Like all Israeli car importers, Israeli businessman Rami Ungar (77) has made huge profits which have been invested in traditional industries like shipping and real estate. Ungar owns Kia importer Talkar and transports cars to Israel through his company Ray Shipping, which has a fleet of over 60 ships - one of which was hijacked by the Houthis in the Red Sea after the start of the war.
At the start of the week, Ungar implemented a move that will substantially expand his stake in real estate business Vitania Ltd. (TASE: VTNA). Market sources believe that he will consolidate his activities through the income-producing property company, which is traded on the Tel Aviv Stock Exchange (TASE), with a market cap of NIS 880 million.
Ungar’s Talkar has increased its holding in Vitania to 43% by buying the 13% stake in the company of former Osem controlling shareholders Dan and Gad Propper for NIS 140 million. Ungar is now the biggest shareholder in Vitania.
As part of the deal, Ungar will form a controlling bloc with 75% of the company along with Vitania’s founders chairman Ehud Samsonov, the Shemie family, real estate businessman Mody Kidon, veteran advertising executive Moshe Theumim and food importers the Hamama Brothers.
Talkar paid the Propper brothers NIS 22.88 per share, a 21% premium on the share price. Over the past two years Ungar has invested NIS 572 million in Vitania shares. On paper has made a loss of NIS 178 million because his holding is currently worth NIS 394 million. But a market source told "Globes" that Ungar is not looking for a quick profit from Vitania, which is why he is prepared to pay a premium for the shares because he believes in the long-term of the company.
Towers in Tel Aviv and Herzliya
Vitania, led by Samsonov and CEO Ofer Ziv, was founded in 1995 and held its TASE IPO 20 years later. The company operates mainly in Israel in development, construction, improvement, rental and maintenance of income-producing properties including office and commercial space, parking lots and residential construction. Vitania rents and manages these properties and occasionally sells them. As of the end of the first quarter, it held 196,000 square meters of income-producing properties (about 85% occupied).
Among the company's most prominent properties are Beit Verint in Herzliya Pituah, Vitania Tower in Tel Aviv’s Ramat Ha’hayal, and it is building another tower on La Guardia Street in south Tel Aviv. Vitania has 360,000 square meters in planning and development procedures in Tel Aviv, Petah Tikva, Ness Ziona and Jerusalem’s Har Hotzvim. The executive arm of Vitania is SGS, a company controlled by the founders Samsonov and the Shemie family which it says provides executive and operational flexibility.
Vitania ended the first quarter of 2024 with NIS 56 million revenue, half of which came from rents and managing the properties, a similar amount came from the sale of offices and another NIS 2.9 million in revenue from hotel management. The company reported an erosion in gross profit due to the cost of the offices sold, so that the quarterly net profit fell 22% to NIS 9.6 million. Operating profit (FFO) was NIS 17.5 million in the first quarter, up 5% from the corresponding quarter in 2023. Vitania ended 2023 with NIS 201 million revenue and NIS 78 million net profit.
NIS 1 billion in real estate
Vitania is not the first real estate company in which Ungar has invested. Five years ago, Talkar acquired a logistics center in Modi’in for NIS 470 million from Mega Or, controlled by Zahi Nahmias, which mainly serves the Israel Postal Co, after, according to those close to the deal, he was looking for a property that yields a strong and stable cash flow. The property in Modiin is considered a property with a stable long-term tenant.
So, in total, Ungar has invested over NIS 1 billion in these two real estate investments alone - Vitania shares and the Modiin logistics center.
Further evidence of Ungar’s financial strength was seen sevral years ago when he was touted as a potential candidate to buy Haifa Port (as part of a consortium), with the tender eventually won by Indian tycoon, Gautam Adani.
Published by Globes, Israel business news - en.globes.co.il - on August 7, 2024.
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