Migdal Insurance Buys 50% Stake in Three Forshkovsky Rental Projects

Migdal Insurance is acquiring a 50% stake in three large rental housing projects developed by Forshkovsky for NIS 700 million. Forshkovsky announced the deal, which was first reported by Calcalist on July 5. The three projects, located in Lod, Be'er Yaakov, and Ramat Gan, will comprise 800 rental units.

Forshkovsky will manage the properties and anticipates NIS 156 million in cash flow from the transaction, recognizing a profit of NIS 111 million. Migdal will pay NIS 301 million for the Lod project, which includes 286 units and 1,800 square meters of commercial space. The Be'er Yaakov project has 298 units, with Migdal paying NIS 330 million. The Ramat Gan project, consisting of 195 units and 700 square meters of commercial space, will cost Migdal NIS 66 million. The Lod project is complete, Be'er Yaakov is nearing completion, and the Ramat Gan project is in its early stages, explaining its lower price.

Migdal will also contribute approximately NIS 160 million towards construction costs. The deal was led by Erez Megedli, Migdal Insurance's investment manager. Migdal Insurance holds the largest real estate portfolio among Israeli institutional investors and has been expanding its focus on the rental housing sector. The company believes that the current slowdown in the real estate market and rising interest rates present long-term investment opportunities in quality assets in high-demand areas.

Prior to this acquisition, Migdal Insurance had already invested about NIS 600 million in partnerships for projects totaling 1,285 apartments and NIS 40 million in the Rent It fund, which operates in the rental housing market.