Israel Canada Entering the field of sheltered housing: The real estate company controlled by Barak Rosen and Assi Tochmeier announced this morning (Wednesday) to the stock exchange that it has entered into an agreement to purchase a sheltered housing club in Kfar Shmaryahu for NIS 125 million. The club, Neve Aviv, is now owned Sharsh – that you will earn about NIS 50 million before tax for the transaction.
Israel Canada’s announcement indicates that it intends to enter the field of “premium” sheltered housing, or as it defined “homes characterized by a high level of finish and the provision of ancillary services at a high level.” It was also stated that the company intends to purchase land with an existing master plan for sheltered housing and to initiate and maximize the addition of rights. The activity will be carried out through a dedicated subsidiary that will be fully owned, and will concentrate the activities of the sheltered housing sector.
The contract with Isras was made through a subsidiary of Israel Canada (a subsidiary of the designated sheltered housing company). Isras has not yet published annual reports, but third-quarter reports show that the club, which covers 4.8 dunams in Kfar Shmaryahu, is a loss-making asset that recorded a gross loss of NIS 750,000 in the first nine months of the year. Israel Canada stated in its report that indeed the activity of the property is not material, but it intends to upgrade it and act to fully populate it.
The field of sheltered housing is hot on the stock market
The field of sheltered housing appeals to investors in part because it offers long-term cash-flow income. Last January, the sheltered housing network was issued in Tel Aviv a house in the village At a value of about NIS 1.1 billion, and since then the stock has climbed about 20% and almost achieved the market value of the big competitor, Mediterranean Towers – Its twice as many housing units and income is about 150% higher.
Hajj Group It also recently announced its entry into the field and intends to establish and manage prestigious sheltered housing centers, and in September Shafir Engineering She also jumped on the bandwagon when she acquired control (53%) of the “Up to 120” chain from Phoenix for NIS 845 million. In December, the Phimie Fund entered the tangent field when it acquired 80% of the shares of the nursing and nursing homes chain Amal and Beyond at a value of about NIS 1 billion. The Azrieli Group also has sheltered housing activities through the Palace chain.
Real estate revaluations have helped with the strong annual results
A few days ago, Israel Canada reported record revenues of NIS 706 million in 2021, a jump of about 160% compared to revenues in the previous year. Its net profit jumped almost 6.5 times and amounted to NIS 612 million, compared to a profit of only NIS 95 million in 2020.
Contributing to the beautiful results was an increase in revenues from the company’s hotel sector, which showed a recovery after the difficult corona year and amounted to NIS 121 million, compared to only NIS 12 million in 2020. A significant increase in profits from real estate asset revaluations, which characterized most of the reports of the yielding real estate companies recently, also helped performance when it jumped almost 10 times compared to the previous year and amounted to NIS 342 million.
During the past year, it made acquisitions amounting to NIS 6.5 billion (including 13% of Alrov Real Estate’s shares for NIS 382 million), and in January it continued its momentum and acquired another 11% of Norstar shares with an investment of NIS 118 million.
As for the current transaction, NIS 25 million of the total consideration was paid at the time of signing the agreement (against registration of a warning note in favor of the granddaughter company) and the balance, plus VAT and linkage differences to increase the consumer price index, will be paid by the end of 2022. Starting this coming July.
The Israel Canada share is traded on the Tel Aviv Stock Exchange at a market value of NIS 5.2 billion, after doubling its value within 12 months. Looking back three years, the stock has soared more than five times. In the last quarter, it joined the negative momentum in the market, shedding about 10% of the campaign.