Developer Faces Insolvency, Delays in Beersheba Affordable Housing Project

A major affordable housing project in Beersheba, developed by A.S. Yagel, is facing significant delays and financial distress, with the company entering insolvency proceedings. The project, which has been in development for four years and includes 220 apartments, 102 under the government’s affordable housing scheme, will not be completed on schedule. Partial refunds have been issued to some buyers amid growing concerns about the project's viability.

The developer, owned by Ra'anan Halili through Ofek Sheli and Shlomo Avitan, won the land tender in April 2022 for a site in the Ramot neighborhood, paying 10,272 shekels per square meter. Financial backers include Kavan Financing Solutions Ltd. and Sh. Shlomo Insurance Company Ltd. However, creditors claim the company owes approximately 64 million shekels, and a temporary receiver has been requested by creditors through the Tel Aviv District Court.

The court filing highlights fears of contract cancellations with the Israel Land Authority due to the inability to meet the January 2027 completion deadline. It also notes internal shareholder disputes hindering project management, market challenges such as falling housing prices and high interest rates, and legal claims against the developer and financiers. Additionally, Mercantile Bank has filed a separate insolvency request over another project, citing a debt of about 181 million shekels. Total debts across all projects may reach hundreds of millions of shekels.

Judge Iris Lushi-Avudi of the Tel Aviv District Court has ordered that the two insolvency petitions be handled jointly after receiving responses, including an urgent reply from the developer. The situation casts doubt on the future of the affordable housing project and raises concerns for buyers and creditors alike.