Yamim Hatz'eira: How Clean Are the Sales and Surplus in the Project Carrying Much of the Thesis?
At first glance Yamim Hatz'eira phases A and B look like a major surplus engine for Yuvalim: phase A was already 95% sold by year-end, and phase B had financing, a contractor, and a first permit after the balance sheet date. Under the headline, though, sit 129 related or affiliated buyer sales, deferred payment dates, and surplus figures that include returned equity, not only fresh profit.
The main article already framed Yuvalim's core issue: value exists, but the path from project value to upstream cash is longer than the accounting profit suggests. This follow-up isolates Yamim Hatz'eira because a large part of the group's cash-release story sits here. If mature phase A really starts releasing surplus, and if phase B matures without pulling in repeated new equity, the broader thesis looks better. If not, a large share of the stated upside remains mostly on paper.
The picture is not one-sided. Phase A is not a weak project. By the end of 2025 it was 85.7% complete on an engineering basis, with 350 signed contracts out of 368 saleable units, a 95% sell-through rate. There is also an important counterpoint on demand quality: based on information given to the company, the related and affiliated buyers had only one apartment left to sell out of the 129 units they purchased. That does not look like inventory stuck inside a friendly channel.
But that still does not make the sales clean. Those 129 apartments, about 37% of the signed contracts in phase A, were sold either to a private company in which the controlling shareholder indirectly holds 25% or to a third party that maintains business ties with the controlling shareholder. The audit committee and board approved deferred payment dates for those buyers, and by the report date they had paid about NIS 72 million and NIS 24 million including linkage, roughly 40% of the apartment prices they had committed to. At the same time, the buyer of the 99 apartments was also allowed to resell each apartment before handover. So the project is advancing, but part of the sales pace is still leaning on a channel that is not fully comparable to ordinary third-party demand.
Phase B has a different problem. The issue there is less about buyer proximity and more about contractual hardness. There is a financing agreement, there is a fixed-price contractor, all residents were evacuated, and demolition already started. But as of year-end only 58 apartments had been sold out of 296 saleable units, roughly 20%, and all those contracts were conditioned on a full building permit. In three of them even 5% of consideration had not yet been paid by the balance sheet date. After the balance sheet date the project received a first full permit only for the first two buildings, 174 units out of the six planned buildings. So phase B is still mostly a financed option on future surplus, not near-term cash.
| Item | Yamim A | Yamim B | Why it matters |
|---|---|---|---|
| Saleable units | 368 | 296 | The economic sales base of each phase |
| Signed contracts at year-end | 350 | 58 | 95% sell-through in phase A versus only 20% in phase B |
| Related or affiliated buyer component | 129 apartments | No similar component disclosed | In phase A a material share of sales ran through a non-ordinary channel |
| Permit status | Full permits for all eight buildings had already been received in August 2023 | First full permit only for 174 units was received after year-end | Phase B contracts still depended on permit hardening |
| Expected surplus available for withdrawal | NIS 261.2 million | NIS 224.8 million | The big headline, but not all fresh profit and not all liquid |
| Expected surplus timing | Across the three quarters after occupancy is expected to begin in Q3 2026 | Across the two quarters after completion expected in Q4 2028 | The gap between stated value and near-term cash |
Where the Sales Are Less Clean Than the Headline
The critical number in phase A is not only 350 signed apartments. It is also the 129 apartments sold to related or affiliated buyers. That is almost 35% of the whole saleable stock in the phase and about 37% of the actually signed contracts. At that point it is no longer a side note. It is a material distribution channel.
That chart is not meant to argue that the sales were fake. It shows that the real question is not only sales pace, but sales composition. Yuvalim itself says that the related and affiliated buyers had already resold almost all of the apartments they bought. That is an important counterpoint because it suggests the channel did not simply warehouse unsold units. But it does not remove the economic question, because by the report date most of the consideration still had not been paid.
That is the delicate point. If the related and affiliated buyers had paid only around 40% of the price, and the company had approved deferred payment dates, then even in a project already close to delivery part of the sales pace still rests on embedded commercial credit. That may prove to have been only a bridge. It cannot be read as fully ordinary outside demand.
The lender already hints that the operating track is less smooth than the top-line sales number implies. Phase A's financing agreement did not produce a stated breach indication, but the company explicitly says the project had deviated from the original forecast submitted to the bank in two areas, sales pace and project completion date. The final maturity was pushed to 28 February 2027, and that delay is stated to be known to the financing party. This is not a collapse. It is also not a project running exactly on the original underwriting line.
Phase A Surplus Looks Large, but It Is Not All Profit and Not All Accessible
This is where the biggest gap sits between the headline and the economics. In phase A Yuvalim presents expected gross profit of NIS 225.3 million, expected economic profit of NIS 175.9 million, and expected surplus available for withdrawal of NIS 261.2 million. A quick read can easily grab the last number and translate it almost automatically into cash moving upstream. That is the wrong read.
First, the expected surplus available for withdrawal already includes NIS 85.3 million of equity that has been invested. In other words, the gap between NIS 261.2 million and NIS 175.9 million is not an extra layer of created value. It is largely a return of money that already went in. Second, this is still a 100% project-company number, while Yuvalim's effective share is 50%. In Yuvalim's own economic layer that means roughly NIS 130.6 million of stated surplus, of which only about NIS 88.0 million looks like economic profit before any additional upstream friction.
Third, the route to that cash is far from automatic. The company expects those phase A surpluses to be withdrawn during the three quarters following the start of occupancy, which is currently expected in the third quarter of 2026. Beyond that, it says the lender may release surplus earlier at its sole discretion, depending on project progress and sales pace. That is a bank option, not a contractual right the company can simply pull forward.
The last layer is the debt layer. The rights of Yuvalim Netanya to receive phase A surplus, at the 100% project level, are pledged in favor of the holders of Yuvalim's Series B bonds. So even once surplus exists, it still does not sit in a fully free cash layer.
Phase B Is Still Future Underwriting, Not Near-Term Surplus
Phase B already has a project skeleton that cannot be dismissed. In January 2025 Yuvalim signed a financing agreement with Bank Leumi for total facilities of up to about NIS 1 billion, including up to NIS 160 million of cash credit and about NIS 846 million of guarantees. In March 2025 it signed a fixed-price contractor agreement with Etz Hashaked at about NIS 388 million linked to the construction-input index. In May 2025 demolition began. So this is not a paper concept.
But it is still much too early to read it as a cash engine. The conditions for drawing credit in phase B included pre-sales of 44 apartments for at least NIS 108.8 million, full evacuation of the land, an updated zero report, all permits and approvals, insurance, and NIS 88.7 million of equity. As of year-end the cash credit line itself was still fully unused, while about NIS 330 million of guarantees had already been issued. That means the project is already consuming meaningful banking capacity even before the cash line is actually drawn in full.
From a sales-quality perspective, the headline is still soft. Yuvalim had only 58 signed contracts by the end of 2025, around 20% of the saleable units. According to the revenue-recognition note, all of those contracts were conditioned on a full building permit. In three contracts less than 5% of the consideration had been paid by the balance sheet date, and after the balance sheet date only about NIS 0.7 million was received for contracts that were not recognized as binding as of the report date. Even after the 28 January 2026 immediate report, the picture is not "full permit for the whole phase" but a full permit for the first two buildings, 174 units out of the six planned buildings.
This also matters because the underwriting is still moving. In phase B the total expected project revenue was cut to NIS 733.1 million at the end of 2025, down from about NIS 785.7 million in the 2024 presentation of the same project. At the same time expected total gross margin fell to 21.8% from 25.1%. That does not prove the project became weak. It does show that future surplus is still being built on moving assumptions, not on a number that has already settled.
That chart is the core of this continuation. In both phases the headline line of expected surplus available for withdrawal is materially larger than economic profit because it includes equity as well. In Yamim A the gap is NIS 85.3 million. In Yamim B it is slightly larger, NIS 88.7 million, and NIS 29.46 million of that had not even been invested by the balance sheet date. So phase B is not only far-dated surplus. It is also surplus that first requires additional equity to go in.
The timeline says the same thing. Yuvalim expects phase B surplus to be withdrawn during the two quarters following project completion, and construction completion is expected only in the fourth quarter of 2028. Before that, the same "surplus" mostly functions as underwriting support for financing, guarantees, and further equity commitment.
Conclusion
The right read of Yamim Hatz'eira has to be split, not blended. Yamim A is a mature project, but less clean than the 95% sell-through headline suggests. A material part of the sales moved through related and affiliated buyers, payment dates were deferred, and the lender already acknowledges that the project is running slower than the original plan. Yamim B is a real project with financing and execution momentum, but still much too early to read its surplus as accessible value. Sales are still soft, permits are still partial, and the stated surplus includes capital that remains trapped and in part has not even been injected yet.
There is a legitimate counter-read. One can argue that the hardest part is already behind the company: Yamim A is almost sold and moving toward delivery, the related and affiliated buyers have already sold through almost everything, and phase B already has financing, a contractor, and a first permit. That is a real possibility.
But if the question is how clean the sales and surplus really are, the balanced answer is this: the sales in Yamim A look stronger than the most suspicious first impression, but less clean than ordinary third-party demand; and the surplus in both phases looks more real than the harshest bear case, but less liquid and less immediately "Yuvalim's" than the big headline number in the tables suggests.
Disclosure: Deep TASE analyses are general informational, research, and commentary content only. They do not constitute investment advice, investment marketing, a recommendation, or an offer to buy, sell, or hold any security, and are not tailored to any reader's personal circumstances.
The author, site owner, or related parties may hold, buy, sell, or otherwise trade securities or financial instruments related to the companies discussed, before or after publication, without prior notice and without any obligation to update the analysis. Publication of an analysis should not be read as a statement that any position does or does not exist.
The analysis may contain errors, omissions, or information that changes after publication. Readers should review official filings and primary sources before making decisions.