Effi Capital Sells Ra'anana Land Plot for NIS 194.2 Million in Leverage Reduction Move
Effi Capital has sold a residential land plot in Ra'anana for NIS 194.2 million to Shmuel Baruch Investments, generating a modest pre-tax profit of NIS 4 million while significantly reducing corporate leverage.
While reports often claim land prices are in freefall, recent transactions prove otherwise. Effi Capital Real Estate, led by Effi Shkedy, has sold its land plot in Ra'anana—acquired through an Israel Land Authority (ILA) tender last year—for nearly NIS 200 million, securing a profit. The buyer is Shmuel Baruch Investments Ltd., managed by Dvora Baruch.
The plot includes rights for the construction of 221 housing units and approximately 1,200 square meters of commercial space. Of the apartments, 177 are designated for the target price discount program ("Mechir Matara"), while 44 are destined for the free market.
Transaction Details and Financial Impact
Under the agreement, Shmuel Baruch Investments will pay Effi Capital NIS 193.5 million for the land component and development expenses, alongside reimbursing approximately NIS 700,000 in additional costs. Total expected proceeds for Effi Capital stand at roughly NIS 194.2 million. Effi Capital originally won the ILA tender on April 7, 2025, for about NIS 163 million, including development expenses. Despite the short timeframe, the company executed the sale primarily to reduce financial leverage.
According to company estimates, upon completion of the transaction, Effi Capital is expected to record a pre-tax profit of approximately NIS 4 million. Following the repayment of existing financing linked to the land, an estimated free cash flow of about NIS 47 million will remain at Effi Capital's disposal. This move will allow the company to reduce its debt burden and strengthen its financial flexibility.
Strategic Real Estate Management
"The transaction reflects our policy of active capital and asset management, adapting capital allocation to the progress rate and business potential of each project amid current real estate market challenges," said Effi Shkedy, Chairman and CEO of Effi Capital Real Estate.
"We continuously monitor the capital invested in each project, its expected return, and progress rate, while evaluating alternative options to strengthen existing capital and reduce leverage. In this case, an opportunity arose to realize the land at a price reflecting significant value appreciation," Shkedy added.
Dvora Baruch, CEO of Shmuel Baruch Entrepreneurship and Construction, noted that the company views Ra'anana as a strategic target characterized by rigid, stable demand and substantial growth potential.
"In an era marked by a scarcity of ILA tenders, the company proactively seeks business opportunities to expand and deepen its residential land bank. With 80% of the apartments designated for Mechir Matara winners, this acquisition reduces risk and increases certainty during these times," Baruch stated.
