Avi Jacobovitz, CEO of the real estate giant Gav-Yam, told Maariv that lease agreements were signed with 12 of the world's leading tech companies and negotiations are now longer and more complex, but that's not connected to the judicial reform; in other words; business hasn't gone anywhere.
Regarding the crisis in the hi-tech sector, he added that last year was challenging for everyone and no company was spared. Gav-Yam paid attention to the commotion of the market and fluctuations in the hi-tech industry that affected the real estate sector.
Despite this, research and development centers of major tech firms will continue to be in Israel for many years. This is reflected in the agreements signed with those companies. Israel was and will remain a tech power that relies on human capital from the best in the world, Jabovitz said.
When you connect the tech power in Israel with major firms, this won't change, and there's no connection to news such as the proposed judicial reforms.
Regarding the effect of layoffs in the industry on rent, Jacobovitz said that in some international companies there weren't any layoffs. Only tens to hundreds of employees were fired and the number of employees returned to the levels seen two years ago. Layoffs don't affect rents on their properties.
The increase in interest rates
Concerning interest rate increases, Jacobovitz said that Gav-Yam prepared a revenue forecast and stated that income will increase from NIS 555 million by another NIS 80 million.
Gav-Yam completed four projects in 2022 and continuously monitors interest rate increases. In 2022, the company completed three rounds of fundraising amounting to NIS 2.5 billion. The compounded linked interest rate is only 1.3%. One-third of the total debt, which stands at NIS 7.5 billion, is in shekels and not indexed. The rents in the contracts are linked to the index and are the firm's strongest security cushion.
Jacobovitz also stated that despite the sharp increase in interest rates, the external appraisers didn't see any need to change the capitalization rate which is 6.3%, and to make a reduction in the value of the holdings.
Gav-Yam is controlled (87%) by Properties and Building which is controlled by Discount Investments through Mega Or and Alco. Profits in 2022 amounted to NIS 930 million, compared to NIS 1.09 billion in 2021.
Jacobowitz's annual salary is NIS 4.7 million, which includes a bonus of NIS 1.6 million. Eldad Persher, former CEO of Bank Mizrahi Tefahot, is chair of the Board of Directors and earned NIS 3 million.