Almogim: How Much Of The Urban-Renewal Value Actually Reaches Shareholders?

The main article argued that urban renewal changed Almogim's profile, but not necessarily the cash layer that public shareholders can touch. This follow-up isolates that exact question: what 2025 already gave Almogim in the financial statements, what remained at the project or partnership layer, and what still has to happen before that value truly reaches the listed company.

That distinction matters because the accounting lines already moved in 2025. Almogim booked fair-value gains in Amishev and Bialik, and it also booked associate income mainly from Neve Tzedek. But between those numbers and shareholder-accessible cash there are several filters: the partner gets priority, tax takes a share, project surpluses are released only at the end of the cycle, and the parent company itself ended the year with a relatively thin cash balance.

So the right question is not whether value was created. It was. The real question is where that value sits today. If it sits mostly in fair value, equity-method entities, and shareholder-loan layers, then the public shareholder is still not standing in the same place as the headline profit figure.

2025 recognized value, not cash

The supplemental report from December 2025 framed the event cautiously. After losing control over the Amishev and Bialik partnerships, Almogim said it might recognize a pre-tax gain of roughly ILS 8 million to ILS 12 million in the annual statements. That was an early estimate, before the audited year-end numbers and before the accounting treatment was finalized.

Three months later, the annual report showed something much larger. Other income, net, came in at ILS 26.1 million for 2025, and ILS 13.886 million from Amishev plus ILS 9.351 million from Bialik, a combined ILS 23.237 million, came from remeasuring the investments in those two partnerships at fair value. At the same time, the group's share of associate profit rose to ILS 3.8 million, mainly from apartment sales in the HaRav Kook project in Neve Tzedek.

That is the first place where a reader can easily misread the story. Nearly 89% of 2025 other income came from fair-value recognition in two urban-renewal partnerships. In other words, the main urban-renewal contribution to the 2025 income statement was not cash that reached the parent. It was an accounting uplift created by the moment Almogim stopped consolidating those partnerships and began remeasuring its retained stake.

The balance sheet tells the same story from another angle. At year-end Almogim had ILS 181.6 million in investments and loans in entities accounted for under the equity method, versus ILS 23.9 million in consolidated cash and cash equivalents, and only ILS 7.8 million of cash and cash equivalents at the parent-company level. The value exists, but most of it is not sitting in the cash box of the listed layer.

A reader who looks only at net profit or at other income can easily conclude that urban renewal has already become near cash. That is the mistake. The report shows value creation, not full monetization.

Almogim's 60% is not 60% of the first surplus

To understand how much of that value is actually reachable, you have to go through the agreements with Rubi. This is where the gap between "we own 60%" and "we actually see the money" becomes concrete.

Under the agreements, Almogim holds 60% of each partnership and Rubi 40%. But Rubi is the party funding 80% of the required owners' equity, up to a ceiling of ILS 46.5 million, and that amount is first returned as shareholder-loan repayment until the equity contribution is brought into balance. Future equity funding is also supposed to come in on an 80% Rubi and 20% Almogim basis, until the agreed cap is reached.

So Almogim did not merely bring in a partner. It bought itself capital relief, and in exchange it gave up priority over the early cash.

The distribution order matters more than the ownership percentage. First comes repayment to the senior lender. Then Rubi's shareholder loan is repaid with 8% annual interest. Only then does Almogim's shareholder loan get repaid, and only after that do surpluses begin to split 40% to Rubi and 60% to Almogim until Rubi reaches a 17% IRR on its shareholder loan. Only above that threshold does the residual split move to 20% for Rubi and 80% for Almogim.

That leads to the core point of this follow-up: Almogim may own 60% of the partnership, but it does not receive 60% of the first cash that comes out of it. The first money goes to the bank, then to Rubi, and only in the later layers does more of the surplus begin to look like excess value for Almogim.

That chart captures what the filing is less clear about on first read. Almogim still owns the larger share of the upside in both projects, but the path is deliberately structured so the partner gets its capital back, its interest, and its target return first. In other words, the partnership improves Almogim's capital flexibility, but it also delays the point at which created value becomes value that is truly accessible to public shareholders.

The valuation report reinforces the same point. In both projects, execution is assumed to start only about 20 months after the valuation date. Beyond that, full surplus release is assumed only in the last month of the project. Amishev is modeled with a 42-month execution period and Bialik with 36 months. Even in the more generous economic model, the value recognized in 2025 is not built as near cash.

The accounting number is closer to pre-tax project value than to after-tax owner value

This is the sharpest finding in the whole package. The annual report says that at signing date Almogim derecognized partnership assets of roughly ILS 7.0 million and recognized its retained 60% stake at fair value of ILS 24.638 million.

Now place that number next to PwC's valuation. In discounted owner cash flow before tax, the portion attributed to Almogim is ILS 15.055 million in Amishev plus ILS 9.441 million in Bialik, a combined ILS 24.496 million. In discounted owner cash flow after tax, Almogim's portion falls to ILS 11.285 million in Amishev plus ILS 7.158 million in Bialik, or ILS 18.443 million in total.

The gap between the ILS 24.638 million booked in the accounts and the ILS 24.496 million of pre-tax owner value attributed to Almogim is only ILS 142 thousand. That is almost a full match. By contrast, the gap between that same booked carrying value and Almogim's after-tax owner value is more than ILS 6 million.

That is not an argument that the accounting is wrong. It is an argument about which layer of value the accounting captured. The number that entered the balance sheet is very close to discounted project value before tax. The public shareholder, by contrast, should care much more about what remains after tax, after partner priority, and after the time required to release the surplus.

The implication reaches beyond these two projects. In 2025 Almogim showed that it can surface accounting value from urban renewal relatively early in a project's life cycle. That is useful for optics and for the balance sheet. But it still does not solve the accessibility question.

Neve Tzedek is the quality test, not just the value test

If Amishev and Bialik show how fair value can hit the income statement early, Neve Tzedek shows the opposite direction: here there are actual sales, not just a discounted model.

In the January 1, 2026 update, the company said that three purchase requests had matured into binding contracts, and that on December 31, 2025 the project company signed agreements to sell three apartments with total area of about 870 square meters for total consideration of about ILS 155 million including VAT. In addition, during the fourth quarter of 2025 the project company signed agreements to sell another three apartments with total area of about 437 square meters for total consideration of about ILS 86 million including VAT. In total, by that update date the project had sold 9 out of 18 apartments for about ILS 313 million including VAT.

That is strong evidence. But even here, you still cannot jump directly from the project number to the shareholder number. The HaRav Kook project company is an associate in which Almogim holds 40%. So even when the company estimated that fourth-quarter sales should generate gross profit of ILS 25 million to ILS 30 million, it explicitly noted that Almogim's share is 40%. And in the annual report, the entire line for the group's share of profit of associates came to just ILS 3.8 million, mainly because of apartment sales in this project.

That is important because it shows what higher-quality value looks like. Neve Tzedek has signed sales, not just a fair-value model. Even so, Almogim does not "get the project". It gets its proportional economics in an associate. So ILS 313 million of project sales is not ILS 313 million of economics for public shareholders, and it is not even ILS 25 million to ILS 30 million of profit at Almogim. First it is economics at the project-company level, and only then the economics of Almogim's stake.

That is why Neve Tzedek matters so much for the next stage. If this project, where large contracts already exist, starts producing capital returns, upstream distributions, or a visible improvement in parent-level cash, it will become proof that the accounting layer can roll into the shareholder layer. If not, it will remain another example of how even real sales do not automatically mean fully accessible value.

What has to happen before this value becomes truly accessible

The first checkpoint is time. In Amishev and Bialik, the valuation itself assumes project execution begins only about 20 months after the valuation date, with surplus release only in the last month of the project. Any reading that treats the 2025 value as near cash is simply moving ahead of the projects' own timeline.

The second checkpoint is tax. The discounted owner cash flow after tax attributed to Almogim is roughly ILS 6.1 million lower than the discounted owner cash flow before tax attributed to Almogim. That is before asking when the money arrives, and after already asking how much of the economic value is left to the company.

The third checkpoint is the parent-company layer. At year-end 2025 the parent had only ILS 7.8 million of cash and cash equivalents, while the contractual bond repayment schedule stood at ILS 196.8 million within one year and ILS 526.1 million in total. That is exactly why a public-market investor cannot stop at the question of whether value was created inside a project. The real question is whether that value moves fast enough to reach the layer that serves the listed company's debt.

The fourth checkpoint is conversion quality. Neve Tzedek is the best project through which to test that question, because it already has material signed sales and concrete numbers. If even there the story remains mostly one of equity-method profit, without clear evidence that cash is moving upward through the structure, then 2025 will be remembered as the year Almogim proved it has value, not necessarily as the year that value became liquid.

Bottom line

Almogim's urban-renewal platform is already producing attractive numbers in the accounts. That matters. But as of year-end 2025, most of those numbers still sit in the fair-value layer, the associate layer, and the partner-waterfall layer, not in the cash layer available to public shareholders.

The implication is that the market should not ask only how much Amishev is worth or how many apartments were sold in Neve Tzedek. It should ask how much of that value can get through every filter on the way: tax, partner priority, project finance, timing, and the parent-company layer. Until that passage shows up in practice, part of the urban-renewal value will remain real, but still not accessible.