Africa Israel Residences to Spin Off 1.1 Billion Shekels in Assets
Africa Israel Residences is reorganizing its business by spinning off 1.1 billion shekels in income-producing assets into a new sister company, aiming to unlock value.
Africa Israel Residences, one of Israel's most prominent and longstanding real estate companies, is advancing a significant structural reorganization. The company's board of directors has decided to spin off its income-producing real estate assets into a newly established sister company, with shares to be distributed as a dividend in kind.
Asset Valuation and Portfolio Transfer
Under the planned reorganization, three key rental housing projects will be transferred to the new entity, alongside commercial and employment spaces located within existing and planned residential developments. Based on the second-quarter financial reports, the total value of the transferred assets stands at 1.1 billion shekels, with the net asset value after liabilities estimated at approximately 450 million shekels.
The assets designated for the spin-off include the newly occupied rental housing project in the Arnona slopes of Jerusalem, as well as two upcoming rental projects slated for Sde Dov in Tel Aviv and the Hebrew University's Mount Scopus campus in Jerusalem. Additionally, commercial and employment areas across several ongoing and planned projects in cities such as Modiin, Tel Aviv, Azor, Herzliya, and Givat Shmuel will be integrated into the new corporate structure.
Strategic Rationale and Leadership Comments
Ronit Ashd Levi, CEO of Africa Israel Residences, commented on the strategic shift: "Africa Israel Residences is a leading company in Israel's residential sector. Over the years, we have expanded our operations and built significant additional business pillars alongside our core residential development. The rental housing and income-producing real estate sector has matured and reached a scale that allows it to operate independently and continue its growth path."
The move we are advancing is a natural step in the company's evolution, reflecting the strength, expertise, and capabilities built over the years. Both companies will operate as focused entities, each with a solid business foundation and clear specialization.
Management from the Lapidoth Group added that the reorganization is a strategic milestone designed to optimize the value and potential of distinct operational sectors. By creating two specialized firms, the group aims to unlock new business opportunities and maximize shareholder value while maintaining robust financial resilience.
