Business damage following the corona? Not at
Electra Real Estate
+ 1%
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. The company owned by
Elco
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(59.63%) reports revenues of approximately NIS 46.4 million, compared with approximately NIS 33.5 million in the corresponding quarter last year, an increase of approximately 38.7%. EBITDA was NIS 34.7 million, compared with NIS 32.3 million in the corresponding quarter last year, an increase of 7.6%. The quarterly net profit decreased to NIS 24.1 million, compared with NIS 30.1 million in the corresponding quarter last year, a decrease of 20%, but it is mainly due to tax payments of NIS 7.7 million in the current quarter, compared to NIS 350,000 in the corresponding quarter.
The company announced that it will distribute a dividend of NIS 12.2 million (21 agorot per share), with the determining date being March 29 and the payment date being April 6.
Results of activity from the housing files owned by the company in 2020:
The NOI from managed properties (100%) of this activity in 2020 increased by about 22.8% to about $ 220 million compared to about $ 179 million in 2019. The Same Property NOI (100%) in the housing clusters increased by about 6.4 % To about $ 139 million compared to about $ 130.5 million in 2019.
The company has four sources of income in the field of housing files: (1) Current profits as a limited partner (LP) – current and stable profit from the assets in which the company holds in accordance with its share (FFO); (2) revaluation gains as LP – revaluation gains from the assets in which the company holds in accordance with its share; (3) current annual management fees as GP; (4) Promote as a result of the effect of the gain from the revaluation of the assets or their realization as a GP.
Gil Roshink, CEO of Electra Real Estate, says against the background of the reports: “The housing cluster segment in the southeastern United States continues to show stability and even an increase in demand, with occupancy rates in our properties remaining high at about 94% and rent collection rates on company properties also remaining high at about 96%.
“In the meantime, we recently announced the entry into the single-family home for rent ‘Single Family’ through a contract with a local partner.” In addition, we recently updated our intention to enter the US hotel industry, as we believe opportunities have arisen in the field in light of the Corona crisis. “Real Estate currently has about 35,000 apartments for rent, and we are working to continue to increase it in a way that is in line with the company’s strategy.”
Main results of 2020
Electra Real Estate’s revenues in 2020 increased to NIS 155.5 million, compared with NIS 151.8 million in 2019. The increase in revenues is mainly attributable to an increase in management fees and success fees compared to 2019. Of revaluation of income-producing property in Germany and also that in the corresponding period last year changes were received from partial realizations in India which were imputed to income.
Electra’s net profit Real estate rose to NIS 104.3 million in 2020, compared with NIS 100.6 million in 2019. The increase in profit was mainly affected by the increase in revenues, along with the decrease in net financing expenses, which was mainly due to the decrease in the volume of bonds. It should be noted that the profit in 2020 before taxes amounted to NIS 114.5 million, compared with NIS 107.3 million in 2019.
The company has approximately 35,000 housing units in 106 files in the United States, including 13 transactions for the provision of loans for the purchase of housing files. In addition, the company owns approximately 255 detached houses in the United States.
Investment funds in US housing clusters
In the last three years, the company has raised about $ 1.6 billion in four investment funds in US housing groups from Israeli investors, and in addition raised about $ 600 million during 2020, mainly from US entities in joint transactions alongside the funds. In total, the company has raised about $ 2.2 billion in the last three and a half years.
The first fund:
The company completed the fundraising phase for the first fund to invest in US housing clusters in 2018 in the amount of approximately $ 215 million. As of the date of publication of the financial statements, the fund owns 17 housing clusters in the southeastern United States amounting to 6,036 housing units. The total increase in the value of the fund’s 18 assets from the date of their acquisition amounted to approximately $ 150 million (the company sold 5 assets). The fund made a total distribution to investors (as of the date of publication of the report) of approximately $ 126 million. The principal return on invested capital (ROE) is approximately 84%.
The second fund:
The company completed the fundraising phase of the second fund for investments in US housing clusters in 2019, amounting to approximately $ 462 million. As of the date of publication of the financial statements, the fund holds 42 housing clusters in the southeastern United States amounting to 14,174 housing units. The total increase in the value of the fund’s assets from the date of their acquisition amounted to approximately $ 115.5 million. The fund made a total distribution to investors (as of the date of publication of the report) of approximately $ 46.5 million. The principal return on invested capital (ROE) stands at about 26%.
The third fund:
In December 2019, the company announced the establishment of the third fund to invest in housing collections in the United States. The total liabilities signed as of the date of publication of the financial statements stand at approximately $ 760 million. As of the publication of the financial statements, the fund holds 23 housing files in the southeastern United States, amounting to 6,904 housing units. The fund has revalued 10 of its assets, the value of which has increased by about $ 17.5 million since the date of their acquisition. The fund made distributions to its investors (as of the date of publication of the report) in the amount of approximately $ 10.2 million. The principal return on invested capital (ROE) is approximately 11%.
Housing Financing Investment Debt Fund:
In December 2019, the company announced the establishment of the first fund to provide loans and equity completion instruments for the purchase of housing files. The total liabilities signed as of the date of publication of the financial statements amount to approximately $ 200 million. As of the date of publication of the financial statements, the fund has invested a total of approximately $ 94 million in 13 financing transactions for the purchase of housing files in the southeastern United States. From the date of establishment of the fund until the date of publication of the financial statements, .
Entry into the field of Single Family Rental (hereinafter – “SFR”)
In December 2020, the company announced the expansion of its rental housing business in the United States by adding SFR activity. In this activity, the company acquires private homes with partners that are rented mainly to families. To promote the activity and its management, the company contacted a local partner with extensive experience and reputation. As of the date of publication of the financial statements, the Company has invested a total, net of approximately $ 17 million for the purchase of 255 private homes and deposits for the purchase of additional homes.
The company is considering setting up a fund to invest in hotels in the United States
In January 2021, the company announced that it was considering entering investment fund management in US hotel operations in light of the impact of the Corona epidemic on hotel prices that enable opportunity investment. The company has contracted with a local partner with extensive experience and reputation in hotels in Europe and the US. The partner owns the AKA hotel chain with over 100 years of experience in the United States.