Kardan Nadlan 2025: The Backlog Is There, but What Is the Quality of Residential Sales?
Kardan Nadlan sold fewer apartments in 2025 than in 2024, residential profitability weakened sharply, yet the reported average price per square meter still rose to NIS 26,242. The problem is that the disclosed price excludes buyer benefits, in the same market where the company itself describes heavier use of contractor loans, 20/80 structures, and index protection.
Where Sales Quality Actually Weakened
The main article already argued that residential growth quality was not clean. This follow-up isolates the narrower question: does the reported increase in average price per square meter really show pricing power, or does it mask weaker sales quality in a year when market conditions pushed developers to offer more help to buyers?
At first glance, the flattering number is easy to find. The average selling price per square meter in contracts signed in 2025 rose to NIS 26,242 from NIS 23,298 in 2024, an increase of 12.6%. The total contractual value of residential sales also edged up to NIS 378.7 million from NIS 371.8 million a year earlier. But that is exactly the reading that can mislead. Behind the higher reported price sit fewer transactions, much weaker profitability, and more commercial flexibility.
The number of apartments sold fell to 134 in 2025 from 145 in 2024. On its own that is not dramatic. It becomes much more meaningful once it is paired with the operating picture: residential-segment revenue fell 54.5% to NIS 137.2 million, while ordinary profit attributable to owners in the residential segment dropped 74.1% to NIS 19.9 million. In other words, the displayed price went up, but the underlying economics weakened.
| Metric | 2024 | 2025 | What it means |
|---|---|---|---|
| Apartments sold | 145 | 134 | Sales pace fell 7.6% |
| Total contractual value | NIS 371.8 million | NIS 378.7 million | Only a 1.8% increase despite fewer units |
| Average price per sqm | NIS 23,298 | NIS 26,242 | Up 12.6%, but not a clean economic price |
| Residential-segment revenue | NIS 301.4 million | NIS 137.2 million | Sharp decline in recognized revenue |
| Ordinary segment profit | NIS 76.8 million | NIS 19.9 million | Heavy deterioration in profit quality |
There is even a small internal paradox within the year. The fourth quarter accounted for 52 apartment sales, more than any of the first three quarters individually. So 2025 did not end in collapse. But even the better fourth quarter did not change the bigger point: the full year still closed with fewer units sold, far less revenue, and far less profit.
The Price per Square Meter Rose, but That Is Not the Economic Price
This is the most important line in the filing for this continuation. The residential sales table does not only show the average price per square meter. It also explains that the figure is based on contractual sale prices without taking buyer benefits into account, explicitly naming contractor loans and 20/80 promotions.
That is not a technical footnote. It is an admission that the number presented as “price” is not the full economic price. If the developer subsidizes part of the buyer’s financing cost, delays most of the payment until delivery, or grants index protection, it may preserve a higher nominal contract price while still giving away economic value. That means the move to NIS 26,242 per square meter is not clean proof that pricing power improved.
The company says elsewhere in the same filing that during 2024 and 2025 it granted buyers greater payment flexibility, including contractor loans, 20/80 structures, and index protection, and that this flexibility gives the buyer an economic benefit in the apartment price. The message is straightforward: whoever reads only the average price per square meter without the clarification underneath is reading a price that excludes part of the cost of making the sale.
The analytical problem is that the filing does not break down how much of the gap between 2024 and 2025 comes from project mix, how much comes from more generous terms, and how much reflects genuine price improvement. So the conservative conclusion is also the right one: the higher average price per square meter cannot be treated as clean evidence of better sales quality.
Profitability tells the same story. Using ordinary segment profit relative to revenue, residential margin fell to about 14.5% in 2025 from about 25.5% in 2024. That does not fit comfortably with a story of cleaner pricing power. It fits much better with a year in which sales pace was preserved at a higher commercial cost to the developer.
What Held the Pace Up, and Who May Pay for It Later
The filing is explicit about what happened in the market. It states that in 2024 and 2025, in line with sector conditions and prevailing market practice, buyers received greater flexibility in payment terms. It also spells out the risk: these structures increase exposure to deal cancellations in a falling-price environment, or in cases where the buyer lacks financing capacity when the deferred payment comes due.
The explanation of contractor loans goes even further. The company says that the mechanism lowers the buyer’s financing cost, but it also increases the developer’s liquidity risk, raises its financing cost, and can leave it with contractual compensation that does not fully cover the economic damage if the deal is cancelled. The explanation of 20/80 structures is even sharper: such promotions may attract buyers with weaker repayment capacity, and if a meaningful number of them cannot complete the payment at delivery, the developer’s ability to pay the project bank may be affected.
The company also offers the counter-read, and fairly so. It says its exposure is limited because most units sold on those terms are still far from delivery, and because in contractor-loan structures the financing bank underwrites the buyer at the start. It also says that 20/80 promotions were offered only to some buyers and on a limited basis during 2024 and 2025. That is the strongest counter-thesis, and it matters.
But even after those caveats, the picture is still clear. On March 23, 2025, the Supervisor of Banks published a draft temporary order that restricts bank financing for deferred-payment apartment sales and bullet or balloon structures, and the company itself says this could hurt housing demand, limit its flexibility in payment terms, and affect cash receipts in the relevant projects through the end of 2026. In other words, the same mechanism that helps support sales pace in the short term is already being marked by the regulator as a risk point.
That is the real test of sales quality. Not whether the company was able to sell, but on what terms it sold, who bears the economic cost of those terms, and what happens when financing conditions become less tolerant of them.
The Backlog Exists, but It Does Not Solve This Problem
This is where two separate ideas need to be split apart. On one hand, Kardan Nadlan’s residential project stack clearly has mass. The broader project table shows 12,375 housing units in total, with expected revenue of NIS 20.86 billion and expected gross profit of NIS 3.52 billion according to company estimates. That is a real platform, not an empty story.
On the other hand, the quality of that stack is uneven. Out of those 12,375 units, only 1,330 sit in projects already under execution and another 1,014 in projects under planning. The rest, 8,440 units, sit in land reserves, and another 1,591 units are in suspended projects. Put differently, the backlog is there, but most of it does not yet represent near-term, execution-stage demand.
That matters because it is easy to use platform size to blur the quality of current sales. If you look only at the total unit count, you can tell a story about a developer with long runway and scale. If you look at the actual 2025 sales data, you see something else: fewer units sold, far weaker segment profit, and a market environment in which the company itself says the disclosed price does not include all of the commercial concessions embedded in the sale.
So the 2026 test is not whether Kardan Nadlan has a project pipeline. That is already clear. The test is whether one of two things can be shown: either sales volume improves without deeper incentives, or the contracts already signed on flexible terms convert into revenue, profit, and cash without a wave of cancellations and without another leg down in profitability.
The Bottom Line
The “backlog” headline is true, but it does not answer the question of sales quality. In 2025 Kardan Nadlan showed exactly the paradox investors should be careful with: the reported price per square meter increased, yet the number of apartments sold fell, residential revenue dropped sharply, and profitability compressed heavily. When that same reported price also excludes buyer benefits, it cannot be treated as sufficient evidence of economic improvement.
The right read of 2025 is therefore more cautious and more precise. The issue is not that the company lost its residential platform. The issue is that current sales quality weakened, and the reported price hides part of the economic give-up required to hold the pace. As long as that remains true, the key number is not how many units appear on paper, but how many of them will close, be delivered, and turn into profit and cash on terms that do not consume another full cycle of value.
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