Israel Land Development's Ofer Nimrodi is in talks with Tiberias-based entrepreneur Yehezkel Morad to sell 83 percent of ILD Hotels, the company's hotel division. Morad is the owner of the Morad Yehezkel development company, which has holdings in hotels and real estate.
Israel Land Development informed the Tel Aviv Stock Exchange (TASE) it was negotiating a deal to sell half of its ILD Hotels portfolio. The portion is valued at NIS 144 million.
However, TASE announced ILD Hotels has not met the requirements of a 15-percent minimum public holding to be a listed company. TASE gave ILD Hotels until the end of 2018 to take steps to comply with the regulations. ILD Hotels' stock will join the watch list if the company does not comply.
Israel's Hotel Sector
More than 3 million tourists arrived in Israel in 2017, and the state attracted a record number of tourists in the first half of 2018, injecting more than NIS 12 billion ($3.3 billion) into the Israeli economy, according to the latest stats from the Israeli Ministry of Tourism. The numbers are driving appeal for further hospitality investment.
Israeli banks are also seeing increased interest from potential investors and developers. In the last two years, Israeli Bank Hapoalim has seen an increase in the demand for credit from private entrepreneurs and international hotel chains, Tazahi Cohen, head of corporate banking at the company, said last month.
ILD Hotels & Yehezkel Morad
This transaction will be ILD Hotels' most recent with Yehezkel Morad. Morad previously purchased the Rimonim Galei Kinnereth Hotel from ILD Hotels for NIS 92 million in 2012. ILD Hotels, which still manages the property, earned NIS 40 million from the sale.
ILD Hotels has a portfolio of eight hotels with 1,255 guestrooms. The company owns three of these hotels fully and one hotel partially. ILD Hotels also operates an additional four hotels under a management agreement. The eight properties are Rimonim Eilat Hotel, Rimonim Galei Kinnereth Hotel in Tiberias, Rimonim Palm Peach in Akko, Ruth Rimonim in Tzfat, Rimonin Tower in Ramat Gan, Rimonim Hermon Holiday Village, Rimonim Hotel Nazareth and Rimonim Shalom Jerusalem. The company also operates a commercial property in Eilat, Israel.
ILD Hotels faced revenue declines between 2016 and 2017 due to a loss of two hotels. The company attributes this loss to the expiration of a management agreement for the properties in 2016. The revenue for the remaining hotels grew NIS 4 million.