Mattei Hadar: Kfar Yona, Why A Nearly 50 Million Shekel Land Position Still Produces Negligible Rent
At the end of 2025, Kfar Yona was carried at 49.859 million shekels, yet it generated only 15 thousand shekels of annual rent and 4 thousand shekels of NOI. That gap is not a simple valuation mistake. It reflects a land position priced off planning optionality that still lacks full statutory maturity.
The previous Mattei Hadar piece argued that 2025 expanded the company's balance-sheet value layer far more than it expanded the rent base. Kfar Yona is where that gap becomes impossible to miss: a property carried at 49.859 million shekels at year-end, but generating only 15 thousand shekels of annual rent and just 4 thousand shekels of NOI.
At first glance that looks contradictory. In practice it is not an accounting contradiction. It is a shift between two different worlds. The current income from the land is barely relevant to value. The appraiser states explicitly that the agricultural lease does not affect the land's value, and the valuation itself rests on nearby land transactions and planning expectations.
That leads to three simple facts. First: Kfar Yona is not being priced as an income-producing asset. It is being priced as a land option. Second: the only newer approved plan that adds a concrete anchor beyond the longstanding agricultural designation mainly deals with an infrastructure corridor on a relatively small slice of the site. Third: the move to 750 shekels per square meter was made while the appraiser still stressed that no advanced statutory plan exists on the land, and while the Dira Lehaschir route remained only at a preliminary stage.
So the right question is not why the yield is low. The answer to that is simple: this is not a yield-driven asset. The right question is how much of the 49.859 million shekel carrying value already rests on a real statutory path, and how much still rests on a market willing to pay today for something that has not yet gained final legal form.
49.9 Million Shekels Against 15 Thousand of Rent
This is not an asset with a weak yield. It is an asset that is barely being valued through yield at all. In the annual report's property table, Kfar Yona is carried at 49.859 million shekels at the end of 2025, versus 46.535 million shekels at the end of 2024. In the same table, rental income is 15 thousand shekels in both 2024 and 2025, and NOI is 4 thousand shekels in both years. Value rose by 3.324 million shekels, while the income layer did not move in any meaningful way.
The lease terms themselves make the point. The agreement signed in March 2024 runs for 3 years, from April 2024 through March 2027, with Priot Alfasi Ltd. for seasonal agricultural cultivation of the entire site. Rent is 15 thousand shekels per year plus VAT, CPI-linked, and includes the arnona payment that the company pays in practice. The accountant's letter attached to the valuation states that actual 2025 rent from Kfar Yona was 15,386 shekels, and then comes the key sentence: in the appraiser's view, that agricultural income does not affect the property's value.
That also changes how the occupancy figure should be read. The annual report shows Kfar Yona at 100% average occupancy. Technically that is true, the whole area is leased. Economically it is close to meaningless. Full occupancy that produces 15 thousand shekels a year on a 49.859 million shekel asset is not evidence of an income property. It is a temporary use arrangement that keeps the land active while the planning route remains unresolved.
In rough numbers, the gross yield here is only about 0.03% a year, and the NOI yield is about 0.01%. Those are not income-property yields. They mainly confirm that the valuation logic sits somewhere else.
That chart captures the core point. Anyone trying to explain 49.859 million shekels through current rent is using the wrong model. Kfar Yona sits on the balance sheet as land with future optionality, not as an active cash-yielding business.
What Is Actually Approved, and What Still Is Not
The real gap here is statutory. The land benefits from a planning environment that signals potential, but the route that translates potential into executable rights is still far from closed.
| Planning layer | Status at end-2025 | What it gives in practice | What it still does not give |
|---|---|---|---|
| Older approved local plans | Approved | Agricultural designation, agricultural uses, and auxiliary structures | No residential rights, no executable building rights, no housing permits |
| District Master Plan 21/3 and National Outline Plan 35 | Approved | A high-level designation of urban-development area and urban fabric | Not a detailed plan, no permit route, no executable repartition |
| TML 1113, Kfar Yona South | Approved in March 2025, but only on parts of lots 1 and 29 | An underground infrastructure corridor on part of the land, while farming may continue until development starts | It does not turn most of the site into approved residential land |
| The old western plan and the old comprehensive outline route | Not approved, not progressing, or rejected | They show a history of planning direction | They create neither executable rights nor actual certainty |
| The Dira Lehaschir route | Preliminary pre-ruling stage, not statutory | It opens a newer planning channel | It still has no statutory standing and no executable monetization path |
The most important nuance here is TML 1113. It is an approved plan, but it does not approve the bulk of the land for housing. The valuation states that it applies to parts of lots 1 and 29 and, in practice, creates an underground infrastructure corridor on about 10,203 square meters, roughly 10.2 dunams. On the rest of the land, about 61.9 dunams, no comparable new certainty was created.
That ratio matters. Only about 14.1% of the land is touched by a concrete approved plan, and even that mainly in the context of underground infrastructure. The rest still waits for a route that gives real executable rights. So Kfar Yona cannot be read as if the issue were only one of time. Part of the gap is a basic gap between a general planning framework and a statutory tool that can actually be used.
The annual report says this directly: the old outline plan is neither approved nor progressing, and in its place a Dira Lehaschir plan is being advanced at a preliminary stage. That is not a technical footnote. It is the exact reason value already sits on the balance sheet while accessibility remains early.
750 Shekels Per Square Meter Is a Compromise, Not Proof of Monetization
The next question is whether the valuation is too aggressive. The answer is more nuanced. 750 shekels per square meter is conservative relative to much of the comparable transaction set, but it is still not the same thing as planning certainty.
The appraiser's comparison table includes 2024 and 2025 land deals ranging from 300 shekels per square meter to 2,450 shekels per square meter. Many of those deals were for relatively small parcels, and a meaningful share of them sits inside the Dira Lehaschir initiative area. The appraiser explicitly writes that because the western Kfar Yona plan was rejected and the comprehensive outline plan is not really advancing, it would be unreasonable to treat the higher prices as direct evidence of land with advanced statutory certainty. In other words, the local market itself may already be paying for expectations that are not yet legally crystallized.
Even so, after making that warning, the appraiser raises the chosen benchmark to 750 shekels per square meter, versus 700 shekels per square meter in the June 30, 2025 short-form opinion. That means the 50 shekel increase did not come from a statutory breakthrough. It came from a new balance between the absence of an advanced plan and the market prices being recorded around the site.
That chart explains the tension. On one hand, 750 shekels per square meter looks conservative against most of the 2025 deals. On the other hand, that does not make the value more mature. It only means the local land market around Kfar Yona is capitalizing part of the story earlier than the statutory system is delivering it.
This is the easiest point to miss. If the reader looks only at the transactions, the valuation can look cautious. If the reader looks only at the planning stack, the valuation can look early. Both can be true at the same time because the land sits exactly at the point where a market is pricing expectation ahead of legal maturity.
What Has To Happen From Here
First checkpoint: the Dira Lehaschir route has to move from pre-ruling into real statutory standing. As long as it remains a conceptual channel, it can explain market talk, but it cannot close the certainty gap.
Second checkpoint: the company needs a planning route that creates actual executable instructions, not only a general planning direction. The old outline route does not include unification and repartition, and permits cannot be issued from it. That is exactly why the land can grow more valuable without becoming more accessible.
Third checkpoint: a real anchor has to appear that translates carrying value into something capturable. That can be a material statutory milestone, and it can be a monetization event. Without one of those, Kfar Yona remains mainly a balance-sheet value line waiting for planning law and process to catch up to the price.
It is also worth noting the other side of the story. Not every touchpoint with an approved plan is automatically upside. In the case of TML 1113, the approved slice mainly concerns an underground infrastructure corridor, and the plan's own provisions restrict actual building there until the infrastructure need is activated or another plan with unification and repartition arrives. So even the place where planning is already concrete does not function here as immediate proof of unlocked value.
Conclusion
Kfar Yona does not contradict the broader 2025 Mattei Hadar thesis. It sharpens it. The land is carried at almost 50 million shekels not despite the weak rent but precisely because the valuation almost ignores the rent and instead looks at future land value. In that sense, the negligible rent is not a bug in the model. It is a reminder that the asset still lives mainly in the planning world.
The confusing part is that the valuation does not look absurd relative to local deal evidence. 750 shekels per square meter is conservative against much of the comparison set. But that still does not make the value accessible. As long as most of the land rests on plans that are unapproved or not progressing, and as long as the Dira Lehaschir route remains early, Kfar Yona remains paper value far more than it is an income-property business.
Current thesis: Kfar Yona explains how nearly 50 million shekels can sit on the balance sheet while producing almost no rent, because what is being priced here is planning horizon rather than current yield.
What decides the next step: whether that horizon gains statutory standing and a monetization route, or keeps trading for years before it becomes value the company can actually capture.
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