Boni Hatikon Partners with Ampa in Two Jerusalem Urban Renewal Projects Amid Real Estate Slowdown
Boni Hatikon, a residential real estate developer focused on urban renewal, has entered a partnership with Ampa Group, which will acquire a 49% stake in two of Boni Hatikon's projects in Jerusalem and its surrounding area. The deal, valued at 83 million shekels, involves Ampa paying 53 million shekels for rights in the regional project and 23 million shekels for the Jerusalem project, plus an additional 5 million shekels to cover its share of a shareholder loan provided by Boni Hatikon. Boni Hatikon expects to recognize a pre-tax profit of 135 million shekels from the transaction, including 65 million from selling part of its stake and 69 million from revaluing its holdings.
The regional project plans to replace 368 existing housing units with 1,274 new units, allowing 906 units for sale. The Jerusalem project, located in the Armon Hanatziv neighborhood, will clear 105 apartments to build 518 new units, with 413 units available for sale after allocating 18 for a maintenance fund supporting residents' building upkeep costs. Both projects are in detailed planning stages, with building permits expected by late 2027 or early 2028, meaning sales are still some years away. Boni Hatikon estimates total revenues of 2.2 billion shekels for the regional project and 1.1 billion shekels for the Jerusalem project, representing its highest revenue potential.
The partnership reflects challenges from the residential real estate slowdown and rising interest rates, which have pressured companies’ cash flows and increased financing costs. Boni Hatikon, controlled by Amihai Peretz (49.5%), currently has seven projects under construction with about 880 units out of 1,800 units across 11 projects in various stages. Sales have declined from 130 units in 2024 to 116 in 2025, and further dropped in early 2026. However, a marketing campaign for a project in Kiryat Moshe, Rehovot, boosted second-quarter sales to 74 units, up from 22 the previous year. This project includes 429 units, with construction expected to start this year.
Due to the sales slowdown, Boni Hatikon has offered buyers financing incentives, with 85% and 87% of 2024 and 2025 sales respectively under deferred payment plans (20/80 or 15/85), delaying revenue recognition and increasing financing costs to 12.9 million shekels in 2025. The company noted that bank financing alone is insufficient to cover construction costs, requiring additional funding sources or higher financing costs. Cash flow from operations turned negative in Q1 2026 by 45.6 million shekels, compared to positive cash flow the previous year, while financing expenses surged 88% to 17.5 million shekels, resulting in a net loss of 7.8 million shekels, more than double the prior year’s loss. The annual loss deepened from 11.5 million shekels in 2024 to 21 million in 2025.
Boni Hatikon’s stock has risen 25% this year to a market value of 692 million shekels, outperforming the Tel Aviv Construction Index, which fell 2%. Last year, it brought Clal Insurance as a partner in several projects with potential investments up to 250 million shekels. Ampa, primarily active in income-producing real estate and also in development and credit provision, was listed last year and currently trades at a market value of 3.4 billion shekels, down 18% this year.
