Paz is preparing to issue its real estate: Calcalist has learned that in recent weeks, the company’s chairman Harel Locker and CEO Nir Stern have conducted a series of interviews with potential candidates for the position of CEO of Paz’s dedicated real estate company.
Read more in Calcalist:
As part of these talks, Locker and Stern announced their intention to establish a separate real estate company of Paz and to issue it on the Tel Aviv Stock Exchange in the coming months.
2 View the gallery
Paz Chairman Harel Locker. Interviewed candidates for CEO of the real estate company
(Photo: Uriel Cohen Amit Shabi)
Information recently published by Paz for investors shows that the value of the real estate it currently owns is estimated at NIS 5.5 billion. However, this is the total value of the Ashdod refinery, from which Paz intends to divest. About NIS 3 billion. That is, an IPO of the real estate sector is expected to lead to a significant flood of value for investors in Paz.
According to estimates, Paz will seek to issue to the public about 30% of the silent real estate company and will continue to hold 70% of the shares.
Paz has quite a few properties, including a plot in Haifa that covers an area of 103 dunams, with a tank farm, a dispensing facility and a Paz oils plant; Land at Ben Gurion Airport – 23 dunams with container farms of aviation properties; Properties throughout the country that are used by Pazgaz; And 52 dunams of land in the Alon Tavor industrial area, on which the Pesker plant is located.
Prominent properties of Paz that are in the process of improvement
1. Gas station on Ben Zvi Street in Tel Aviv
A commercial and office building will be erected, and the gas station will be rebuilt
2. Gas station on Third Wall Street in Jerusalem
A hotel will be built on the station grounds, subject to permits
3. Gas station on Jabotinsky Street in Ramat Gan
The company is promoting the construction of an office building on the site
4. A plot of 10.5 dunams near the port of Ashdod
The construction of 12,000 square meters for industry with permitted use for storage has been approved
5. A plot of 5 dunams near the IKEA branch in Be’er Sheva
Approved for the purpose of trading
At this point in time, Paz has 104 properties that it owns throughout the country – most of them fully owned and some in partnership with other entities. In 89 of these complexes, Paz already leases space to third parties, which include companies such as McDonald’s, Aroma, Domino’s Pizza, Golda Ice Cream and more. This is about 27,000 square meters of built-up area for rent.
2 View the gallery
Paz station near the Mea Shearim neighborhood of Jerusalem. The area is designated for the construction of a hotel
(Photo: Amit Shabi)
In talks with Paz with potential candidates for the position of CEO of the designated real estate company, senior executives noted that the company that is expected to be established will also engage in the improvement and growth of the real estate sector in Paz, through deals with strategic partners based on its assets. In the market, among other things due to the fact that Paz is a long-standing company with a long history, and as such it enjoys a very wide geographical spread.
Some of Paz’s gas stations are in different areas of demand, and they may embody an economic advantage for the company, by converting them to other purposes – residential, employment, commercial and other mixed uses.
For some of the properties, improvement plans have already been approved, and it is possible that in some of the complexes it will be done at the expense of gas stations and convenience stores operating in their area. About 20 of Paz’s properties are currently being improved for residential, commercial, office and hotel purposes, on a total area of about 150,000 square meters.
A year ago, Paz planned to establish a subsidiary, transfer the properties for improvement and find a partner in the real estate field to develop them together, but no company was found that would match the profile that Paz was looking for.
Among other things, this is the Paz station on Ben Zvi Boulevard in Tel Aviv, where a project for a building intended for commerce and offices is being promoted, along with a gas station that will be rebuilt as part of an approved master plan. To the Mea Shearim neighborhood, a hotel will be built on the station grounds, subject to permits.
In the area of another station, on Jabotinsky Street in Ramat Gan, Paz is promoting a plan to build an office building. Other locations that are in the process of improvement are a plot of land in an area of about 10.5 dunams, near the port of Ashdod, which will be designated for the construction of about 12,000 square meters for industry with permitted uses for storage. Another plot of about 5 dunams, approved for commercial use IKEA in Be’er Sheva.
The direction Paz is now heading is very different from the move she planned about a year ago. So the plan was to set up a subsidiary, to which the real estate improvement properties would be transferred, and bring in a real estate partner to develop them together. Paz estimated at the time that these were 25-20 relevant properties, tried to find a partner, but no real estate company was found that would match the profile definitions that Paz was looking for. And flood value for investors.
Two weeks ago, Paz published its financial statements for 2021 and reported a net profit of NIS 224 million, compared with a loss of NIS 366 million in the previous year. Excluding the refinery, from which Paz is expected to part by the end of the year, the annual net profit was NIS 321 million.
Annual revenues in the retail and trade sector amounted to NIS 6.76 billion, compared with NIS 4.68 billion in 2020 – a growth of 44%. Revenues from food retailers, including the Super Yoda chain, which Paz acquired a few months ago, amounted to NIS 1.21 billion, compared with NIS 978 million in 2020, an increase of 24%. The group’s revenues grew by 45% to NIS 11.55 billion, compared with NIS 7.94 billion a year earlier.
EBITDA for 2021 increased by 68% and amounted to NIS 1.05 billion, and operating profit jumped to NIS 477 million compared to an operating loss of NIS 327 million in 2020. Annual sales in the field of refining amounted to NIS 8.15 billion, compared with NIS 5 billion in 2020, a 63% improvement due to an increase in prices and an increase in sales volumes.
The annual operating loss at the Ashdod refinery was NIS 69 million, compared with a loss of NIS 409 million in 2020. In the fourth quarter, the refinery made an operating profit of NIS 82 million, compared with a loss of NIS 110 million in the corresponding quarter.