Ashtrom in Talks to Sell 20% Rental Housing Stake to Clal Insurance
Ashtrom Group is negotiating the sale of a 20% stake in its rental housing division to Clal Insurance at a 2.26 billion shekel valuation, mirroring its recent deal with Migdal Insurance.
Ashtrom Group is currently in advanced talks with Clal Insurance Enterprises Holdings to sell a 20% stake in its residential rental division under the same terms previously agreed with Migdal Insurance, according to market reports.
The negotiations are valuing Ashtrom's rental housing activity at 2.26 billion shekels. These consecutive transactions highlight how the broader real estate market slowdown has boosted the strategic standing of build-to-rent development over traditional for-sale housing, allowing companies like Ashtrom to unlock substantial value.
Transaction Details and Migdal's Agreement
In May, Migdal Insurance signed a definitive agreement to acquire a 20% stake in Ashtrom Residential Rental for 451 million shekels, based on a pre-money valuation of 2.26 billion shekels. While that deal was formally signed, its final financial closing was scheduled to be completed recently, prompting Ashtrom to announce a 30-day extension.
Under the terms of the Migdal transaction, the insurer is set to pay half of the consideration upon completion and the remainder in installments running through the end of 2032. Additionally, Migdal received an option to be allocated a 0.7% stake in Ashtrom Group, the publicly traded parent company, at a 35% premium over the market share price at the time of the agreement.
Institutional Strategy and Portfolio Scale
Migdal manages the largest real estate portfolio among Israeli institutional investors and has actively expanded its residential rental footprint over the past two years. Head of investments Erez Migdal noted that market headwinds and higher interest rates have opened long-term investment windows in prime urban locations.
For Clal Insurance, partnering in residential rental platforms is a more selective strategy, following its 2024 acquisition of a 49% stake in Acro Real Estate's rental housing division. Ashtrom Residential Rental currently maintains a robust pipeline of 3,200 apartments across various stages, including operational properties, assets under construction in cities such as Haifa and Jerusalem, and units in early planning phases.
Financial Performance and Debt Management
Ashtrom Residential Rental reported revenues of 115 million shekels in 2025, alongside a sectoral profit of 230 million shekels driven largely by fair value gains. Net Operating Income reached 91 million shekels, up from 74 million shekels in the previous year.
The company carries a financial debt of 2.7 billion shekels against a balance sheet of 5 billion shekels. The capital injections from institutional partners Migdal and potentially Clal are designed to deleverage the balance sheet and optimize debt ratios for the parent company, controlled by the Nussbaum, Giron, and Meshorer families.
