Migdaley Hayam Hatichon: Neve Eyalon, Sde Dov, and How Much of the Value Is Actually Accessible

What This Follow-up Is Isolating

The main 2025 article already argued that Migdaley Hayam Hatichon improved operationally, but that the development layer was becoming heavier. This continuation isolates only that layer. Not Rehovot, not the mature-home NOI base, and not the occupancy discussion. Just Neve Eyalon and Sde Dov, and the gap between value that has been created on paper and value that is actually accessible to public shareholders.

That distinction matters even more in a development-led senior-housing company. Fair value, land control, signed financing, or a strong JV partner are not the same thing as free cash, distributable value, or economics that have already reached listed shareholders. Sometimes value has been created. It is just still trapped behind capital, debt, timelines, and partnership terms.

Four points stand out immediately:

• Neve Eyalon already contains created value, but most of it still sits in the future. Year-end fair value stands at NIS 353 million, yet the valuation also shows roughly NIS 946.2 million of capital still to be spent and another NIS 454.7 million of entrepreneurial margin still unrecognized.
• Neve Eyalon is financed, but that does not make the value freely accessible. The project has a signed NIS 973 million facility, a maximum equity requirement of NIS 235 million that has already been invested, and a no-additional-financing covenant within the project. At the same time, the company signed a guarantee and indemnity undertaking of up to NIS 1.17 billion, indexed.
• Sde Dov is less "value-accretive" today than a quick read suggests. The table presents a NIS 454.9 million fair value, but the same filing explicitly says no independent valuation was prepared and that the asset is carried based on the amount paid, plus development costs and accrued bank financing costs.
• Even 51% ownership does not mean the value is currently accessible. In Sde Dov the company holds 51% of the partnership rights, but by year-end it had injected NIS 104 million while Clal had injected NIS 156 million, and the JV agreement allows a 60/40 profit split only alongside invested-capital adjustments and a minimum agreed return.

That is the right frame. Not every reported value layer is an accessible value layer. Sometimes it is first a claim on future execution, future funding, and future distributions through a partnership waterfall.

Neve Eyalon: Value Has Been Created, but It Has Not Been Released Yet

Neve Eyalon is clearly the more advanced and more mature project of the two. The land was acquired back in 2021. Excavation, shoring, and foundation works have already been completed. In July 2025 the project received a general building permit covering, among other things, 470 residential units, related areas, offices and retail, a recovery center, and a nursing ward. In September 2025 the company signed a main-contractor agreement with a wholly owned Dania Cebus subsidiary, and in December 2025 it also signed a NIS 973 million financing agreement.

So this is no longer just a land-and-planning story. Real project value has begun to form. But the question of accessibility starts exactly there.

At year-end 2025, the initial land cost stands at NIS 141.3 million, cumulative investment since then stands at NIS 135.7 million, and fair value reaches NIS 353 million. In other words, entrepreneurial value has already started to flow into the reported number. In 2025 alone, the project recorded a NIS 42.1 million fair-value gain.

But stopping at the NIS 353 million number misses the point. The same valuation also discloses three numbers that bring the project back to reality: estimated completion at the end of 2028, another NIS 946.2 million of capital still to be invested, and NIS 454.7 million of entrepreneurial margin still left for future recognition.

This is the core point. The gross completed-project value looks large, roughly NIS 1.754 billion, but it sits behind almost NIS 1 billion of capital that still has to be deployed. So the year-end NIS 353 million number does not answer the question of how much value is already available to shareholders. It only says the project has moved beyond raw land, while remaining deeply inside the economics of execution.

The Financing Is Signed, but It Also Locks the Project In

Neve Eyalon has made real financing progress. The December 2025 credit agreement provides a NIS 973 million facility, available from February 2026 for 78 months from signing. The partnership committed to invest no less than NIS 235 million of equity, and the filing states that the full equity amount has already been invested. Beyond that, the partnership also undertook not to take additional financing within the project.

That cuts both ways. On one hand, it materially lowers funding risk. The project is no longer hanging on an open-ended "where will the money come from" question. On the other hand, it also means the future value is now tied to a very specific leveraged execution path: project debt, collateral, prime plus 0.3% interest, and a no-extra-financing covenant.

And that is before the listed-company layer. The notes make clear that the company signed a capped guarantee and indemnity undertaking of NIS 1.17 billion, indexed, in favor of the bank. At the balance-sheet date there was still no actual guaranteed debt outstanding, and around the filing date only about NIS 16 million had been utilized for bank guarantees and the cash facility combined. But the direction is clear: Neve Eyalon's value now sits inside a financing structure, and that structure is not free from the shareholder perspective.

That is why the accessibility test is sharp. Neve Eyalon looks better on paper and is much more execution-ready than Sde Dov, but until the project moves from construction into actual marketing and occupancy, most of that value remains future leveraged value, not liquid shareholder value.

The Filing Carries Two Different Clocks

There is also a detail here that is easy to miss. In the project table, Neve Eyalon still appears with an expected completion date of 2028. But in the project narrative, the filing says that in February 2026 an amendment to the lease agreement with the Israel Land Authority extended the period for completing construction by only 12 months, to October 20, 2026.

The filing does not explain in detail whether the two dates refer to the same milestone or to different milestone definitions. So it would be too strong to call this a direct contradiction. What can be said is that the project is running with two different clocks inside the same annual report, which is exactly the kind of place where reported value needs to be tested against actual development milestones.

Sde Dov: Less Mature, Less Transparent, Less Accessible

If Neve Eyalon is a created-but-still-trapped value layer, Sde Dov is still much closer to a strategic option. The land was acquired during 2025, payment was completed in September, and the project is intended for up to 300 senior-housing units on a roughly 4,663 square meter plot. But as of year-end 2025 the company still says the project has no construction start date, no contractor, no pricing method, no marketing activity, and no estimable completion date because planning has not yet begun.

That is already a major difference relative to Neve Eyalon. In Sde Dov the company controls the land, but not yet the execution path.

The NIS 454.9 Million Number Is Not Entrepreneurial Value

The Sde Dov table shows year-end "fair value" of NIS 454.9 million. A quick read could interpret that as already-created project value, perhaps even as a near-term NAV layer. That is the wrong read.

The same filing explicitly states that no independent valuation was prepared for the asset at the balance-sheet date, and that it is presented based on the amount paid under the tender, plus development costs and accrued bank financing costs. That changes the reading completely. The NIS 454.9 million number is not a measured entrepreneurial uplift. It is much closer to accumulated cost.

The revaluation line reinforces that point. In 2025 the project recorded a fair-value loss of NIS 25.6 million. This is not a project that has already started surfacing development upside. At this stage it is still absorbing direct acquisition costs, development costs, and financing costs without presenting a measured entrepreneurial margin.

So from an accessibility perspective the current answer is simple: Sde Dov carries very little accessible value today. It offers land, control, a partner, and strategic option value. It does not yet offer mature, distributable economics.

Even 51% Ownership Does Not Mean the Value Already Belongs Upstairs

This is where the Clal JV structure becomes critical. The company holds 51% of the partnership rights and equity, while Clal holds 49%. At first glance that invites a mechanical read: take 51% of the Sde Dov number and attribute it to Migdaley Hayam Hatichon. But the filing itself shows why that is too simplistic.

First, the capital actually injected by year-end is not 51/49. To fund the land payment and purchase tax, Clal and the company invested NIS 156 million and NIS 104 million, respectively. So Clal injected more equity than the company despite holding the minority stake.

Second, the JV agreement does not set a simple straight-line distribution equal to ownership percentages. The company may become entitled to 60% of partnership distributions versus 40% for Clal, but only alongside an invested-capital adjustment mechanism and subject to a minimum agreed return. That means the link between legal ownership, capital funded, and value ultimately reaching the parent is not linear.

Third, the funding story is still incomplete. By year-end the partnership had fully drawn a NIS 250 million bank line for the land payment, and a NIS 71.8 million VAT facility had been drawn and fully repaid. But in the project table itself, the company states that the financing sources for the continuation of project construction have not yet been determined.

That is exactly why the value here is far less accessible than it looks. In a fully financed and executing project, one can start debating value capture and eventual upstream distributions. In a project where even the financing for the next construction phase has not yet been set, and where the economics sit inside a partnership with a conditional distribution waterfall, it is much too early to treat the reported number as value already sitting with listed shareholders.

There Is Also Environmental and Planning Friction, Even If It Is Not the Main Point

The filing also includes disclosure about a notice from the Ministry of Environmental Protection sent to the Israel Land Authority, according to which initial groundwater sampling in the wider Sde Dov complex found PFAS deviations relative to drinking-water thresholds. The Authority said its relevant teams were examining the scope of the required work and its significance.

The company, for its part, states that the notice was sent in generic form to all developers in the complex, that at this stage it does not know of a specific relevance or effect on the Sde Dov project, and that according to documents received from the Authority its plot, the northernmost one in the Sde Dov complex, is outside the area where the deviations were identified.

This is not the core thesis, because the company itself does not currently point to a direct project impact. But it is one more reminder that Sde Dov is still a far less accessible and far more contingent value layer than a quick land-value read would imply.

Where Value Has Been Created, and Where It Is Actually Accessible

The right way to read the two projects together is not to ask "what is each project worth," but "what kind of value is sitting inside each project today."

Put differently, Neve Eyalon is value that has been created but not yet released. Sde Dov is still mostly an option that has started to take balance-sheet form, but has not yet turned into measured and accessible value.

That is also the point where a simple NAV read becomes dangerous. In Neve Eyalon there is a stronger case for saying real value is building, but it still has to travel through almost NIS 1 billion of future capital, through construction, and through occupancy. In Sde Dov even that is premature. For now the cleaner language is land, control, and partner support, not mature development profit.

Conclusion

These two projects deepen Migdaley Hayam Hatichon's strategic growth layer. They also support the idea that the company has meaningful expansion optionality beyond its active homes. But the distance between created value and accessible value is not a side note here. It is the central issue.

In Neve Eyalon the company already holds a project with fair value, signed financing, and a clearer execution outline. So real value has been created there. Yet most of it still sits in the future: behind further investment, behind entrepreneurial margin that has not yet been recognized, and behind years of execution. In Sde Dov the read has to be even more conservative. As of the end of 2025 this is still land inside a JV, with partial financing, no independent valuation, and no determined continuation financing.

So if the question is "what are Neve Eyalon and Sde Dov worth," the filing gives only a partial answer. The better question is how much of that reported worth has already passed the funding, partner, and execution test. For now, the answer is: less than the first headline numbers suggest.