Liquid investment funds continue to pour capital into the local real estate market with an emphasis on urban renewal projects. The American fund Community led by businessman Jeremy Blank submitted a purchase offer for up to 7.5% of the shares of Beit Vegg, which deals with the planning, initiation and execution of real estate projects and focuses on the field Urban renewal.
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The fund is seeking to purchase the shares at a price of NIS 6 per share, which is 6.8% higher than the closing price of the stock on the Tel Aviv Stock Exchange the day before the offer was reported. In response to the offer, the stock jumped house and roof During the trading day (Monday) at a double-digit rate.
According to the specifications of the purchase offer, the total consideration for the purchase of the shares is up to NIS 25 million, and is conditional on the purchase of at least 3% of the company’s issued and paid-up capital. As of today, Keren Community does not hold any securities of a house and a roof. The purchase offer will be valid until January 3, 2023.
A community fund established in 2020 is registered in the Cayman Islands and operates from California, and its general partner is fully indirectly held by Jeremy Blank, who was previously the representative in Israel of the American hedge fund York, which made successful investments in the Psagot investment house and bonds of the IDB Group which yielded her huge profits, alongside a much less successful investment in the Elbit Imaging company.
The fund invests in shares and bonds of private companies from the real estate, technology and telecom sectors in the US and Israel. Among the fund’s investors are Bank Leumi, Fenix, EBI, Moore and more. A few months ago it was reported that the fund entered as a partner in Yaez Urban Renewal , in a deal valued at hundreds of millions of shekels. According to the deal, the fund will own 49% of the company’s shares, which operates mainly in Tel Aviv and promotes projects in which over 2,500 housing units are planned to be built, both in Pinoy-Binui and in TMA 38.
Beit Vegg is traded on the Tel Aviv Stock Exchange according to a market value of approximately NIS 340 million, after the daily increase, as a result of its IPO in March of this year, the stock lost approximately 20%. Among the company’s largest shareholders are Fenix, Joey Schwabel, and Poalim Equity.
This week, Beit Vagg announced a win in Amidar’s public tender for the purchase of rights in an urban renewal project of the evacuation-construction type in Ra’anana. According to the report, in exchange for the purchase of Amidar’s rights in the project, Beit Vagg will pay an amount of NIS 14.5 million, and assuming that the level of apartment prices at the time of marketing will be similar to today’s level, the amount of revenue that the company estimates from them will reach NIS 182 million plus VAT. In the first half of 2022 Beit Vagg Recorded revenues of NIS 115 million and a loss of NIS 2.7 million.
The investment arm of the Disney family invests in urban renewal
The purchase offer of Beit and Roof Community joins another deal reported this week. The Shamrock Company, the investment arm of the American Disney family, announced that it is joining Leumi Partners and entering into an investment of approximately NIS 70 million in the shares of the urban renewal company Engel Invest controlled by Yaakov Engel, and it will own 12% of the company at a value of approximately NIS 570 million (after the money).
Shamrock was given an option to purchase an additional 5% at the same value. Shamrock, headed by Stanley Gold, invests in assets from the fields of media, entertainment, communications and hotels around the world, and in Israel it previously invested in Bezeq, Kor and Tadiran Kesh.
Engel Invest was founded by Jacob Engel, who previously owned the listed Engel Construction Group, and currently also operates in the field of quarries in Israel and minerals and mines in the world, as well as holding a large portfolio of yielding real estate, which mainly includes office and commercial buildings in England.
Engel Invest is involved in the construction of more than 4,000 housing units in about 30 projects at various stages (approval or execution procedures), including in Ramat Hasharon, Herzliya, Jerusalem, Givatayim, Ramat Gan, Tel Aviv, Ashdod and more.
Shamrock stated that it recognizes an opportunity in the field of urban renewal, in light of the national need to expand the supply of residential apartments, especially in areas of demand. Leumi Partners, Leumi’s investment arm, invested NIS 60 million in Angle Invest a year and a half ago and owns 20%, but will decrease to 18% following Shamrock’s investment.
***Full disclosure: Alona Bar On, publisher of Globes, is one of the founders of Beit Vagg and a director