Pension fund investment: 330 million shekel deal in Canada
Phoenix and Menora, two of Israel's largest institutional entities, have partnered with BST Group to acquire a rental housing portfolio in Toronto for 332 million shekels. This marks the first step in a strategy aimed at a tenfold increase in assets.
The BST Group, a public real estate company controlled by the Tanous family, completed this week the first transaction under a new strategic partnership with the Phoenix Group and Menora Mivtachim. The three parties jointly acquired a portfolio of 487 rental housing units in Toronto for approximately 153 million Canadian dollars, about 332 million shekels.
This is not merely a real estate deal abroad; it represents a coordinated entry by two of Israel's largest institutional entities—managers of pensions and savings for millions of Israelis—into the North American rental housing sector.
The portfolio comprises three residential buildings, 16, 10, and 15 stories high, located in high-demand areas of Toronto near major employment hubs. Occupancy rates range from 97% to 99%, with an aggregate annual income of approximately 9.5 million Canadian dollars (about 21 million shekels).
Operations are led by BST Canada, a wholly-owned subsidiary managed by Alaa Tanous. With over 25 years of experience in Toronto, the company handles the entire value chain, from identification and underwriting to acquisition and management. This local presence enables Israeli institutional entities to access the Canadian market without the need to build operational capabilities from scratch.
The partnership, LP Capital Velmont, launched in January 2026, features an equal 33.3% stake for each party. An initial equity framework of 160 million Canadian dollars (about 350 million shekels) has been established, intended to support the acquisition of assets totaling 450 million Canadian dollars (about 1 billion shekels).
The current deal involved an equity injection of 63 million Canadian dollars (about 140 million shekels), with the balance leveraged through debt. While this increases potential return on equity, it also heightens sensitivity to interest rate fluctuations.
BST Canada aims to expand its multifamily portfolio to over 5,000 units. For Phoenix and Menora, this provides exposure to income-generating assets in a stable, diversified market. However, investors should note that leveraged real estate investments abroad carry currency and interest rate risks.
Rafi Bisker, Chairman of the BST Group, stated:
"The activity in Canada, managed by Alaa Tanous, is a key growth engine for the BST Group. The partnership with Phoenix and Menora is a significant milestone. This deal marks the beginning of a joint venture that reflects BST Canada's ability to build a high-value platform for the coming years."
Alaa Tanous, CEO of BST Canada, added:
"This deal is another step in realizing our growth strategy. The trust shown by leading institutional entities validates the platform we have built and provides a solid foundation for further expansion and new investment opportunities."
