Ramot Ba'ir: Hahagana Is Valued at NIS 204 Million, But How Much of That Value Is Really Accessible

The main article framed Hahagana as an asset that provides more balance-sheet comfort than near-term liquidity. This continuation isolates that gap. The headline, NIS 204 million, sounds like a thick cushion. In reality, it is the end point of a long assumption chain: assisted-living and student-housing uses the city still disputes, an extra estimated betterment levy, land fees payable to the Israel Land Authority, a 25% uncertainty-and-delay discount, and the company’s own inability to say when construction or leasing would even start.

That is the core point. NIS 204 million is not cash value. It is the value of one planning scenario after major deductions, but before the company has shown it can actually capture that value. Once that number is set against a NIS 130 million land loan, a 10% minority layer, taxes that were not deducted, and an Ichilov principles document that still has not become binding, the gap becomes much thinner than the headline suggests.

How The NIS 204 Million Is Built

The Hahagana appraisal is not a loose number. That is exactly why it needs to be unpacked. In the consolidated report the company states a fair value of NIS 204 million as of December 31, 2025, but it also makes clear that this is a post-deduction number.

The first point is that NIS 204 million is already a net figure. It is not a gross value before mandatory charges. That is actually a strength of the appraisal because it avoids presenting the reader with a value that ignores obvious deductions. But there is a more subtle issue inside that same structure. The betterment levy that had already been paid in the past, about NIS 26.8 million, did not include assisted-living or student-housing uses. So inside the 2025 appraisal the valuer had to insert an additional betterment-levy estimate based on the very uses the valuation assumes. In other words, even one of the key subtraction lines inside the NIS 204 million is still an estimate, not a closed bill.

The methodology itself also shows how conditional the number is. The company presents the value under a comparison approach, using NIS 7,290 to NIS 10,230 per built square meter, a program of about 35 thousand square meters of assisted-living and nursing use, about 16 thousand square meters of student housing, and about 8,000 square meters of retail and ancillary use, together with a 25% deduction for uncertainty and delay. So the NIS 204 million is not the value of a simple vacant plot waiting for a buyer tomorrow morning. It is the value of a specific use program, under a specific planning reading, after a real discount, but still on the basis of uses the company and its advisers believe can ultimately be approved.

Conservative On The Upside, Conditional At The Base

There is genuine conservatism in the appraisal, and it matters. The valuer says explicitly that he does not include the possible additional rights under Tel Aviv Plan 5000, meaning the potential move up to a floor-area ratio of 8 subject to a detailed plan. He also says the Ichilov principles document is excluded from the valuation because no detailed agreement has been signed. Anyone looking for a valuation that stuffed in every possible upside layer will struggle to find that here.

But that conservatism mostly sits in the optionality layer. The base case of the appraisal rests on something much less settled: the assumption that the plot can be developed around assisted-living and student-housing uses under Plan C and Section 188, even though the Tel Aviv municipality stated as far back as February 2020 that, in its reading, District Plan 5 does not allow those uses as primary uses, only perhaps as ancillary uses and on a much smaller scale.

That is exactly where paper value and accessible value part ways. In January 2025 Ramot Office filed a roughly NIS 200 million claim against the City of Tel Aviv and the local planning committee, alleging misrepresentations about the plot’s permitted primary uses. During July, November, and December 2025 the defence filings and third-party notices were submitted, a pre-trial hearing was set for July 5, 2026, and the parties also moved into mediation. The company itself says that at this stage it cannot assess the claim’s odds. So the fight over permitted uses is part of the valuation itself, not a side note next to it.

That is also why the company cannot provide an execution timetable. It says it has no estimates yet for when project construction or leasing would begin. It also says it intends to pursue a new detailed plan to expand building rights, but does so, among other things, subject to the outcome of the legal process, and adds that as of the report date it cannot estimate what scale of area would ultimately be approved if such a plan is even filed. So NIS 204 million is the value of an existing scenario, not the value of a locked execution path.

What Is Left After Debt And The Partner Layer

Assume for a moment that the NIS 204 million does fully capture the economic value of the land. That still does not mean the company holds NIS 204 million of accessible value. The plot carries a NIS 130 million loan, with principal due on September 30, 2027. In addition, Ramot Ba'ir holds the asset through Ramot Office at 90%, while the remaining 10% is held by a company owned by the CEO.

This chart does not mean the company can realize NIS 66.6 million tomorrow. It shows how thin the gap becomes once Hahagana is read through the real capital stack rather than through fair value alone. Even if one accepts every appraisal assumption, only NIS 74 million remains at the asset level, or about NIS 66.6 million attributable to the company’s 90% share, before tax, before realization costs, and before the time needed to turn this asset into something liquid.

And there are still two more layers the appraisal does not solve. The first is tax. The valuer states that the appraisal does not include VAT and does not deduct capital-gains tax or land-appreciation tax. The second is time. The company gives no target date for construction or leasing to start, and the expansion-rights story through a new detailed plan sits outside the current value. So even if the NIS 204 million is not detached from reality, it is still detached from near-term liquidity.

The Ichilov Principles Document: Strategic Option, Not Current Value

It is easy to read Ichilov as upside that could make the site much more attractive. The company hints in that direction as well. It says the cooperation could become an attraction point for meaningful potential customers, and the valuer also notes that he and the company see significant potential there. But both documents then make the sharper point: that potential is not part of the 2025 value.

The reason is straightforward. The principles document was signed on March 5, 2023, but one of its first conditions required a full binding agreement within 90 days. That never happened. In the annual report the company explicitly says that no full binding agreement has been signed, despite the expiry of the deadlines set in the document. The valuer repeats the same point and therefore excludes Ichilov from the appraisal.

More importantly, even if the framework is revived, it does not mean every extra right stays with the company. Quite the opposite. The document says the company would allocate all rights in the Ichilov compound to Ichilov without consideration. In stage A, within a permit application based on roughly 60 thousand square meters currently assumed, Ichilov is meant to receive 3,000 square meters. In stage B, if a new detailed plan is approved, Ichilov becomes entitled to 10% of the additional rights, up to about 15 thousand square meters in total, net of the stage A allocation. And if no new detailed plan is approved at all, the stage B allocation is cancelled. This is a framework that can improve the site’s marketing story and strategic profile, but it also reminds the reader that future upside is not automatically kept by Ramot Office, and certainly is not accessible today.

That matters because the market can fall into a two-sided trap here. One mistake is to count Ichilov as if it were already inside the value. The other is to discard it entirely as if it carried no weight. Both are wrong. The better reading is that it is a strategic option that gets no value today, and that even if it materializes, part of the added-rights story would be allocated away and would still require more planning, more approvals, and more time.

Bottom Line

NIS 204 million at Hahagana is a serious number, but it does not represent NIS 204 million that can be pulled out of the balance sheet. It is the value of one use scenario, after betterment-levy and land-fee deductions, without Plan 5000 and without Ichilov, but still on the basis of a planning position the city continues to dispute.

That creates the key distinction. The paper value exists. The accessible value still does not. At the asset level, after the land loan, only NIS 74 million remains. At the company-share level, that falls to roughly NIS 66.6 million before tax. From there, the story still has to pass through legal resolution, planning clarity, timing, the minority layer, and finally an actual monetization event.

That is why Hahagana strengthens the balance sheet and explains why it is too easy to dismiss Ramot Ba'ir as a company with no real assets. But it does not solve the group’s liquidity question here and now. Until permitted uses are settled, a binding path is signed with Ichilov or without it, and a real execution route becomes visible, the NIS 204 million remains mostly conditional value, not cash cushion.