Efi Nitzanim Boosts Housing Sales, Net Profit Soars to NIS 512 Million
Translated & summarized from Ice by baba
Efi Nitzanim reported a third-quarter net profit of NIS 512 million, a 15.4% increase year-over-year, driven by improved project performance and new acquisitions. The real estate company is significantly expanding its residential sales operations, with plans for approximately 5,800 housing units across multiple countries. CEO Avi Barzilai highlighted the company's strategic focus on growth, diversification, and profitability, projecting substantial increases in Net Operating Income and Adjusted Funds From Operations in the coming years.
The story in 5 lines · by baba
- Efi Nitzanim's third-quarter net profit rose 15.4% to NIS 512 million.
- The company is increasing its focus on residential sales, planning 5,800 housing units.
- CEO Avi Barzilai expects significant growth in NOI and AFFO by 2026.
- The company is divesting non-core assets, including a Bulgarian office park for €35 million.
- Land for 1,700 units is under construction in Tel Aviv, Warsaw, Prague, Belgrade, Bucharest, and Sofia.
Efi Nitzanim, a real estate company, has significantly increased its focus on residential sales, a sector typically associated with Africa Israel Residences. The company reported a substantial net profit of approximately NIS 512 million for the third quarter, marking a 15.4% increase compared to the previous year. This profit growth is attributed to improved project performance, the acquisition of new projects, and the completion of projects expected to contribute significantly in 2025.
Despite challenging market conditions, including high interest rates affecting demand, particularly for offices outside Tel Aviv, Efi Nitzanim is expanding its residential development activities. The company currently owns land designated for approximately 5,800 housing units across its operating regions. Additionally, around 1,700 units are in various stages of planning and construction in cities such as Tel Aviv, Warsaw, Prague, Belgrade, Bucharest, and Sofia. Efi Nitzanim's strategy includes selling many of these apartments internationally.
The company estimates a gross profit of about 27% from these residential projects, translating to NIS 504 million over the next five years. The Net Operating Income (NOI) for the third quarter reached approximately NIS 300 million, an 8.3% rise from NIS 277 million in the same period last year. The company anticipates its annual NOI to reach NIS 1.23 billion with the full occupancy of recently completed projects and projects under construction are expected to push the annual NOI to NIS 1.52 billion.
Adjusted Funds From Operations (AFFO) also saw a 19% increase, reaching NIS 142 million in the third quarter compared to NIS 119 million last year. The annual AFFO rate is currently around NIS 570 million, with projections to reach NIS 594 million and eventually NIS 746 million upon completion of ongoing projects. The company is also strategically divesting from non-core assets, such as the sale of the Varna office park in Bulgaria for €35 million, to focus on its core activities and diversify income streams.
CEO Avi Barzilai stated that 2026 will mark a new phase of expansion for the company, with growth in assets and revenues across all sectors. He highlighted that the company's yielding assets now exceed 1.5 million square meters, with NOI surpassing NIS 1.2 billion and AFFO nearing NIS 600 million annually. Barzilai emphasized the strategy of diversifying income sources and enhancing the company's operational mix, particularly through the expansion in residential sales due to its high profitability.
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