Tel Aviv Stock Exchange To Launch Three New Real Estate Indices: TA-Construction Index, TA-Investment Properties In Israel And TA-Investment Properties Abroad

The Tel Aviv Stock Exchange (TASE) announced today the launch of three new real estate share indices: the TA-Construction index, the TA-Investment Properties in Israel index and the TA-Investment Properties Abroad index. This follows the recent reclassification of the real estate sector.

These 3 new indices are in addition to the veteran TA-Real Estate index. With the launch of the indices, the family of real estate indices will number 4 Real-Time indices.

The high returns accrued to the TA-Real Estate index over the past years has stimulated demand for additional financial products based on real estate sector stocks. The launch of the new indices is designed to let investors seeking to invest in commercial real estate firms- with a geographic distinction between those specializing in investment properties in Israel and those specializing in properties abroad - and to facilitate investment in a basket of construction companies. The new indices are launched as part of the expansion of product and service offerings – one of TASE’s key strategic goals.

On 1 July 2019, the sectoral reclassification came into effect, such that under the “Real Estate and Construction” sector, two subsectors were created – Investment Properties real estate and construction. On December 8^th, 2019, TASE announced an additional modification, splitting the real estate and Construction sector into two new subsectors. The first subsector will comprise real estate Investment Properties firms whose primary business activity is in Israel, and is expected to include 27 companies having a total market capitalization of around NIS 114 billion. The second subsector comprises Investment Properties firms, which specialize in investment real estate projects abroad, and is expected in include 17 companies with a total market capitalization NIS 30 billion.(The existing subsector Investment Properties real estate will be cancelled). It is important to note that this index can include commercial real estate firms specializing in properties abroad that are not Israeli Oriented companies in any meaningful sense.

The launch date for the new indices is the coming semi-annual index Update Date scheduled on February 9^th, 2020. The record date for constituent selection is the end of trading on January 16^th, 2020 and the index constituency will be published a week later on January 23^rd, 2020.

The following tables summarize key data in regards to the new indexes, based on a simulation conducted on 25/11/2019 (in NIS billions)

	TA-Construction	TA- Investment Properties Israel	TA-Investment Properties Abroad
Market capitalization	22.7	114.3	30.6
Float-adjusted capitalization	8.3	54.6	12.8
Weight cap	5%	5%	10%
Indicated yield YTD[1]	65.2%	51.6%	32.7%
Expected no. of index constituents	28	27	17
TA-35 constituents	1	5	1
TA-90 constituents	4	13	6
SME-60 constituents	6	3	1
TA-Growth	17	6	8
No. of shares not linked to Israel	---	---	1

[1] Calculation based on the annualized return of each constituent on 25.11.19 multiplied by its anticipated weight in the index.

The following is a simulation of the constituency of the new indices, as of 25/11/2019

TA-Construction
	Company	Market Cap (million NIS)	Rate of Return YTD	Expected Weight
1	SHIKUN & BINUI	5,838	106.0%	5.0%
2	ASHTROM GROUP	3,427	163.0%	5.0%
3	DIMRI	1,766	65.3%	5.0%
4	ISRAEL CANADA	1,548	107.2%	5.0%
5	AZORIM	1,349	96.3%	5.0%
6	AFRICA RESIDENC	1,174	58.6%	5.0%
7	PRASHKOVSKY	929	90.1%	5.0%
8	LEVINSTEIN ENG	706	67.1%	5.0%
9	HAGAG	618	55.0%	5.0%
10	DUNIEC	574	77.7%	5.0%
11	MINRAV	528	34.9%	5.0%
12	MINRAV PRO	518	58.5%	5.0%
13	AURA	503	5.5%	5.0%
14	KARDAN REAL ES	400	35.2%	4.3%
15	HANAN MOR	342	62.4%	3.7%
16	SARFATI	336	74.7%	3.6%
17	ZMH	318	81.4%	3.4%
18	KARDEN ISRAEL	262	27.4%	2.8%
19	LESICO	240	37.1%	2.6%
20	ROTSHTEIN	220	14.3%	2.3%
21	ORON GROUP	215	0.9%	2.3%
22	AVIV	193	43.7%	2.1%
23	NETANEL GROUP	190	26.6%	2.0%
24	LIBENTAL	177	180.3%	1.9%
25	YBOX	146	33.2%	1.6%
26	B.YAIR	109	-34.7%	1.2%
27	YAACOBI GROUP	104	-20.1%	1.1%
28	MIRLAND	20	-73.0%	0.2%
		22,749		100.0%

TA-Investment Properties in Israel
	Company	Market Cap (million NIS)	Rate of Return YTD	Expected Weight
1	AZRIELI GROUP	31,664	37.5%	5.0%
2	MELISRON	9,619	34.7%	5.0%
3	AMOT	9,326	35.3%	5.0%
4	ALONY HETZ	8,703	40.1%	5.0%
5	AIRPORT CITY	8,557	42.2%	5.0%
6	INDUS BUILDING	6,593	50.5%	5.0%
7	BAYSIDE LAND	5,256	50.6%	5.0%
8	BIG	4,963	44.0%	5.0%
9	ISRAS	4,302	93.0%	5.0%
10	REIT 1	4,029	55.1%	5.0%
11	MEGA OR	2,883	108.0%	5.0%
12	PROPERT & BUIL	2,374	47.7%	5.0%
13	VILLAR	2,171	33.5%	5.0%
14	BLUE SQ REAL ES	2,107	42.3%	5.0%
15	SELLA REAL EST	1,992	68.3%	5.0%
16	ASHTROM PROP	1,925	42.9%	4.9%
17	MEDITR TOWER	1,683	83.0%	4.3%
18	LEVINSTEIN PROP	1,350	46.0%	3.5%
19	VITANIA	1,055	103.6%	2.7%
20	LAND DEV	1,039	34.3%	2.7%
21	MENIVIM REIT	794	38.8%	2.0%
22	MGURIT	690	-13.6%	1.8%
23	RANI ZIM	343	33.9%	0.9%
24	DORSEL	312	31.7%	0.8%
25	GOLDEN HOUSE	238	11.1%	0.6%
26	GABAY PROPERT	153	32.0%	0.4%
27	POLYGON	151	25.6%	0.4%
		114,273		100%

TA- Investment Properties Abroad
	Name	Market Cap (millions ILS)	Rate of Return YTD	Expected Weight
1	GAZIT GLOBE	7,015	24.4%	22.9%
2	AFI PROPERTIES	3,590	31.4%	11.7%
3	ALROV PROPERT	3,505	35.2%	11.5%
4	SUMMIT	3,084	44.4%	10.1%
5	BRACK CAPIT N V	2,887	-0.8%	9.4%
6	ADO	2,675	28.4%	8.7%
7	NORSTAR	1,884	33.1%	6.2%
8	CIM COM0.001$-L	1,286	10.5%	4.2%
9	ADGAR INV.	1,254	49.9%	4.1%
10	ELECTRA REAL E.	1,253	110.9%	4.1%
11	ASPEN GROUP	499	24.2%	1.6%
12	SKYLINE	477	2.1%	1.6%
13	MISHORIM	290	51.9%	0.9%
14	OPTIBASE	246	50.5%	0.8%
15	MEDIPOWER 0.1$	231	32.0%	0.8%
16	RAVAD	203	12.1%	0.7%
17	SAPIR CORP	200	-32.8%	0.7%
		30,578		100.0%