"The manpower situation in the industry without Palestinian workers is better - our output has increased by 30%"

"The manpower situation in the industry is better from our perspective than it was even before the war. Although wages have risen, our output has increased, by a rough estimate, by 30%. A workday with Palestinian workers would start at 6:30, with workers who got up at 4:00 in the morning to arrive on time at the construction site, and by 16:00 at the latest, they would already start packing up the equipment.

"They also celebrated Muslim holidays and were on leave during Jewish holidays as well. Today that does not exist: today the site opens at 6:30, 6:45 at the latest, and closes at 19:00, and they work on Fridays too. I am not even talking about the safety and quality that have improved immeasurably - therefore, from our perspective, the current situation is significantly better than what was before."

So says Zeev Salant, co-CEO of Omer Handasa, a veteran construction company in the real estate industry that went public at the end of 2025 and is now developing in the field of entrepreneurship as well. As a company that has been operating for four decades in the field of construction, its leaders have rich experience in both significant changes and major crises that the industry has faced.

Omer Handasa is still led today by its three founders - Salant, Chairman Israel Rosenblatt, and Baruch Hadad, who serves as the second co-CEO. Salant and Rosenblatt studied engineering together at the Technion and established a structural design office, and later Omer Handasa. Shortly after the company was founded, Hadad also joined.

Hadad also elaborates on the manpower crisis issue and says: "I see a blessing in the change taking place regarding manpower and the transition to foreign manpower. They have quite a few advantages: the quality, the amount of management personnel that needs to be engaged in the field to get the required quality, and the construction time - all these bring the projects, in my opinion, to a state where they are even more economical than they were in the past. Even today we are still in a shortage, and there are not enough workers, but if this trend continues, the construction industry will be significantly upgraded."

Omer Handasa

Field of activity: construction, real estate development (residential and urban renewal), income-producing real estate

Activity: established in 1986 and went public in December 2025

*As of the end of May 2026

Since the war, we have been hearing many factors in the industry talking about the inefficiency of Palestinian workers. Why didn't we hear about this before?

"There was no other option," says Salant. "For many years, the Contractors Association and the various contractors' organizations tried to reinforce foreign manpower, but the state did not respond positively to this. Israeli workers, with all the good will and the multitude of attempts, do not enter the industry. We were trapped with the Palestinian workers. Until the war broke out and the entry of Palestinian workers was stopped, the government did not allow us to bring in quality foreign manpower, that was the given situation."

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Crisis in the industry

"The state does not see the objective difficulties"

The real estate industry has known very severe crises, perhaps ones it had not seen before, following the events of October 7, 2023, and what happened as a result. The manpower crisis is one of the central ones among them - as the entry of tens of thousands of Palestinian workers was prevented at once, and so was the raw materials crisis, which also became more expensive (in accordance with the global trend) and also became less available due to the export boycott to Israel imposed by Turkey.

"The war and the crises that followed it - these were certainly not easy hurdles at times," says Hadad. "It was very difficult to meet the original schedule, and the state does not really see the objective difficulties and does not recognize them: the state stops the industry for a few months, and no one wants to take this event into account. The industry simply did not work, the teams and the staff, all the activity of the construction companies - things that cost a lot of money - everything stopped in those days. In the end, things roll onto our doorstep, and this is reflected in the level of profitability and the problems we have to overcome. But we went through it, and we are still going through it."

In the first days of the war, it looked like a huge shock to the industry.

"When everything was closed, it was very difficult for us to meet the schedules," says Hadad, "but we stood and overcame the difficulties in almost every project. We succeeded, but it cost us a lot of money and a lot of overtime hours. The free time is shorter, you need to reinforce the manpower, request night work permits. This puts the project under pressure, with an amount of workers whose management becomes more problematic, and the output per project on average becomes lower - but we did everything in our power to meet the schedules, and we succeeded. A construction company needs people with a lot of experience and a lot of calluses on their hands to overcome the crises."

Salant adds: "Our advantage is our good name: even when there was a severe shortage of workers at the beginning of the war, the workers who were here came to us - because for a subcontractor, two things are important: that they get paid, and that they get paid on time. If you do that, he is loyal to you, and that's how it was. Therefore, we also managed to close the gaps, and the delays in the schedules are in a few isolated projects, and for a few months only."

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Public sector

"State tenders? You are busy with battles"

Throughout its four decades in the industry, Omer Handasa relies mainly on projects in the private sector. Thus, it was recently chosen to execute the Gate project in the entrance district of Jerusalem, with a scope of about 480 million shekels, and a residential project in Acre with a scope of about 1.2 billion shekels. The company emphasizes that they work only on "mega-projects" and not on small projects: "If they come and offer a project for 50-60 million shekels, we won't take it," declares Salant. "It's too small for us."

It is not by chance that we emphasize here the work with the private sector: Omer Handasa, like quite a few construction companies from which we have heard similar statements mainly in recent times, prefers to avoid as much as possible tenders in the public sector.

"In public tenders, whether it is for local authorities or for the state, most of the time the factor that determines if you won the tender is the price," says Salant. "Companies that want to win enter at a very cheap price, and aim to achieve their livelihood through changes and additions, which in practice means a war with the client all the way. We are not there. We are in the private market, with very intelligent and wise clients, who know that if their project is completed on time, with the appropriate quality, within the budget and at the right safety level, it is better for them. There is no shortage of such clients, who have no interest in fighting with the contractor all the way.

"We have done projects for the state here and there in the past, for example a project for the Prison Service, but in this case it was a project that required both planning, licensing, and execution, and there it was possible to express all our engineering capabilities and not just the price. We went for it and won, the project was completed on time and everyone was satisfied. Our way to improve profitability is not fighting with the client, but optimizing planning and execution. If we fight with the client, he will not order the next job from us. The client is, from our perspective, a partner on the way to reach the result desired for him and for us."

So it's just not profitable?

"When we touched on public tenders, a little, we did not see the fruits of our labor," adds Hadad. "You work hard and you don't earn enough. There are contractors who specialize in this event, and are not excited by the low price at the beginning, know how to achieve the right profitability for them in the end - but in our eyes, it is both taking a risk and not enjoying the way. You are not busy with engineering at all, but all day with battles."

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IPO

"Working very hard on development and its expansion"

In December 2025, Omer Handasa completed its first public offering, and today, a little more than half a year after the IPO, the company's market value is more than two billion shekels, and the return from the IPO is about 68%. Since its establishment, it has executed hundreds of projects all over the country, and today it deals with three main areas: construction, development - for residential and urban renewal - and income-producing real estate. The company also has a subsidiary, Gilmor, which executes small projects and specializes in finishing works.

According to the summary report for 2025, the company's revenues as of today come mainly from the construction contracting field - about 583 million shekels compared to about 73 million shekels in revenues from the residential real estate development field and another about 8 million shekels from the income-producing real estate field. One of the goals of the company's IPO is to allow it to strengthen and expand activity in the field of residential construction development, including urban renewal.

"We started dealing with development long before the IPO, but in relatively small volumes," says Gideon Kahlon, CFO of Omer Handasa and the one responsible, alongside Israel Rosenblatt, for the development activity in the company. "In recent years we have built a very significant portfolio, but as is known, development is something that takes years, especially urban renewal.

"Today we have about 13-14 projects in urban renewal, and also development projects, and once we reached the stage where the projects already require equity and investments of relatively large sums of money, this was one of the considerations in going public: to raise funds so that we reach the stages of investing the money not under pressure, when we know that we have a cash fund that can serve the development projects, so that we will be stronger in front of the banks in negotiations, and to allow us to open a window for activity with the institutional market."

Is the aspiration to reach a situation where development even exceeds construction?

"It is true that we see today mainly construction activity in the numbers," says Kahlon, "but we do see in the vision forward a development of our development activity, which will also be reflected in our reports, in our results, and will bring significant fruits - not in half a year, but in five, six or seven years ahead. There will be a lot of development activity that will be added to the construction activity and will expand the volumes of activity. The construction activity will of course continue to be significant, it is a very strong and significant force in the company and it will continue to be a very significant share. Regarding the ratio between the volumes of development and construction - time will tell. We are working very hard on development and its expansion."

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Safety

"We monitor things with technological means"

Another important issue, at the core of the construction world, is work safety at construction sites. Even though the struggle on the subject is receiving increasing resonance, the data on the ground is still high. For example, in 2025, 47 workers were killed at construction sites, in 2024, 37 workers were killed, and in 2023, 44 were killed - this even though in different periods in each of these years the construction industry did not work at all due to the security situation.

"We place a very great emphasis on the subject of safety in the company," says Salant. "One of the things we do and that does not happen in any other company is a safety test that we conduct for all company employees, twice a year, before Rosh Hashanah and before Passover.

"It is a test that is open to everyone, and those who answer correctly win cash prizes, of thousands of shekels. This has already become a tradition and creates a big 'buzz', everyone learns the safety regulations and goes over the material ahead of the test. This is our approach. We are very strict about this matter, and in our eyes, it is the most important thing of everything we talked about: that everyone who arrives in the morning at the construction site, returns at the end of the day healthy to his home.

"We work in a problematic, dangerous industry. It's not like sitting in an office at a bank. The risks are many, it is a daily war, all the way. But with everything that is happening around, safety is only improving. If once we had to insist with the workers on safety shoes and protective helmets, today it is no longer there. We monitor things with technological means, there are safety officers and safety coordinators, and every safety case is reported directly to the three of us, the heads of the company. The subject is handled continuously and closely, and we are strict about the small as well as the large."

"The projects, in the country in general and with us in particular, have become more complex with much more substantial dangers than what was 20 and 30 years ago," adds Hadad. "Working at height, building architectural monuments, it is impossible to prevent all cases 100%, but you have to come and try to prevent 100%, because every injury and every loss of human life, God forbid, is a whole world. You have to make this message sink in, and everyone in our system needs to understand that safety comes before everything."

Does the entry of foreign workers have an impact on the matter?

"Yes. Once we switched to foreign manpower, the subject improved immeasurably, because they are more disciplined. With foreign workers, the subject is easier to control," concludes Salant.