Local real estate companies' investments jump 94% in 2007

The country's 50 largest real estate companies nearly doubled their investments in Israel and abroad.

By SHARON WROBEL
real estate logo 88 (photo credit: )
real estate logo 88
(photo credit: )
The country's 50 largest real estate companies nearly doubled their investments in Israel and abroad to a record NIS 203 billion in 2007, according to the results of a survey conducted by Dun & Bradstreet Israel. As a result, they are in a good position to weather the effects of the US subprime mortgage crisis and benefit from opportunities of a changing market, according to Dun & Bradstreet Israel CEO Reuven Kovent. "The subprime crisis, which led to a crisis in the capital markets and the real estate market, has nearly put a complete halt to raising capital by real estate companies as the financial market is making it more difficult to get credit lines," he said Sunday. "Besides financing difficulties, the value of property assets are on a global downward trend. As a result, large and strong real estate companies have also suffered over recent months from the downturn in prices. "However, large Israeli property companies are experienced and they have cash reserves and firm relationships with financial bodies and big global investment vehicles." Some local companies saw the downward trend in pricing as an opportunity to take risks in a move to increase their asset portfolio for real estate in Israel and abroad, Kovent said. The country's 50 largest real estate companies invested a combined NIS 203b. last year, up 94 percent from 2006, and their total equity increased 132% to NIS 61b, Dun & Bradstreet Israel said. Gazit Globe Ltd., which owns 160 commercial centers, was the country's top real estate company in 2007. It had investment assets of NIS 45b., up 28.5% from 2006, and raised its equity by 20% to NIS 16.6b. Delek real estate was No. 2 with NIS 24.4b., an increase of 284.4% over 2006. It was the fastest growing company in terms of investment assets among the 20 largest companies. Jerusalem Economic Corp. was ranked in third with NIS 18.4b. Electra real estate was No. 4 with NIS 10.4b. in 2007, up 131.2% from 2006. Africa Israel Properties was No. 5, up from No. 14 in 2006, as the value of its property assets grew by 266.7% to NIS 9b.