Yohananof Completes Real Estate Separation to Separate Entity

Supermarket chain Yohananof has finalized its plan to separate its real estate holdings from its retail operations. The company, controlled by the Yohananof family, has signed an agreement to transfer its property assets, excluding one location in Dimona, to a wholly-owned subsidiary, M.G.L. Kochav Modi'in.

This separation is intended to facilitate a future initial public offering for the subsidiary, should the company decide to pursue it. In exchange for the property transfers, Yohananof received shares in the subsidiary, valued proportionally to the assets transferred. The move is part of a restructuring aimed at benefiting from tax exemptions and reduced acquisition taxes.

The transaction involves 14 real estate properties valued at 1.1 billion shekels, which are classified as fixed assets and investment properties serving the company's retail activities. Yohananof's debts and loans are not being transferred with these properties. Concurrently, long-term lease agreements were signed for four properties used by the supermarket chain in Rehovot, Kiryat Ekron, Modi'in, and Ma'ale Adumim, at market-rate rents.

A service agreement was also established, whereby Yohananof will provide management, legal, accounting, office, construction, and property management services to the subsidiary for a monthly fee. Yohananof anticipates no significant impact on its financial reports for the third quarter or overall company results due to this asset transfer.

The separation follows a series of property acquisitions by Yohananof in recent years, including land in Dimona and Nes Ziona, and a deal for a development project in Or Yehuda. The Yohananof chain currently operates 47 branches nationwide, covering 201,000 square meters, with 102,000 square meters dedicated to sales areas, and plans to open 19 additional branches.