term to Elbit Systems.
- The acquisition follows financial struggles of the Land family's original tenant.
- Vitania anticipates a NIS 68 million accounting loss from the deal.
- The deal is expected to increase Vitania's debt and financing costs.
- Credit rating agency Midroog has placed Vitania's rating under review for negative implications.
Real estate company Vitania, controlled by the Unger family and managed by Yariv Bar-Daya, has signed an agreement to acquire the Land family's full rights in the first phase of the Vitania-Land project in Ness Ziona's Science Park for approximately NIS 307 million (about $83 million). Upon completion, Vitania will own 100% of this phase, which comprises about 40,000 square meters of office, laboratory, and industrial space leased long-term to Elbit Systems.
The deal follows a difficult period for the project. Originally intended for Benny Landay's printing company, which was to occupy most of the space, the company faced financial difficulties and insolvency proceedings. This led Vitania to record an NIS 80 million devaluation of the project last year.
A turning point came last May when Vitania secured a lease agreement for the entire building with Elbit Electro-Optics Elop, a subsidiary of Elbit Systems. The lease, spanning nearly 25 years, includes an exit option for Elbit after 17 years and 9 months, with cumulative rent payments of approximately NIS 544 million before that point, ensuring a long-term revenue stream.
The NIS 307 million transaction involves approximately NIS 248 million to repay a bank loan of the partner, NIS 57 million to settle a debt owed by Landay to Vitania, and the remainder for a NIS 1.5 million loan repayment. Vitania plans to finance the acquisition through a bank loan, with terms yet to be finalized.
While the acquisition increases Vitania's stake in the Elbit-leased property, it is expected to negatively impact its short-term financial statements. Vitania anticipates a NIS 68 million accounting loss, including NIS 50 million from the deal itself and NIS 18 million in acquisition taxes. Credit rating agency Midroog has placed Vitania's A2.il rating under review for negative implications due to the projected increase in debt and financing costs, estimating the company's leverage ratio could reach 65%. However, the increased ownership in the Elbit-leased asset is expected to boost Vitania's operational revenues once the property is fully adapted and operational. The entire project spans about 35 dunams with building rights for 105,000 square meters; the current deal only covers the first phase, with remaining rights held equally by Vitania and the Land family. The acquisition's completion is contingent on security registrations and lease rights transfers.
Mentioned
The same event, reported separately by each outlet. Open a few to compare what different newsrooms emphasize — and what they leave out.
Other 2
