| Nadav Berkowitz, Real Estate Analyst, IBI Investment House
In general, the real estate sector showed weaker results than most sectors in the whole of February and also in a weekly look, more relevant to the events of Ukraine, the real estate sector recorded sharp declines. However, when examining stocks in depth, it can be seen that the market has made a separation between the types of sectors.
The residential real estate sector, which has risen sharply in recent times and has benefited from the flow of mutual funds, has been hit hard. It has shown a negative return of 12% in the last week and a 13% decline since the beginning of the month.
Most residential real estate companies recorded a decrease of 10% -20%, while of the large companies, Israel Canada (TASE 🙂 and Shikun VeBinui (TASE 🙂 stood out, which recorded a decrease of only about 5%, similar to the market trend.
In the negative, Hajaj Europe (TASE 🙂 stood out with exposure to Eastern Europe and Levinstein Engineering (TASE :).
We estimate that opportunities have been created in the sector when the impact of the past week does not directly affect companies.
| Income-producing real estate in Israel
Sector, fell much less than housing companies this week, down just 3% and down 6% from the beginning of the month. Regarding the beginning of the month until the last week, it can be assumed that the declines were mainly due to the fear of an interest rate increase later in the year.
The stocks that stood out positively last week are Arena Group (TASE :), Isras (TASE 🙂 which reported large revaluations ahead of the reports and Gev Yam (TASE 🙂 stock where trading is low and in the background there is a parent company offering to buy some of the shares.
| Income-producing real estate abroad
Sector, fell about 8% this week when here are a number of companies that were directly affected by the exposure to Russia or Eastern Europe.
Atrium, a subsidiary of Gazit Globe (TASE :), for example, has exposure to a number of assets in Russia amounting to EUR 250m (10% of the assets) and also to Effie Properties (TASE 🙂 there is exposure to Eastern European countries (Czech Republic, Poland Romania and Serbia). Both companies fell about 9% this week.
| Bottom line
The last month has seen sharp declines in the real estate sector, especially in the residential sector and companies with higher exposure to Eastern Europe. Nevertheless, economically, the impact of the war in Ukraine on real estate stocks in Israel is low.
Outflows from mutual funds and rising interest rates are factors that are expected to have a more substantial impact on the sector, certainly in the long run.
The author is a real estate analyst at the IBI Investment House. With respect to information.IBI, the review writers and its editors are not responsible for the reliability of the information, its completeness, the accuracy of the data contained in it or any omission, error or other defect in it.This review does not constitute investment advice and does not constitute Therefore, the information contained therein should not be relied upon and is not subject to independent discretion and the receipt of professional advice that takes into account the data and special needs of each person. In review.