Migdal Invests NIS 451 Million in Ashtrom's Long-Term Rental Housing Business

Migdal Insurance and Finance is set to acquire a 20% stake in Ashtrom's long-term residential rental operations for approximately NIS 451 million. The binding memorandum of understanding values Ashtrom's rental activity at a net asset value of about NIS 2.26 billion. This deal highlights the growing involvement of institutional investors in Israel's expanding long-term rental market, driven by increasing difficulties for households to purchase homes.

Ashtrom was among the first Israeli companies to establish a dedicated division for developing and managing rental housing projects. Currently, the company owns over 3,200 rental apartments, primarily operating through government tenders and incentives that enable long-term leases and centralized management. Under the agreement, half of the payment will be made by the end of November 2026, with the remainder paid in inflation-linked installments through 2032. Both parties will also finance the equity required for future projects proportionally.

Ashtrom has committed that future projects it initiates will be executed within the partnership, with the company continuing as the executing contractor. Migdal also received a four-year option to purchase approximately 0.73% of Ashtrom Group's equity, representing a 35% premium over the share price at signing. Ashtrom Group Chairman Rami Nosbaum described the partnership as a vote of confidence from a leading institutional investor in the business model and growth potential. Migdal Insurance Deputy CEO Erez Madali added that the deal will enable the company to participate in significant national projects in high-demand areas and enhance its real estate investment portfolio. The detailed agreements are expected to be finalized by the end of July 2026.