Kvutzat Acro sells land in Tel Aviv's Compound 3700 for ₪34.5 million

Kvutzat Acro reports a partial exercise of an option to sell rights in the sought-after north Tel Aviv compound. Transaction proceeds: ₪34.5 million, of which ₪10.3 million was paid immediately and will be used to reduce debt.

Kvutzat Acro reported a partial exercise of an option to sell rights in Compound 3700 (the Mandarin Compound) in north Tel Aviv. The transaction, concerning plots 60 and 61, yielded proceeds of approximately ₪34.5 million. An immediate amount of ₪10.3 million was transferred to the company and will be used for the partial repayment of an existing loan on the land. Concurrently, the deadline for exercising the remaining options in the compound has been extended until the end of 2026.

Kvutzat Acro Ltd. (TASE: ACRO) reported significant progress on the major option transaction for the sale of its rights in Compound 3700, also known as the "Mandarin Compound" in north Tel Aviv. The company announced that the option recipient has exercised part of the option agreement, acquiring the rights in plots 60 and 61 for a total amount of approximately ₪34.5 million, including VAT.

The current transaction constitutes part of a staged option agreement, originally signed in May 2025, which allows a third party to acquire Acro's rights in the compound in several stages. According to the report, the partial exercise generated an immediate cash flow of approximately ₪10.3 million for the company. This amount, as noted in the company's announcement, will be used for the partial repayment of an existing loan on the land, a move that reduces Acro's leverage and financial exposure to the project. The remainder of the transaction proceeds, totaling approximately ₪24.2 million, is expected to be paid by the purchaser's financing entities by December 31, 2027.

As a direct result of the partial exercise, the parties agreed to extend the deadline for exercising the remaining unexercised parts of the option. The deadline for exercising the remaining real estate included in part A of the option, as well as parts B and C, has been postponed to December 31, 2026. This postponement grants the purchaser additional time to complete the acquisition of the remaining rights in the coveted compound while leaving the full potential of the transaction intact for Acro.

Regarding profitability, Acro notes that the expected profitability rate from the partial exercise is similar to the rate presented in the original transaction figures in May 2025. However, the company emphasizes that the final profit amount will be derived, among other things, from the volume of loans the purchasers will take out to complete the remaining consideration. The reason for this is that, according to the agreement's terms, Acro is the one that will bear the interest costs for these loans, a detail that adds a degree of uncertainty to the final bottom-line profit to be recorded from the transaction.

The transaction represents another step in realizing Kvutzat Acro's significant real estate assets while generating value and strengthening the company's capital structure.