Migdal Invests NIS 451 Million for 20% Stake in Ashtrom's Long-Term Rental 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 between the two companies values Ashtrom's rental business at a net asset value of about NIS 2.26 billion. This deal highlights the growing involvement of institutional investors in Israel's long-term rental market, which is expanding amid increasing difficulties for households to purchase homes.

Ashtrom was among the first Israeli companies to establish a dedicated division for developing and managing rental projects. Currently, it holds over 3,200 rental apartments, primarily operating through government tenders and incentives that facilitate long-term leases and centralized management. Under the terms of 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 in proportion to their ownership shares.

Ashtrom has committed that future projects it initiates will be executed within the partnership framework, with the company continuing as the executing contractor. Additionally, Migdal 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.

Rami Nosbaum, Chairman of Ashtrom Group, described the partnership as a "vote of confidence from a leading institutional entity in the business model and growth potential of the sector." Erez Magdali, Deputy CEO of Migdal Insurance, stated that the deal will enable the company to "participate in significant national projects in high-demand areas and continue enhancing our real estate investment portfolio." The detailed agreements are expected to be finalized by the end of July.