“I was appointed CEO of Housing and Construction in October 2005, after serving CEO of Shikun Ovdim. Shari Arison held talks for the sale of the company without consulting me. I thought this was a mistake, and told her that, even with the premium she was being offered, the deal was good for the potential buyers,” Housing and Construction Holding Co. Ltd. (Shikun u'Binui) (TASE: HUCN) CEO Uri Shani told “Globes” in an interview.
Shani described the turnaround of Housing and Construction, in which the company went from a loss of NIS 176 million in 2005 to a profit of NIS 186 million in 2006. The share has risen 70% since January 2006, and now has a market cap of NIS 2.5 billion, 40% more than the price offered Arison Holdings Ltd..
“We once had the idea that Solel Boneh Building and Infrastructure Ltd. (a Housing and Construction subsidiary) should do everything, including the production of its own concrete and stones. We said, ‘No more, there has to be a conceptual change.’ Now, Solel Boneh works only for us, and we have no intention of expanding beyond that. Arison Holdings considers Israel as its home, and operates emotionally on that basis. That does not mean, however, that we have to win every project that we go for,” said Shani.
“When you have such heavy losses, you simply cannot look ahead. We could not do that until we restructured.”
Commenting on the real estate industry, Shani said, “At the moment, all market sectors - income-producing properties, commercial building, and housing - appear to be flourishing. The global real estate market is cyclical, and it’s impossible to know whether the rise will continue for a few more years or end tomorrow. That’s why you have to be alert, in order to get out in time. In Israel, there’s a sense of momentum, land prices are rising, housing prices are going up, and the public has gotten used to a low dollar, so it’s no longer a threat. I’ve always thought that prices are not rising enough, because we always want them to go up. We’re already competing for quality, so we don’t just think about the apartment, but also about the adjacent park and schools. That’s where the competition will come from. We don’t build luxury high-rises, like Akirov for example.”
Shani once served as the Ariel Sharon’s chief of staff. He declined to comment on public issues, except to support privatization. “I think that the country must continue privatization, and privatize services, hospitals, schools, and the like, so that the public can get better service at lower cost,” he says.
Published by Globes [online], Israel business news - www.globes.co.il - on April 17, 2007
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