"There is a general panic in the market now, which is naturally affecting homebuyers. But if I, Hanan Mor, were to advise someone seeking to buy a new apartment, I'd tell him to run and grab the opportunity of the next six months to buy an apartment, because what will happen afterwards has never happened before in Israel. When the panic recedes, prices will rise like we've never seen," said Hanan Mor, the chairman and CEO of housing construction company Hanan Mor Group - Holdings Ltd. (TASE:HNMR).
Mor said, "People don’t know how to read the economic figures and they don’t understand that Israel's on the verge of a catastrophe in terms of the supply of new apartments. The crisis has activated forces that are reducing the supply and the banks are already limiting credit to contractors. We'll meet in a year's time and we'll see that we're beginning three years of steady growth."
Hanan Mor is one of the housing developers who expanded in Israel and internationally in recent years. He honestly believes that he will emerge stronger from the crisis, which he predicts will end soon and will be succeeded by a market boom. He is not fazed by the dismal condition of the company's share which have fallen 30% since the beginning of the year, or two bond series, which are currently traded at a yield of 30%. "The capital market knows how to value my condition. A 30% yield in AAA, relatively speaking, and ignore the panic," he says.
Hanan Mor Holdings' main residential projects under construction in Israel are in the Tel Aviv suburbs of Ness Ziona and Beer Yaakov, and in Lehavim in the Negev. The company also has extensive activity in Poland, Romania, Bulgaria, and Ukraine. The company is highly indebted, with less than NIS 30 million in shareholders' equity, amounting to a tenth of its balance sheet total.
Mor says, "Those who cook on Friday night eat on Saturday. We have NIS 180 million in actual sales in projects under construction, which will be reported in financial reports because we're delivering buildings. Our Bond A series, which totals less than NIS 50 million will mature beginning in May 2009 and through 2012. Our Bond B series, which totals NIS 40 million, will mature between 2011 and 2014. My cash reserves, based on actual projects and not castles in the air, will remain over NIS 100 million, after debt payments."
"Globes": So the crisis is an opportunity?
Hanan Mor: "This is the time for the tigers and panthers to leap forward. I've been told that I'm the next Yitzhak Tshuva. This is the time for the mid-sized companies that have cash in hand for investment to move forward. We have n opportunity to make into the top five real estate companies when the crisis passes."
Published by Globes [online], Israel business news - www.globes-online.com - on November 24, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008