Africa Israel to sell 51 pct of Tel Aviv tower

TEL AVIV Jan 11 (Reuters) - Africa Israel Properties (AFPR.TA), a subsidiary of Africa Israel Investments (AFIL01.TA), said on Sunday it agreed to sell 51 percent of its holdings in Tel Aviv's Jubilee Tower to an entity controlled by foreign investors.

The sale values the building, plus rights to a student housing project at the Hebrew University of Jerusalem's Mount Scopus campus, at 1.05 billion shekels ($272 million).

Africa Israel Properties said it will receive 135 million shekels for the sale of 51 percent, after deducting 760 million shekels in bank credit to finance the projects.

According to the agreement, Africa Israel will retain 49 percent of the two projects and will continue to manage the projects in exchange for management fees.

The 75,000 square metre Jubilee office tower is mostly rented to the government of Israel.

Africa Israel Investments, which is controlled by billionaire diamond dealer Lev Leviev, has interests in real estate, energy, hotels, infrastructure and fashion. It owns 71 percent of AFI Development (AFIDLq.L), a Russia-focused real estate company.

After suffering a steep loss in the third quarter, the company said it would increase its liquidity by reducing short-term debt and selling off properties in Israel and abroad.

Shares in Africa Israel Propeties were up 8 percent in morning trade in Tel Aviv, while Africa Israel Investments had gained 6.5 percent, compared with a flat broader market.

($1 = 3.86 shekels)

(Reporting by Tova Cohen; Editing by David Cowell)