Yohananof Prepares to Separate Real Estate Operations and Plans IPO
Retail chain Yohananof is planning to spin off its real estate assets into a separate subsidiary. This strategic move aims to create business focus and prepare for a future IPO, ultimately maximizing the group's asset value.
Following three major real estate deals carried out in the first quarter of the year, the retail company Yohananof is preparing for a significant strategic step of separating the chain's real estate into a separate subsidiary. Calcalist has learned that the matter has been discussed in recent weeks among the company's management, although it has not yet reached the board of directors for approval, and this may happen soon.
Upon the board's decision, the countdown is expected to begin for a future IPO of the real estate company, although the process may take many months and even years to maximize the increase in the volume of real estate assets in the group. The three deals significantly increase the volume of the group's real estate assets and bring it to a value of one billion shekels in investment real estate.
In January, the company purchased a land plot of 19 dunams in Dimona for 30 million shekels. The land is intended for the construction of a commercial center that will also include offices. A month later, it purchased 30% of a 17-dunam land plot in Binyamina together with the Shi Hai company, for the construction of a commercial center of 14,000 sq. m of commercial space and parking. At the same time, the company purchased together (50%) with the JTLV fund a land plot in Be'er Sheva of 10 dunams.
Even earlier, Yohananof entered into a large combination deal in Or Yehuda with a private partner for the construction of a commercial and logistics center on a huge area of 69,000 sq. m on a 31.5-dunam plot, with the partner bearing all construction costs of 280 million shekels, and upon completion of construction, the rights will be divided between the two partners. The deals were made at a relatively high pace and signaled the company's direction to deepen real estate activity and separate it into a subsidiary. The land in Or Yehuda is the largest asset of the real estate activity and is recorded at a value of 411 million shekels. In addition, less than a year ago, the company purchased agricultural land of 107 dunams to grow fruits and vegetables to be sold in its supermarket chain, while reducing supply costs associated with these sales.
Controlling shareholders in retail companies operate in the real estate sector in various ways. Rami Levy has a separate real estate company, which is a sister company to the retail company Shivuk HaShikma. Shufersal of the Amir brothers operates in the real estate sector through a subsidiary, where the activity is concentrated. Hatzi Hinam, like Rami Levy, operates in the real estate sector in a separate company, which is part of the reason for the conflict between the partners. Yohananof operates differently, and its real estate is part of the retail company and is embedded within it. Yohananof's idea is to operate in a format similar to Shufersal and establish a subsidiary that will concentrate the real estate assets as mentioned.
The Yohananof family chain, managed by the son Eitan, has 46 branches nationwide, on a total area of 193,000 sq. m, of which 98,000 sq. m are sales areas, and it is preparing to open 19 more branches, six of them in the coming year. In any case, Eitan Yohananof, who previously said that he does not rule out an IPO of the real estate activity, will be able to carry out the IPO when the activity is already concentrated separately in a subsidiary. The company's logistics center, its headquarters in Rehovot, and various lands and buildings will be injected into the new real estate company.
