G City Plans Asset Sales Worth 6 Billion Shekels Following Failed Control Sale
G City, an income-generating real estate company controlled by businessman Haim Katzman, announced a deleveraging plan involving the sale of most of its residential assets in Europe and the US, alongside an exit from its Brazilian operations. The company expects these asset sales to generate approximately 6.1 billion shekels by the end of next year. This move follows the collapse of a deal to sell control of G City from Norstar, also controlled by Katzman, to Ari Nadlan, owned by businessman Tzahi Abu, due to deteriorating relations and complications involving the Yespero Group.
The buyers had intended to significantly reduce the company’s leverage, which currently exceeds 21 billion shekels in debt, to below 50% by focusing on income-generating properties in Israel and Poland and divesting other businesses. Katzman is now independently implementing this strategy and has expressed his intention to sell control to another party. Over recent years, Katzman has aggressively sold assets worth over 7 billion shekels across Europe, Russia, the US, Brazil, and Israel.
Katzman stated the company will continue exploring measures to create synergies, reduce general and administrative expenses, and further lower leverage. He highlighted the potential for significant development on existing properties, including an additional 400,000 square meters in Rishon Lezion and G Kfar Saba, and a 20,000 square meter expansion of the Promenada center in Poland. The Kalifa Fund is expected to take over Katzman’s management role in early October, with Katzman expressing confidence in the fund and the management team to lead the company forward.
The announcement coincided with G City’s second-quarter financial results, which showed a 12.9% decline in net operating income (NOI) to about 359 million shekels, partly due to asset sales and a stronger shekel. However, NOI from identical assets rose by 3.6% year-over-year. Adjusted for foreign exchange, NOI increased 25.3% to 332 million shekels. Net profit fell 64% to 83 million shekels, and funds from operations (FFO) dropped 10% to 96 million shekels. The company raised its 2026 FFO per share forecast to between 2 and 2.1 shekels.
Katzman noted strong operational results and growing demand for commercial properties from international investors in Europe and the US, despite currency challenges. He emphasized maintaining stable leverage levels relative to the previous quarter.