Investment Objective and Strategy

The investment objective of the Habira Group REIT will be to generate strong cash flow and pay stable cash dividends to investors, with a minimum of risk.  The REIT expects to attain its objective by investing primarily in commercial, income generating properties, but will also consider residential, industrial and mixed-use properties.  In evaluating potential property investments, the REIT will consider, among other factors, the rate of return it can expect to earn, the condition of the property (will renovations or capital improvements be required in the near future), the length of existing tenant leases, the current creditworthiness of the existing tenants and the rent profile of the property (e.g., is there a sufficient pool of low risk potential tenants in the area).  The REIT will also evaluate whether a property has available building rights or other rights that can be used to increase the property's cash flow or value.

 

As its target return, the REIT will seek to provide initial investors with an annual dividend distribution, once its funds are fully invested, equal to at least seven percent (7%) of the amount they invested.  To achieve its target return, the REIT will primarily focus on rent producing properties that can provide it with a greater than eight percent (8%) return on its acquisition price.  The REIT will also make judicious use of leverage to maximize returns.  Although under the Israeli rules governing REITs, a REIT generally is allowed to borrow up to 60% of the gross value of its real estate assets, the Habira Group management team expects to limit the REIT's leverage to between 40% and 50% of the gross value of its real estate assets.  This target return is net of any salaries, management fees or other expenses incurred or paid by the REIT, but does not reflect the effect of taxes payable by investors in respect of any distributions, which will reduce returns.

 

 

Points for Consideration:

 

  • Rate of return

  • Condition of the property

  • Terms of existing leases

  • Tenants' creditworthiness

  • Property rent profile

  • Building rights

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