Hagag Brothers Sold 149 Apartments This Year, Generating One Billion Shekels
Despite market headwinds, the company marketed apartments at an average price of 6.7 million shekels. In Sde Dov, 65 units were sold, including 46 formal sales contracts. The company reported a recovery in July-August following a slowdown in the second quarter.
Hagag Brothers is a major player in the Israeli real estate market, primarily focusing on luxury apartments in the center of the country. Its performance serves as a barometer for the luxury housing sector.
How is the company navigating current market challenges and the Ministry of Finance's warnings regarding contract cancellations? In its latest report, the company stated: "During the reporting period and thereafter, we faced numerous challenges, such as a high interest rate environment, a growing supply of unsold inventory, regulatory restrictions on payment terms, security-related uncertainty, construction labor shortages, and the strengthening of the shekel, which increases costs for foreign investors."
Despite these obstacles, the company and its associate, Hagag Tzim Real Estate, marketed housing units with a total financial volume, including registration requests, of approximately 1.37 billion shekels.
From the beginning of the year until the report's publication, the company sold 149 apartments for a total of just over one billion shekels, averaging 6.7 million shekels per unit. In Sde Dov, 65 apartments were sold at an average price of 7.5 million shekels. In Sumail, 12 units were sold at 7.6 million shekels each, and in Bavli, 41 units were sold at an average of 7.6 million shekels. In Jaffa HaTzeira, one apartment was sold for 2.9 million shekels, alongside three land units in the Einstein area for a total of 2.9 million shekels.
Regarding the "wave of cancellations" noted by the Treasury, the company reported only one canceled contract worth 5.5 million shekels and six canceled initial joining requests. The company confirmed that these units have already been remarketed.
Excluding purchase requests, the company sold 102 apartments for approximately 646 million shekels, averaging 6.3 million shekels per unit. In Sde Dov, 46 apartments were sold year-to-date at an average of 7.2 million shekels. Only 3.5% of sales utilized 20/80 payment terms, and the company did not offer contractor loans.
In the first quarter, the company sold 54 apartments, compared to 31 in the second quarter. The value of signed contracts rose from 468 million shekels to 645 million shekels.
Quarterly revenues increased from 90 million to 113 million shekels, driven by actual sales and progress in the Sumail, Bavli, and other urban renewal projects, as well as the sale of 25 units in the Salame MOMA project. Net profit for the quarter rose from 12 million to 35 million shekels, though half-year profit decreased from 67 million to 50 million shekels.
