Shoval Engineering CEO Prefers Projects Outside Tel Aviv
Yishai Rot, CEO of Shoval Engineering Group, discussed the company's strategy of focusing on housing projects priced up to NIS 3 million, primarily located outside of Tel Aviv. This focus stems from a desire to make homes more accessible to a wider audience, enabling buyers to afford the down payment and mortgage payments. Shoval recently expanded its operations by acquiring Isaac Stern, a construction company, for over NIS 200 million. Rot explained that this acquisition strengthens Shoval's execution capabilities and creates greater purchasing power for construction materials.
Rot highlighted that while many real estate companies are reducing risks, Shoval chose to deepen its involvement in execution. He noted that Shoval, originally founded as an execution company 41 years ago, has experience building non-residential projects and has recently expanded its residential execution arm. The acquisition of Isaac Stern, a company with a similar management culture, was a strategic move to quickly establish a robust execution division for external clients.
The company is experiencing strong demand in areas like Acre and the Krayot, with projects selling out quickly. Rot pointed to government-subsidized housing programs, such as 'Apartment at a Discount,' as particularly low-risk due to a significant portion of units being pre-sold. Shoval is also developing projects in Haifa and has a presence in Givatayim and Ramat Gan, while its activity in Tel Aviv is limited to a single project.
Regarding the company's stock performance, Rot acknowledged a significant drop since its IPO in January 2025, attributing it to general market sentiment and investor apprehension following the war. However, he believes the current stock price does not reflect Shoval's strong financial performance and operational control. He also emphasized the company's stringent safety protocols on construction sites, with personal involvement from management to ensure worker well-being.
Rot also commented on the broader market, suggesting that a reduction in the purchase tax for investors on second-hand apartments could stimulate the market and encourage Israelis to invest domestically rather than abroad. He believes this measure would benefit younger generations seeking to purchase homes and boost tax revenues.
