The old central bus station, how much of the value is actually close to realization

What This Follow-up Is Isolating

The main article covered the broader company. This follow-up isolates one question: when the old central bus station is presented as one of the group’s largest value blocks, how much of that value is actually close to moving from an appraisal number to something that can be realized.

The short answer is that the site has clearly advanced, but progress is not the same thing as realization. At the end of 2025 the company’s share in the fair value of the land stood at about NIS 749.2 million, against only about NIS 100 million of dedicated debt. That is very low leverage. But the same fair value already assumes heavy reductions for construction complexity, public obligations, betterment levy, co-ownership and a delay factor of 0 to 4 years depending on the complex. In other words, the debate has already moved away from whether there is value and toward when and under what conditions that value can become accessible to shareholders.

What matters most is that the main bottleneck is no longer the intermediate holding structure. Levinstein Engineering’s ownership in Levinstein Properties rose from 69.8% in 2023 to about 71.4% at the end of 2024, and reached 100% in 2025. That is a real improvement in economic access to the asset. From here onward, the bottleneck shifts to planning, re-parcelation, permits, betterment levy and public obligations.

Four points matter from the outset:

• NIS 749 million is not a gross value number. The valuation starts at about NIS 2.96 billion before reductions and gets to NIS 749.2 million for the company only after a long chain of deductions, delay assumptions and rights allocation.
• What got cleaned up in 2025 was mainly the holding chain, not the planning uncertainty. Complex 1 advanced, but Complexes 2 and 3 still sit on allocation tables that have attracted objections.
• Leverage is low. Roughly NIS 100 million of debt against roughly NIS 749 million of value means the site is not under immediate financial pressure.
• That is also why the value can stay on paper for longer. When there is no financing pressure, there is no forced trigger for quick realization.

How NIS 749 Million Shrinks To NIS 749 Million

The NIS 749.2 million figure sounds large, and it is. But the path to that number explains why a superficial reading is dangerous. The appraiser did not take gross rights, multiply by market prices and assume everything was permit-ready. The opposite happened. He built a full value for the complexes and then deducted nearly every material friction already known today.

Two conclusions matter. First: a large part of the heavy lifting has already been done inside the valuation itself. Anyone looking at NIS 749 million as a clean number waiting for one execution step is missing that the appraisal already deducts most of the known problems. Second: even after all those deductions, this is still a large value block. So the real question is not whether value exists, but whether it is close enough in time and certainty for the market to treat it as accessible.

The March 2026 presentation helps sharpen the point. It describes rights for the two companies of roughly 900 housing units and roughly 115,000 square meters of commercial and office space, and it points to an expected permit timeline of about a year and a half. That explains why the site remains one of the more interesting assets in the group. But the same presentation also highlights the gap: the rights are large, the fair value is high, and the old clearance bottleneck has eased materially, yet the market still needs to see permits, final allocation and a move from planning into execution, not just another appraisal.

Where Value Actually Advanced

There has been real progress here, and it would be wrong to dismiss it. First, the site no longer carries the old burden of squatters and protected tenants. The annual report and the valuation both state that, by the reporting date, no squatters or protected tenants remained. That is not a technical detail. It removes a bottleneck that could have delayed any realization thesis for years.

Second, Complex 1 is in a very different place from Complexes 2 and 3. Its detailed plan was approved in January 2023, and the design plans for plots 101 and 100 were approved in June 2023 and November 2025 respectively. The valuation also says the company submitted three permit applications for Plot 101, including a full building permit application, excavation and shoring, and an authorization permit for underground construction around the plot. That is the part of the story that is closer to realization, not because it is fully closed, but because it has already moved through a meaningful part of the statutory process.

Third, the ownership layer has become cleaner. Now that the company owns 100% of Levinstein Properties, it no longer shares its economic interest in the project with minority holders at the subsidiary level. That does not remove the partnership with Shikun & Binui Real Estate at the site level, but it does remove another layer of leakage between the public company and its shareholders.

Where The Value Still Gets Stuck

The problem is that the site should not be treated as one homogeneous block. In terms of proximity to realization, Complex 1 and the permit path around it belong to one world, while Complexes 2 and 3 belong to another.

This is the heart of the story. Anyone reading the NIS 749 million number as if the whole site sits at roughly the same distance from a permit is missing that the valuation itself separates between the complexes. It does that through availability, delay and co-ownership discounts. The valuation explicitly states that, other than Complex 1, the re-parcelation plans for Complexes 2 and 3 have not yet been approved, that objections were filed to the updated tables published after the Section 106B stage, and that no hearing date has yet been set. That means the rights in those complexes can still change if the final relative allocation changes.

Public obligations add another layer. The valuation deducts costs for public-benefit commitments, 100 parking spaces and about 3,440 built square meters across the complexes, as well as the preservation of Beit Habe’er. It also deducts betterment levy, while relying for now on the decisive appraiser’s determination, even though in January 2026 the appeal committee had already changed parts of that determination and opened the door for further agreements between the parties. That matters because the tax and public-obligation layer is not fully closed yet either.

There is also a real engineering and planning complexity that should not be smoothed over. The Green Line light rail passes underground through the middle of the site. The appraiser says this is already reflected through a construction-complexity deduction because the rail alignment limits basement planning and anchor placement. The valuation also assumes that some of the complexity has become clearer through draft agreements and discussions with NTA, but this remains real complexity, not a cosmetic footnote.

Why 2025 Did Not Fully De-risk The Story

Another way to see the same point is through the revaluation gain. In 2025 Levinstein Properties recognized only about NIS 5.7 million of revaluation gain for the site. That is a small number relative to the size of the value block, and the reason is more interesting than the headline. The annual report says the gain mainly came from a shorter delay assumption for one plot in Complex 1 and from changes in the discounts for size and construction complexity in Complex 1, while higher co-ownership discounts in Complexes 2 and 3 worked in the opposite direction.

That is almost a perfect summary of what happened in 2025. The project advanced where it could advance, but the uncertainty in the other complexes did not disappear and instead offset part of the improvement. Anyone trying to argue that the station moved this year from trapped value to something close to ready needs to explain why the revaluation gain remained so modest relative to the scale of the rights. Right now the more reasonable reading is that value moved forward, but carefully.

Appraised Value Is Not Cash For Shareholders

This is where the most important question starts: even if one accepts the full NIS 749 million figure, how much of it is accessible to shareholders within a reasonable timeframe.

From a balance-sheet perspective the site looks healthy. The dedicated debt used to finance the rights stands at about NIS 100 million, carries prime plus 0.5% interest, and matures in December 2026. At the same time, the financing agreement sets a 60% loan-to-value threshold, with an equity cure only if the ratio reaches 70%. Against roughly NIS 749.2 million of value for the company share, the ratio is very low.

That has a double meaning. On one hand, there is no financing pressure forcing a sale, a rushed refinancing or some emergency move. On the other hand, precisely because there is no such pressure, management can keep the asset on the balance sheet for longer while waiting for better planning maturity. For shareholders, that means low leverage protects value, but it does not necessarily shorten the path to realization.

There is also a clear distribution constraint. The company’s dividend policy already strips out Levinstein Properties’ contribution to solo profit and adds back only dividends actually received from it. Beyond that, the Levinstein Properties bond indentures restrict distributions if adjusted equity falls below NIS 450 million or if net debt to net CAP rises above 65%, and they prohibit distributions from revaluation gains generated by Levinstein Properties’ solo assets. At the parent level there is also a similar restriction on distributions from unrealized revaluation gains.

That is critical in a follow-up like this. A high appraisal is not the same thing as cash that can be distributed. Until there is a realization event, an especially favorable refinancing, or some other move that converts the value into cash, a meaningful part of the value remains accounting value.

What Actually Has To Happen Next

If this site is reduced to a practical checklist, four checkpoints really matter:

• A permit in Complex 1. That is the first real test of whether planning progress is becoming execution.
• A decision on the objections in Complexes 2 and 3. Without that, the rights there are still not final, and the valuation remains partly conditional.
• Clearer visibility on betterment levy and public obligations. That can move the net value even if gross value does not change.
• A move from valuation to economics. As long as the site only generates short-term and negligible parking rent relative to its total value, it does not meaningfully bridge the waiting period through current income. This is a long-duration value block, not an income asset that shortens the realization clock.

Conclusion

The old central bus station remains one of Levinstein Engineering’s largest value concentrations, but what is close to realization today is much narrower than the NIS 749 million headline suggests. The company’s relative share already benefits from a cleaner ownership chain and low leverage, and Complex 1 now looks like a real path with executable milestones. But the rest of the value is still separated from shareholders by unfinished allocation tables, permits, betterment levy, public obligations and execution complexity.

The right reading at the end of 2025 is therefore not “value trapped forever”, but it is also not “cash around the corner”. This is a real option with less financing pressure than many similar projects. What it still lacks is not another appraisal, but execution events that shorten the distance between value on paper and value that can actually be captured.