Paz has hired the services of Leumi Partners to enter real estate activity

Paz continues to diversify its business to reduce its dependence on gas station operations that face a long-term threat. Paz has hired the services of Leumi Partners to recruit a company that specializes in initiating, establishing and managing income-producing real estate as a partner in the income-producing real estate activity that Paz intends to establish.
The income-producing real estate activity, along with acquisitions of retail companies and investments in renewable energies, is one of four growth engines that Paz has set out to produce a company with balanced sources of income and profit within fifteen years. Paz owns 106 properties for personal use as stations with a value in the company's balance sheet of NIS 1.1 billion.
The establishment of an income-producing real estate company is done according to the company's strategic plan presented in February 2020, one of the components of which was the development and improvement of real estate to make it a stable source of income, as opposed to real estate realization, as the company has done in the past. Initiating real estate, so it is better to rely on the knowledge and expertise of income-producing real estate companies.
Investing in a subsidiary may be attractive to income-producing real estate companies, because Paz may in the future transfer larger parts of its asset portfolio to the subsidiary to improve them. , The scope of activity that Paz will transfer in the first stage is too small. Another option is to add a financial partner, who will inject cash into the subsidiary at the value of the assets that Paz will transfer - so that it can be leveraged in bank loans or bond issues and develop the assets.
Properties that Paz is expected to transfer to the subsidiary include the Paz Tal Gesher station on Yitzhak Sadeh Street, which is not considered one of the company's most prominent stations. However, the station is in an excellent location in the center of Tel Aviv. Another property is the gas station at the corner of Herzl and Ben Zvi streets in Tel Aviv, where it plans to build an office tower on the side of the station. Paz is expected to build a 2,500-square-meter hotel in Mea Shearim in Jerusalem, as well as to build an office tower on an area of ​​15,000 square meters in place of its gas station on Jabotinsky Street in Ramat Gan.
Other properties include the Paz Baka complex in Jerusalem in a joint project with Rami Levy, in which Paz will have building rights of 3,500 square meters of commerce and employment; "R.
At the end of 2020, Paz received a valuation of its assets, according to which the fair value of the 106 properties in an area of ​​278,000 square meters, used as gas stations of the company it owns, plus 18 other properties in an area of ​​1.3 million square meters, is NIS 3.5 billion. This is compared to a balance sheet value of NIS 1.7 billion.
Paz's real estate leased to external parties generated a cash flow operating profit (NOI) of NIS 37 million on a turnover of NIS 41 million in 2020, compared with an NOI of NIS 41 million on a turnover of NIS 49 million in 2019.
Paz will convene its shareholders to approve the allotment of 69,000 options (0.7% of the company in full dilution) to CEO Nir Stern. Price last weekend The fair value of the options is NIS 4 million - that is, NIS 57 per option.