Hagag Group Secures Extension to Meet Sales Targets for Tel Aviv Luxury Project

Hagag Group has received an extension to meet the banking conditions tied to its luxury residential project Masterpiece Bavli (Bavli 3) in Tel Aviv. The project is financed by Bank Hapoalim and Bank Mizrahi-Tefahot. The banks have so far provided credit totaling 270 million shekels, within an overall credit framework expected to range between 335 million and 388 million shekels. The final credit limit depends on early sales volume and equity injection, with a key condition requiring a minimum sales threshold of approximately 434 million shekels to unlock the full credit line.

Although Hagag has signed sales agreements worth about 549 million shekels, exceeding the target, the banks have not yet recognized the entire amount for compliance purposes. This is because sales agreements totaling around 381 million shekels are currently excluded due to possible buyer cancellation rights or insufficient buyer equity contributions below 15% of the transaction value.

Under the new agreement, the deadline for meeting the banking conditions has been extended from July 19, 2026, to December 31, 2026. The updated minimum sales target to fully open the credit line is now set at 483 million shekels, with at least 15% of the sales proceeds already paid. Sales agreements with cancellation clauses will be counted if they are linked to obtaining a revised building permit. The banks also agreed to increase the credit line by 30 million shekels to 300 million shekels, while Hagag increased its equity contribution by 5 million shekels to 211 million shekels.

Until the conditions are met, all funds received from apartment buyers must be held in an escrow account controlled by the banks, and Hagag cannot use these funds for construction without bank approval, except for agreed uses. If Hagag meets the updated sales threshold by the end of 2026, it will be considered compliant and eligible for the full credit line. Failure to meet the target may lead the banks to cancel their credit commitments and demand immediate repayment of the credit already extended.