Yohananoof Supermarket Chain Moves Real Estate Arm to Subsidiary

The Yohananoof supermarket chain, managed by Eitan Yohananoof, has advanced its organizational restructuring by transferring its real estate assets to a wholly-owned subsidiary, "L.G.M.L Kochav Modi'in." This move consolidates 14 real estate properties, including fixed assets and investment properties serving the chain's retail operations, under the new entity. The total value of these assets is approximately 1.1 billion shekels, with a fair value and reduced ownership cost of around 1 billion shekels.

The decision, approved by the board on August 19, follows a significant acceleration in Yohananoof's real estate activities over the past year. Management stated that concentrating these assets aims to enable focused management of the real estate arm, provide superior financial and business flexibility, and allow the capital market and the public to better analyze and price the retail and real estate operations separately. This structure deviates from Yohananoof's previous model, where real estate was directly integrated within the retail company, unlike competitors such as Rami Levy and Shufersal, who have separate real estate entities or subsidiaries.

The transfer is structured as a tax-exempt reorganization, avoiding income and capital gains taxes, with reduced property acquisition tax. Transfer expenses are deemed immaterial. No debts or loans associated with the transferred assets are being moved to the subsidiary, which will assume all related income and expenses from the transfer date. Long-term lease agreements at market rates have been signed for properties the chain continues to use.

The transaction is subject to certain technical conditions, including the assignment of rights in agreements with co-owners of some properties. The asset transfer is not expected to alter Yohananoof's consolidated financial statements. The establishment of the subsidiary lays the groundwork for a potential future stock exchange listing of the real estate arm, an option previously mentioned by CEO Eitan Yohananoof, citing Rami Levy Real Estate's 4.5 billion shekel valuation as a precedent. In 2026, Yohananoof engaged in several notable real estate transactions, including land acquisitions and partnerships.