Shlomo Eisenberg Increases Investment in Urban Renewal Amid Sector Downturn
Isras, controlled by Shlomo Eisenberg, has increased its stake in the urban renewal developer Yaaz to 10%, with a total investment of approximately 20 million shekels, despite market challenges.
Despite the difficulties in the sector, Shlomo Eisenberg is increasing his investment in the field of urban renewal. Isras, the income-producing real estate company controlled by Eisenberg (who holds 45% of the shares of Isras Holdings, which in turn holds 67% of Isras shares), which participated last year in the IPO of the urban renewal company Yaaz (Y.A.Z. Initiatives and Construction and Urban Renewal), has completed another move to increase its stake in it, reaching a 10% holding. This was done with a total investment reaching approximately 20 million shekels.
Yaaz, which is managed by Tomer Reifman and is controlled by the Yakuel family (40%) and Jeremy Blank's Community Fund (44%), completed its first IPO on the Tel Aviv Stock Exchange in August last year, raising 43 million shekels at a valuation of 212 million shekels pre-money and 255 million post-money. This is a lower valuation than the company aimed for when it began the IPO process, which stood at 300 million shekels. The relatively low valuation reflected the difficulties in the real estate market in recent times, with an emphasis on real estate in Tel Aviv, where it operates.
As of the end of March, the company had five projects under construction, in which 59 housing units are for sale — four of them in Tel Aviv and one in Holon. In the two projects whose construction is expected to be completed this year, it sold 86% and 100% of the housing units for marketing, but the gross profit margin in them is relatively low — 10% in the project in Tel Aviv and 5% in Holon. In the other three, whose construction is expected to be completed in 2027 and 2028, it sold only 30% to 38% of the housing units for marketing, and the expected gross profitability stands at 12% to 15%. In total, it is involved in 71 urban renewal projects in which the required majority among tenants has been achieved (over 66.7%), in which there are 1,284 housing units for sale.
Its revenues in the first quarter of 2026 reached 9.6 million shekels, compared to 8.7 million in the same quarter last year, a result of progress in construction and sales in projects under construction. However, its quarterly operating loss jumped from 400 thousand shekels to 3.2 million shekels, under the influence of rising construction costs, a jump in advertising expenses, and an increase in management expenses from becoming a public company. It ended 2025 with a 2% decrease in revenues to 49 million shekels and with an operating loss of 8.6 million shekels, compared to an operating loss of only 210 thousand shekels in 2024. In accordance with these results and the difficulties in the residential real estate sector in general, and with an emphasis on urban renewal in Tel Aviv, the company's stock has fallen by 27% since the IPO, and it is currently traded at a valuation of only 171 million shekels. In June, Y.A.Z. was warned by the stock exchange that if it does not act to increase its low public holdings by the end of the year from their current 7% rate to more than 12.5%, it will be transferred to the stock exchange's preservation list.
Isras first purchased shares of the company during the IPO, slightly less than 5% with an investment of about 12.5 million shekels. In February, it increased its holding with an investment of another 6.7 million shekels to 8.6%, and recently, as mentioned, it purchased additional shares and rose to slightly more than 10% with an investment of 2.5 million shekels. Isras deals mainly in income-producing real estate, and alongside this, it has historical activity in the residential sector. It ended the first quarter of 2026 with a NOI (Net Operating Income) of 120 million shekels, 1% higher than the same quarter. The Adjusted Funds From Operations (AFFO), which is considered the accepted measure for examining the profitability of income-producing real estate companies, rose by 3% to 88 million shekels.
Isras is not the only real estate company that is identifying opportunities in the residential real estate sector during this problematic period. At the end of May, the company Propdo purchased 49% of the shares of Oz Nadlan, which deals in urban renewal. In March, the real estate company Intergamma purchased control of the urban renewal company Dankner Kanlov for 30 million shekels, and in November last year, Mehadrin, controlled by Yitzhak Tshuva, purchased control of the company Pi Handasa, which also deals in this field in Tel Aviv, while at the same time Amram Avraham also purchased 50% of the urban renewal company Synco.
