Menora Mivtachim Lends 200 Million Shekels to Tel Aviv Renewal Firm Amid Housing Market Split
Despite a slowdown in Israel's residential real estate sector and urban renewal projects, institutional investors continue to fund companies specializing in evacuation and construction. Recently, insurance company Menora Mivtachim extended a 200 million shekel credit line to private urban renewal firm Eco City, controlled by Reality Fund and partners including Ilai Bar and Dudu Reshef. This financing deal adds to a series of institutional investments in the sector.
Eco City, primarily active in Tel Aviv, recently acquired a construction company with an unlimited G5 contractor classification to expand its independent execution capabilities. Ilai Bar, co-CEO of Eco City, explained in an interview that the decision to provide credit during a complex market period was based on the company's strong performance and a nuanced understanding of the market beyond media headlines. He noted a growing divide between companies struggling to sell and those continuing to close deals, with larger firms consolidating their market position by managing the entire value chain from planning to sales.
Bar highlighted that Tel Aviv's housing market is increasingly segmented, with most buyers purchasing homes to live in rather than invest. After years of hesitation, buyers are returning but are more selective, prioritizing quality planning and developer execution over price alone. He pointed out that while some market players face price drops, others maintain or even raise prices in prime locations. For example, Eco City is negotiating a penthouse with a direct view of Yarkon Park at about 100,000 shekels per square meter, a price not seen even in better years.
The company reported a 30% increase in sales in the first half of 2026 compared to the previous year and is currently managing 12 projects, with five more slated to begin soon. Eco City has also expanded beyond Tel Aviv to cities like Kiryat Motzkin, Hadera, Ramat Gan, and Bat Yam, focusing on municipalities genuinely committed to urban renewal.
Bar acknowledged challenges in promoting urban renewal outside high-demand areas, emphasizing the need for grants and criticizing the inefficiency of the complementary land model. He also criticized local planning committees for approving projects with minimal profit margins, leading to many plans stalling. This slowdown in project initiations could reduce housing supply and eventually increase price pressures, as demand persists despite market complexities.
