Israeli firms to buy Marriott hotels in the UK

A group of Israeli companies, led by real estate firm Delek Real Estate, has reached an agreement to purchase 47 hotels in the UK, currently being operated by Marriott International.

The vendor is reported by Bloomberg to be the Royal Bank of Scotland.

As per the terms of the deal, Delek Real Estate will get a 17 percent stake in the hotels through its subsidiary, Delek Belron. The remaining stake in the hotels being purchased will be held by other Israeli companies, including Electra Real Estate and a firm owned by businessman Egal Ahouvi, according to the Globes newspaper.

In a statement to the Tel Aviv Stock Exchange, Delek Real Estate said that the investor group will have to provide shareholder capital worth GBP 202.7 million (about USD 394. 858 million).

The investing companies have also secured a long-term loan of GBP 856.1 million (USD 1,667.75 million) to fund the deal, which is expected to be completed by the end of March 2007. Delek Real Estate already owns more than 150 properties in the UK, including parking lots, hotels and office buildings.

Marriott agreed to manage the hotels for 30 years and has an option to extend the deal for another 10 years.

Delek said income after expenses from the hotels is forecast to average USD 194.4 million a year over the next 10 years.

The deal is due to be completed on March 30, 2007.

Delek Belron invests in real estate development and revenue-producing properties in western countries.

Reprinted by permission of The Israel Export and International Cooperation Institute