REAL ESTATE Israel has become a very small pond for local real estate developers, so over the past ten years most of the country's large real estate development companies have been busy promoting their activities overseas. Until recently, the majority of these activities were in established markets in the US, UK, Germany, Spain etc. Now, though some companies are still investing in Western Europe and North America, the bulk of these activities has shifted eastward to Central and Eastern Europe, to countries which were behind the Iron Curtain until the 1990's. In the future, Israeli capital may drift further east - to India, China and other countries in the Far East and the Pacific Rim, but for the moment East-Central Europe is the favorite. Ever since the fall of the Iron Curtain roughly twenty years ago, these former communist countries have been experiencing an economic and commercial renaissance. All the pent-up entrepreneurial energy suppressed during the preceding fifty years has exploded, and in the process a vibrant and affluent middle class has sprung up. Its purchasing power and standard of living are growing constantly. These people want better dwellings and better accommodation for their businesses, and Israel developers are happy to oblige. The Israeli companies have been involved in vast projects, building residential projects, industrial parks, commercial centers, shopping centers and more. To finance these monumental projects the companies have turned to the London Stock Exchange or other European stock markets, as well as European banks. Israeli development companies are vying with each other and with development companies from other countries to supply these needs. Other than the financial perspective, there are also cultural and geographical reasons for the affinity of Israeli companies to Central and Eastern Europe. More than half of today's Israelis hail from that part of the world or are descended from natives of those areas. Secondly, Eastern Europe is much nearer than New York or Florida. These factors, coupled with the greater demand and more lucrative yields in the region make Eastern Europe a prime choice for Israeli developers. In Romania, for example, there is a shortage of tens of thousands of residential living units in Bucharest and other leading cities, due to a demographic shift from the country to the towns reminiscent of changes in the West that took place after the Second World War. Among the Israeli developing companies taking advantage of these business opportunities is Aura Investments, which currently has nine ongoing residential real estate projects in Romania and Hungary, totaling 4,300 residential units. The company is investing over NIS 2 billion in a project which, when finished, will generate income of around NIS 3.2b. for a gross profit of some NIS 1.2b. Aura is also active in shopping centers in Romania. It has a joint company with local developers GTC, which is considered the largest operator of shopping centers in all of Romania, as well as in other Central and Eastern European states. In Romania alone, GTC and Aura have 30 shopping centers which operate under the brand name Galeria. They are also constructing two office towers in Romania in partnership with "Plaza Centers" a Romanian development company controlled by leading Hungarian-born Israeli businessman Moti Zisser. Another Israeli real-estate company with extensive interests in Central and Eastern Europe is Nanette, which specializes in residential building projects and whose shares are traded in London. Nanette operates in partnership with the US investment bank Lehman Bros. Nanette is considered one of the largest building companies in Poland and Hungary, and also has ongoing residential projects building projects in Romania, Croatia, and the Ukraine - altogether 27 building projects totaling 22,000 residential units. Europort is another Israeli real estate firm very active in the former communist countries of Central and Eastern Europe. EuroPort specializes in developing business parks. It was the progenitor of the very successful Airport City business park near the Ben Gurion International Airport and it is now using the Airport City model in developing similar projects in Central and Eastern Europe. It has built a similar park in Belgrade which it subsequently sold to local Real Estate company Africa Israel. It is in the process of constructing another such site in Odessa, Ukraine and is looking for land in Russia, Poland and Romania for the development of similar projects. In these projects it has gone into partnership with GTC, which recently acquired 20% or the company's shares for $62.5 million. GTC will also invest in Euroports's investments in the Ukraine. The Adama Real Estate company is another local real estate operator very active in Eastern Europe. It has 30 ongoing residential projects in Eastern Europe, mainly in Romania.