Leumi sells TA head office for NIS 623m.

Bank Leumi on Wednesday said it is selling its Tel Aviv head office buildings, including Beit Mani, for NIS 623 million to Shmuel Slavin’s Sella Capital Real Estate. After the sale, Bank Leumi will report a pretax profit of NIS 524m., it said.

Bank Leumi is selling two adjoining buildings at 30-36 Yehuda Halevi Street: a 13-floor office tower built in the early 2000s and historic Beit Mani, which was built in 1910 and is subject to a preservation order as one of the first buildings erected in Tel Aviv’s initial Ahuzat Bayit neighborhood.

The deal comprises 13,000 sq.m. of office space and an underground parking lot for more than 200 cars in one of Tel Aviv’s most central and expensive areas, housing many financial and tech companies.

Sella Capital said the property would be transferred to the company when it is vacant, and the building will be leased to tech companies at full occupancy.

The rent would be about NIS 175-NIS 185 per sq.m., fully finished, so that net income should be about NIS 32m. annually, with return on equity of about 10%, it said.

Selling Beit Mani and the adjoining office building is part of a broad strategic move that Leumi has been implementing in recent years as all management offices are transferred to a new headquarters in Lod.

The move should be completed by the end of 2023, and the bank will record a profit on the entire sale. Leumi finance division head Omer Ziv is leading the transaction.

Sella Capital Real Estate was founded in 2008 as a real-estate investment trust (REIT). The company owns 41 income-producing properties in Israel with overall space of 480,000 sq.m., which are leased to 530 tenants. At the end of 2021, the income-producing properties were worth about NIS 5 billion, with occupancy of 98%.

Leumi has sold several major properties in recent years, including its 6,800sq.m. Tel Aviv main branch, to Akro Real Estate for NIS 277m. in 2017. Eighteen months ago, Akro sold the building to Israel Canada for NIS 440m.

Last year, Leumi sold a 1,640-sq.m. building at 31 Lillienblum Street in Tel Aviv for NIS 66m. plus VAT to Sela Construction. The building, constructed in the 1950s, has major potential for enhancement and rezoning, including demolition and reconstruction for mixed-purpose use. (Globes/ TNS)