“Israel, more than any other country in the world, has proven its resilience during the Coronavirus pandemic,” Ran Efrat, founder and owner of Efrat Investments recently said.
Efrat Investments, established in 1999, is a real estate development company with projects across Israel, the United States and Europe. Today, the company owns assets totaling some NIS 1.8 billion and maintains a growth rate of around 20-30% per year.
Efrat sat down with The Jerusalem Post to discuss the effects of the Coronavirus pandemic on real estate and the differences in the response between Israel and other countries.
“The pandemic shone a light on trends and sectors that would have perhaps happened naturally, but greatly accelerated them – from indoor retail and tourism, to the demand for logistics centers and residential real estate,” he said.
“But a good entrepreneur must always know how to adapt,” he added. “We don’t see the Corona [pandemic] as a game changer for the long run. It hasn’t changed our long-term strategies, because as we see it, a good entrepreneur has to know how to operate under fluctuating markets.”
As such, at the onset of the pandemic, with uncertainty over the market looming, Efrat’s company swiftly solidified its short-term strategies.
“We began employing short term tactics because the market changed on a daily basis,” he said. “Imagine you have to manage 500 apartments in up-and-coming neighborhoods in Madrid and then all of a sudden there is a lockdown and so you have to adapt, and quickly.”
As such, the company held day-to-day situation briefings and made daily managerial adjustments, most importantly strengthening its management teams abroad.
“We built an ability to operate in uncertain terms; and so, when there are times of uncertainty we blossom. We are very dynamic and are able to adapt and act fast,” he said.
Efrat, a married father of four, is no stranger to operating under uncertainty. Hailing from a military background, he served in a special commando unit trained in anti-tank warfare and as a major in the Israel Defense Forces. His experience and skills as well as his commitment to serving his country and the pursuit of excellence are today the driving force behind his company’s activities.
Moreover, he credits the company’s success during the pandemic to his handpicked small, dynamic and dedicated teams, mainly comprised of former IDF soldiers from elite units that share these same values.
“I see this as a mission, to employ workers from an IDF background and to mentor them so they too can develop into independent businessmen and entrepreneurs in their own right,” he said.
With regards to the Israeli real estate market, Efrat said that Israel was able to recover from the pandemic at a rate not seen in the rest of the world.
“In Israel we learned quickly to adapt and live alongside the coronavirus - it took around three months for the market to rebound,” he said. “I see the strength we have in Israel and the hard work of people is at a level that you don’t see in the world and so I think that Israel is on the right track not just in real estate but in every field.”
In contrast, Efrat said it took over a year for the market to rebound abroad in countries like Spain and Poland, and even today it still operates under uncertain terms.
He estimates that barring any new devastating variants, the real estate market in these countries will likely only fully rebound towards the end of 2022 or 2023.
“It is quite a strange phenomenon: In Israel we talk day to day about the coronavirus, but we still have a very strong market. Abroad, there is almost no talk about the pandemic on a daily basis, it doesn’t dominate the news cycle, and people live their lives quite normally, but in the business world there were many uncertainties,” he said.
As such, Efrat said that under times of uncertainty he likes to “go against the current.”
“When the market was scary and unclear, I took the time to renovate and prepare existing holdings and acquiring new opportunities in the market to prepare for the day after the pandemic,” he said. “We believed the market would go up and it did - by nearly 30%-40%.”
Efrat also noted that operating in both Israel and abroad, has allowed him the opportunity to take on “interesting and challenging projects.”
“Israel is a very competitive market, and you can’t always win the projects you want, so when you work abroad you gain a lot of experience and ideas and creativity that you can bring to Israel and vice versa,” he said.
“I am always looking to improve and to learn and develop. I try to learn something new every day,” he added.
So, looking to the future, Efrat aims to expand his knowledge and expertise to enter a new field of real estate – industry and logistics.
“I think this is the future of real estate and I am investing a lot of resources and time to become a player in this field,” he said.
“Ten or 15 years ago everyone wanted to own a mall, but today, when I look at my daughters, they do all of their shopping online. The world is becoming digital and all of this needs to be stored somehow,” he explained.
Efrat has already moved to focus on this sector in Spain, with a portfolio of some € 100 million and looking to expand to €350 million in 2022.
Within Israel, he has shifted his focus towards real estate for building logistics and industry centers, mainly in the North and South of the country. A move he sees as “building and strengthening the periphery,” according to the ethos of the company to combine business with values.
“As transportation develops, the North and South will strengthen, and I would like to take a position 10 to 15 years ahead of time,” he said. “Real estate is a field that you need a lot of patience for.”
And when it comes to the State of Israel, Efrat said that this past year has only strengthened his belief that Israel is the place to invest in long-term.
“The world is regressing but Israel is progressing, whether in high-tech or biotech or development and future world trends,” he said. “I see in Israel a place of strength and resilience, and I believe in Israel – this year has led me to believe in this all the more.”
This article is taken from The Jerusalem Post Annual Executive Magazine 2021-2022. To read the entire magazine, click here.
This article was written in cooperation with Efrat Investments