Delek Real Estate and Israeli businessman Egal Ahouvi have signed a major deal under which they will purchase 15 Hilton hotels in the United Kingdom for close to 400 million pounds (about NIS 3.3 billion).
However, the Hilton chain will continue to manage the hotels for at least the next 30 years.
According to the London Times, which first reported the deal, Ahouvi also is close to acquiring a sixteenth unit, the Hilton Edinburgh Airport, for an estimated 14 million pounds.
The 15 hotels contain a total of 3,100 rooms. The two largest are in the London area - one at Gatwick Airport and the other in Kingston. One of the reasons for the purchase is the forecasted upswing in tourism to the U.K. due to London's successful bid to host the 2012 Olympics.
The deal apparently has been closed. However, because of its size, Delek and Ahouvi presumably will try to bring other Israeli investors into it.
According to the Times, Hilton also plans to put additional British hotels on the block, hoping to raise another 400-500 million pounds. The terms of these sales will be similar to the Delek deal, meaning that Hilton will continue to manage the hotels. One of the hotels reportedly up for grabs is the London Metropole, one of Europe's largest hotels.
The Times said that the hotels bought by Delek and Ahouvi were part of a group of 18 properties that Hilton put up for sale in July through a real estate agent, CB Richard Ellis Hotels. Two of these hotels, located in Northern Ireland, have since been taken off the market.
Over the past year, Ahouvi has snapped up real estate in Britain, Germany and Switzerland. At the start of the year, he bought seven properties in Germany for 273 million euros in conjunction with Delek International (another member of Yitzhak Tshuva's Delek Group) and Electra Real Estate, a subsidiary of Electra.
Earlier this month, Ahouvi and Delek International bought 45 percent of an office building in Zurich, which has been rented in its entirety to the University of Zurich until 2015. That deal was worth NIS 432 million.
One of Ahouvi's largest deals was closed in September 2003, when, together with several other Israeli investors, he bought a British parking garage company for 610 million pounds ($978 million at the time of the sale). The investment consortium included Delek International (40 percent), the Phoenix insurance company (5 percent), businessman Zvika Biran (8 percent), and a company controlled by Professor Itzhak Swary. The parking lot company, which owns 138 parking garages that bring in $41 million a year, was purchased from the British bank RBC. To finance the purchase, the buyers took out a 540 million pound loan.
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