Engel Europe has signed an MOU for the sale of a 5,100-sq.m. building in Krakow, Poland for NIS 40 million. Completion of the deal will give Engel Europe a NIS 16.5 million pre-tax capital gain, and generate a NIS 30 million cash flow surplus. The deal is subject to due diligence by the buyer.
The buyer, a British investment fund, bought several logistics warehouses in Budapest from Engel Europe for NIS 43 million during the second quarter, generating a NIS 19 million capital gain. At the same time, a developer who holds a stake in the Krakow building has first refusal rights; the British fund will buy the building only if the developer fails to exercise his rights. Engel Europe acquired its share of the building from the developer in 2001.
The sale of the Krakow building follows two other sales of real estate by the Engel group in recent months. In addition to the Hungarian logistics warehouses sold to the British fund, Engel Resources and Development Ltd. , in which Engel Europe holds 89%, is expected to post a NIS 27 million capital gain in the third quarter on the sale of two apartment blocks in Israel for NIS 107 million. The three deals generate NIS 190 million in total proceeds and NIS 60 million in total capital gains.
Engle group CEO Mati Dov said in response to the deal, “The company will continue to sell properties that have increased in value, while improving and developing the projects and income producing properties that it owns in Europe, Canada, and Israel, and investing in new projects and properties.”
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