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Bank Leumi sells Tel Aviv head office for NIS 623m

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Bank Leumi (TASE:LUMI) announced today that it is selling Its Tel Aviv head office buildings including Beit Mani, for NIS 623 million to Shmuel Slavin’s Sella Capital Real Estate (TASE: SLARL). After the sale Bank Leumi will report a pre-tax profit of NIS 524 million.

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

The deal comprises 13,000 square meters of office space and an underground car park for more than 200 cars in one of Tel Aviv’s most expensive and sought after areas in the city center, which houses many financial and tech companies.

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

Sella Capital added that the rent will be about NIS 175-185 per square meter, fully finished, so that net income should be about NIS 32 million annually, with return on equity of about 10%.

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

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

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

Last year, Leumi sold a 1,640 square meter building at 31 Lillienblum Street in Tel Aviv for NIS 66 million plus VAT to Sela Construction. The building, put up in the 1950s, has major potential for enhancement and rezoning including demolition and reconstruction for mixed-purpose use.

Published by Globes, Israel business news – en.globes.co.il – on April 26, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.


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U.S. natgas futures drop 5% on rising output, milder forecasts

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U.S. natural gas futures fell about 5% on Friday as output slowly rises and on

forecasts for milder weather and lower demand over the next two weeks than previously expected.

That decline comes despite a jump in the amount of gas flowing to U.S. liquefied natural gas (LNG) export

plants to a near seven-week high following maintenance outages at some Gulf Coast plants.

Although the weather is expected to turn milder next week, it’s still hot in many parts of the country

now.

In the spot market, next-day power at the PJM West hub and gas at the Dominion South hub

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in Pennsylvania jumped to their highest since the February freeze in 2021 as homes and

businesses crank up air conditioners to escape the heat.

High air conditioning use also boosted peak power demand in Texas to a record for the month of May on

Thursday. The state’s grid operator forecast demand would likely break that record peak on Friday.

U.S. front-month gas futures for June delivery fell 37.9 cents, or 4.6%, to $7.929 per million

British thermal units (mmBtu) at 9:17 a.m. EDT (1317 GMT).

Despite Friday’s decline, the contract was still up about 4% for the week after falling about 5% last

week.

Gas was trading around $28 per mmBtu in Europe and $22 in Asia. The U.S. contract

rose to a 13-year high near $9 on May 6.

U.S. futures lag far behind global prices because the United States is the world’s top producer, with all

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the gas it needs for domestic use while capacity constraints inhibit exports of more LNG.

Data provider Refinitiv said average gas output in the U.S. Lower 48 states climbed to 94.9 billion cubic

feet per day (bcfd) so far in May from 94.5 bcfd in April. That compares with a monthly record of 96.1 bcfd in

November 2021.

Refinitiv projected average U.S. gas demand, including exports, would hold near 89.7 bcfd this week and

next before sliding to 88.7 bcfd in two weeks.

The average amount of gas flowing to U.S. LNG export plants rose to 12.3 bcfd so far in May from 12.2 bcfd

in April. That compares with a monthly record of 12.9 bcfd in March. The United States can turn about 13.2

bcfd of gas into LNG.

On a daily basis, however, LNG feedgas was on track to hit a near seven-week high of 13.3 bcfd on Friday.

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Since the United States will not be able to produce much more LNG soon, it has worked with allies to

divert exports from elsewhere to Europe to help European Union (EU) countries and others break their

dependence on Russian gas after Russia’s Feb. 24 invasion of Ukraine.

Russian gas exports to Europe rose to around 8.1 bcfd on Thursday from about 7.8 bcfd on Wednesday on the

three mainlines into Germany: North Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the

Russia-Ukraine-Slovakia-Czech Republic-Germany route. That compares with an average of 11.9 bcfd in May 2021.

Gas stockpiles in Northwest Europe – Belgium, France, Germany and the Netherlands – were

about 14% below the five-year (2017-2021) average for this time of year, down from 39% below the five-year

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norm in mid-March, according to Refinitiv. Storage was currently about 37% of full capacity.

That is healthier than U.S. inventories, which were around 15% below their five-year norm, because high

European gas prices have kept LNG imports strong while Russia keeps supplying fuel via pipeline.

Week ended Week ended Year ago Five-year

May 20 May 13 May 20 average

(Forecast) (Actual) May 20

U.S. weekly natgas storage change (bcf): +95 +89 +109 +97

U.S. total natgas in storage (bcf): 1,827 1,732 2,199 2,139

U.S. total storage versus 5-year average -14.6% -15.2%

Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year

Last Year Average Average

2021 (2017-2021)

Henry Hub 7.94 8.31 2.96 3.73 2.89

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Title Transfer Facility (TTF) 28.05 27.88 8.88 16.04 7.49

Japan Korea Marker (JKM) 21.79 21.17 9.65 18.00 8.95

Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days

Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year 30-Year

Norm Norm

U.S. GFS HDDs 36 31 43 49 44

U.S. GFS CDDs 128 132 86 96 102

U.S. GFS TDDs 164 163 129 145 146

Refinitiv U.S. Weekly GFS Supply and Demand Forecasts

Prior Week Current Week Next Week This Week Five-Year

Last Year Average For

Month

U.S. Supply (bcfd)

U.S. Lower 48 Dry Production 95.2 95.1 95.1 92.0 83.9

U.S. Imports from Canada 7.9 7.6 7.9 7.2 7.6

U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1

Total U.S. Supply 103.2 102.7 103.0 99.2 92.6

U.S. Demand (bcfd)

U.S. Exports to Canada 2.9 2.8 2.7 2.1 2.1

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U.S. Exports to Mexico 6.2 6.2 6.2 6.1 4.8

U.S. LNG Exports 12.2 12.2 13.1 10.5 5.1

U.S. Commercial 6.0 5.0 5.1 4.9 5.6

U.S. Residential 7.0 4.7 4.8 4.7 6.7

U.S. Power Plant 28.2 31.4 30.3 25.4 26.0

U.S. Industrial 21.0 20.7 20.9 21.4 20.9

U.S. Plant Fuel 4.7 4.7 4.7 4.7 4.6

U.S. Pipe Distribution 1.8 1.8 1.8 1.8 1.8

U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1

Total U.S. Consumption 69.0 68.5 67.7 63.0 65.7

Total U.S. Demand 90.3 89.6 89.7 81.7 77.7

U.S. weekly power generation percent by fuel – EIA

Week ended Week ended Week ended Week ended Week ended

May 20 May 13 May 6 Apr 29 Apr 22

Wind 11 15 13 16 16

Solar 4 4 4 4 4

Hydro 7 7 7 7 7

Other 2 2 2 2 2

Petroleum 0 0 0 0 0

Natural Gas 38 34 36 33 33

Coal 20 18 19 19 19

Nuclear 19 19 20 19 19

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)

Hub Current Day Prior Day

Henry Hub 8.21 8.53

Transco Z6 New York 7.82 7.75

PG&E Citygate 9.78 9.98

Dominion South 7.62 7.55

Chicago Citygate 7.93 8.08

Algonquin Citygate 7.94 8.04

SoCal Citygate 8.19 8.68

Waha Hub 7.33 8.01

AECO 4.58 6.41

SNL U.S. Power Next-Day Prices ($ per megawatt-hour)

Hub Current Day

New England 70.00 78.75

PJM West 153.50 131.75

Ercot North 80.00 77.75

Mid C 18.25 19.19

Palo Verde 37.50 41.00

SP-15 51.25 53.00

(Reporting by Scott DiSavino; Editing by Kirsten Donovan)

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Sri Lanka Hunts For Cash To Pay Oil Traders For Crude And Fuel

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Unloading procedures for one cargo of gasoline have begun but the ship cannot berth yet because there’s no space for it to do so, according to the harbor master at the port of Colombo. Meanwhile, Prime Minister Ranil Wickremesinghe said the government is also trying to find the cash to complete a rare purchase of crude oil from Russia.

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European Central Bank member says to expect first rate hikes this summer

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Joachim Nagel, Germany’s central bank governor and ECB member, shares his latest thoughts on inflation and the possibility of rate hikes in the euro zone.

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The ECB will soon hike rates for the first time in more than a decade, a member of the central bank’s governing council told CNBC Friday.

The ECB has been in the spotlight for its less aggressive stance on monetary policy compared to other central banks. However, expectations of a rate rise have grown in recent months amid continuous increases in inflation, with market players now pointing to at least four rate hikes before the end of the year.

“We are on the right path,” Joachim Nagel, president of the Germany’s Bundesbank and one of the ECB’s more hawkish members, told CNBC’s Annette Weisbach.

“In our very important meeting in March we decided to end our net asset purchases and in the June meeting, dependent on data, we will decide to stop maybe — and I say this because this data are speaking a very convincing language here — that we stop our purchases and afterwards I believe we will see rather soon the first rate hikes,” he said.

His comments indicate that the first interest rate rise could come in July, once the ECB has debated new economic forecasts released the prior month.

Nagel, who has been in the job since January, said he has been warning about higher inflation since taking on the role, and is now seeing more momentum toward increasing interest rates.

“I pretty much appreciate that many colleagues now from the governing council are joining my position here,” he said.

His comments follow those of Francois Villeroy de Galhau, head of the Bank of France and fellow ECB member, who said he expects a gradual increase in rates from the summer onwards.

Meanwhile, Italy’s Ignazio Visco, the governor of the Bank of Italy and a notable ECB “dove,” told CNBC that a rate hike “may be during the third quarter or at the end of the year, but it has to be gradual.”

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