Israel Freezes the Data Center Land Rush for 140 Days

Monday was about power, in both senses. Israel’s electricity regulator froze new grid hookup requests for large data centers for 140 days, until December 7. The pile of requests had reached about 27,000 megawatts. Israel’s average electricity use is about 9,000 megawatts. Mega Or, the company that turned data center land into a fortune, fell sharply during the day.

Regulators said no twice more. Melisron withdrew its proposed Rishon LeZion mall acquisition after receiving indications that the Competition Authority was unlikely to approve it. Meanwhile a government team that spent three and a half years studying the betterment levy, the tax a city charges when planning makes your land worth more, published a 95 page interim report that changes very little.

Two deals moved. Delek Nechasim and Kibbutz Galil Yam will build a commerce and jobs complex next to Herzliya. Hod Hasharon signed the old Coca Cola depot plan into force, turning it into an office and leisure district.

And in Jerusalem, a balcony on KKL Street collapsed onto a bakery on Monday evening. An 80 year old man was killed. An engineer had inspected that same balcony hours earlier.

Israel just pulled the plug on the data center land rush

The Electricity Authority published decision 74506 on Monday, July 20. It is a temporary order, called a hora’at sha’ah in Hebrew, which means a rule with a built in expiry date.

What it does: Noga, the company that runs Israel’s grid, must stop accepting and stop answering connection requests from data centers of 8 MVA and upward. The decision uses MVA, a unit of apparent power. MVA and megawatts are different measures; converting between them depends on the power factor.

The freeze runs 140 days and expires on December 7, 2026. The public can send written comments until August 19. Projects that already hold a signed commitment from Noga and are in technical coordination are not affected.

Why now. In the weeks after the June 15 hearing, information requests for data center connections totaling about 19,000 megawatts came in. They landed on top of about 8,000 megawatts of requests already open. That is about 27,000 megawatts in the queue.

Our math, so you can feel the size of that. Israel’s average electricity consumption is about 9,000 megawatts. The all time peak was about 17,000 megawatts during the extreme heat of August 2025. On Monday afternoon, the hottest day of this year so far, the country used 14,655 megawatts. So the request pile is about 3.0 times average national consumption and about 1.6 times the highest demand Israel has ever recorded. Basis: 27,000 divided by 9,000, and 27,000 divided by 17,000. Consumption figures per Walla Money, July 20. This is our arithmetic, not an official ratio.

The market reacted fast. Mega Or opened sharply lower and closed lower, per Merkaz HaNadlan; Calcalist and Bizportal reported the same closing drop. Mega Or has seven data center projects in progress, targeting 314 megawatts of IT capacity, plus land held for roughly 280 megawatts more. Those include a project for Nvidia at Mevo Carmel and one for Nebius in Beit Shemesh. The freeze applies according to each request’s status. Projects with a legally signed commitment and reserved capacity that were already in technical coordination fall within the decision’s stated exception. TheMarker reports a roughly 1 billion shekel Mega Or investment in Hadera is now stuck for at least five months. Doral and Nofar Energy slipped too.

For two years, data center developers have been the loudest bidder for industrial and logistics land, and for land near substations. That bidder has been sent to the waiting room until December. If you are buying, selling, or valuing employment zone land, the competition just thinned out for five months. If you own land you were hoping to sell into that boom, the buyer’s urgency is gone for now.

Sources: Electricity Authority decision 74506 (plenum session 745, dated July 15, published July 20), Globes, Ynet, Calcalist.

Three and a half years of work, and the betterment levy stays broken

First, the term. A betterment levy, heitel hashbacha, is a charge a local authority collects when a planning decision raises the value of your land. The general rate is half the assessed increase in value, but statutory exemptions and special rates can apply. You usually pay it when you sell, or when you take out a building permit.

The problem everyone agrees on: you can be taxed on rights you may never actually get to use. A plan is approved, your assessed value jumps, the bill arrives, and the permit that would make those rights real is still years and several discretionary decisions away.

On Monday the inter ministerial team set up to fix this published its interim report, after three and a half years. It was co chaired by Deputy Attorney General for civil law Adv. Carmit Yulis and Interior Ministry Director General Israel Ozen, and set up by a government decision in February 2023. Globes puts it at 95 pages.

What it actually recommends now:

• A narrow change of law, so the tax event moves to the permit stage only for plans containing “conditional rights”, meaning rights that still need a further planning decision before a permit can issue, and for plans that lack concreteness.
• Approval of a master plan that cannot by itself produce a permit should not be a tax event at all. When a detailed plan later grants firm rights, the increase is measured from the earlier state, ignoring the master plan.
• Binding deadlines for assessments, from the local committee’s appraiser through to the deciding appraiser, with default rules if a deadline is missed.
• An appraisal method for urban renewal that matches recent court rulings, and a standing joint legal and appraisal forum.

What it declined to do is the important part. The report states plainly that the team recognizes the advantages of moving the tax event wholesale, “but does not recommend at this stage adopting the proposal in full.” Four deeper reforms were parked for later study: uniform tariffs by land use and area, scrapping the levy and leaning on capital gains tax instead, reviving a sale tax, and a one time sale tax on newly built assets. The team did not recommend creating a national redistribution fund at this stage. It recommended further examination coordinated by the relevant ministries, including the Interior and Finance ministries.

The reaction split cleanly. Haim Feiglin, deputy president of the Israel Builders Association, called it “a great disappointment” and noted the levy dates from the 1960s and is modeled on a British rule Britain scrapped long ago. Adv. Ohad Yarak of Firon said that if the recommendations are adopted in legislation it would be “a real revolution”. Adv. Tomer Gur of Arnon Tadmor-Levy was blunter, saying the report mostly perpetuates an endless theoretical argument and will “provide a great deal more work for lawyers and appraisers”. Adv. Zvi Shov warned that moving the assessment to the permit stage means signing “an open cheque” to the local authority, because values will have risen by then. A source on the team told Globes that most of the problems can be solved by the short term recommendations alone.

If you own land or an old apartment inside a plan, nothing changed today. A bill is not law, and this is not even a bill yet. Moving the valuation date could change the assessed betterment. The effect would depend on the legislation, property values and applicable exemptions; a later date does not necessarily produce a larger levy. We covered the related win for sellers earlier this month in Court Scraps a Hidden Tax for Israeli Home Sellers.

Sources: the team’s interim report (full PDF), Globes, Merkaz HaNadlan, Magdilim, TheMarker.

A solar tax break for farmers died when the Knesset dissolved

Same tax, different casualty. A bill would have cut the betterment levy by half for agrivoltaic projects, meaning solar panels built above growing crops on farmland. It passed the Knesset’s Interior Committee, chaired by MK Yitzhak Kroyzer, in May 2026, with support from both coalition and opposition. It never reached a final vote. When the Knesset dissolved, the bill died with it.

The practical effect is that owners of small farm plots now face the full levy on the potential value uplift. A national outline plan approved on February 15, 2026 had already shortened permits for projects up to 80 dunams from three to five years down to around 18 months. The tax was the remaining obstacle. Eitan Parnes, CEO of the Green Energy Companies Association, called the dissolution “an earthquake that will stop the most promising branch of solar energy in Israel”.

If you own or are buying a nachala, a farm holding, the solar income case just got worse until a new Knesset revisits it. We wrote about the wider legislative freeze in Home Prices Crack as Israel Heads to Elections. Source: Globes, July 20.

Melisron withdrew its mall acquisition after regulatory opposition

Melisron, controlled by Liora Ofer and one of Israel’s two biggest mall owners, has given up on buying control of Kanyon HaZahav in Rishon LeZion from Migdal Insurance. It formally withdrew its merger notice on July 20 after eight months of talks with the Competition Authority and its commissioner, Adv. Michal Cohen.

The background. The September 2025 agreement covered a stake in the mall, with an option to buy more. Separately, at the end of June, Migdal bought the remaining stake from brothers Moshe and Yigal Gindi. The mall opened in 1993 and now has about 34,700 square meters of above ground lettable space. Migdal keeps full ownership.

Melisron said it believed the transaction did not raise a competition concern justifying nonapproval. It nevertheless chose to withdraw after prolonged discussions and indications that the Competition Authority was unlikely to approve the deal.

Israel’s retail property market is concentrated in very few hands, and the regulator has now shown it will block consolidation even when the buyer has no local overlap. For anyone valuing a mall or a large retail strip, the pool of likely buyers is smaller than the balance sheets suggest.

Sources: Globes, Ynet, Merkaz HaNadlan, Calcalist, all July 20 to 21.

Delek reports a conditional development agreement with Kibbutz Galil Yam

Delek Nechasim signed an agreement with Kibbutz Galil Yam and its Hutzot Galil Yam cooperative. The kibbutz assembly approved it last Friday and the company reported it to the Tel Aviv Stock Exchange on July 20.

The plan: about 17,000 square meters of commerce and employment space, plus 260 parking spaces, at the kibbutz entrance beside Herzliya. The agreement provides for equal ownership after the agreed allocation is completed, subject to its conditions.

The land is two adjoining employment zoned plots totaling about 8.4 dunams, with rights from the “Ramat HaSharon West, Northern Compound” national housing plan. The joint company owns one plot and has a tender exempt right to buy the other 4.4 dunams from the Israel Land Authority. The ILA’s valuation arrived in June and both sides intend to appeal it. Closing depends on a revised valuation where lease fees plus development costs stay under a ceiling set in the agreement. If the final amount exceeds the contractual ceiling, Delek may waive that condition within 30 days; without a waiver, the agreement becomes void.

Delek Nechasim is owned by Lahav L.R., Uri Mantzur and Delek Petroleum, controlled by Yitzhak Tshuva. Its CEO is Felix Shofman.

Watch the appeal, not the ribbon cutting. The whole deal hinges on what the state charges for 4.4 dunams. That is the same fight playing out on kibbutz and moshav land all over the center, and it decides whether these joint ventures happen at all. Source: Merkaz HaNadlan, July 20, reporting the company’s stock exchange filing.

Hod Hasharon turns an old Coca Cola depot into a business district

Mayor Amir Kochavi, acting as chair of the local planning committee, signed the Coca Cola compound plan into force on Monday. Signing into force is the final step: the plan now has legal effect, and permits come next.

The existing logistics buildings go. In their place: one central tower, three buildings of up to 12 floors, and one of 6 floors. The plan allows about 58,700 square meters of employment, commerce and leisure space, plus about 15,700 square meters of public buildings and public space. It also widens the entrance to the Eco Park Neve Neeman employment zone, widens HaHarash Street, adds an urban square, and protects Nahal Kana, the stream running through the area. The municipality is pushing for a future metro link, and the Transport Ministry is looking at light rail. Architects: Peleg Architects.

Hod Hasharon has long been a place people sleep and commute out of. The mayor’s stated goal is to cut that commute. If it works, it changes what a Hod Hasharon home is worth relative to Herzliya and Ra’anana. That is a ten year story, not a this year story. Sources: Magdilim, Sharon Online, July 20.

The metro is heading east, and the planners overruled the metro company

Read this one carefully, because most coverage got the stage wrong. Several outlets wrote “finally approved”. It is not approved.

On Monday the National Infrastructure Committee decided to publish notice of the preparation of a plan to extend metro line M1 eastward, from its already approved terminus in Kfar Saba to the planned Eastern Railway. That is the first statutory step, not the last. The plan has not been deposited for objections and it is not in force.

The extension is about 2.5 kilometers with two new stations: one in the Yoseftal neighborhood, and a “Kfar Saba North” hub combining metro, heavy rail and park and ride. The route chosen is the western alternative, mostly underground.

The interesting part is the argument. NTA, the company promoting the metro, recommended against building the Yoseftal station, because its demand forecasts were low. The committee added it anyway, on the Planning Administration’s recommendation, pointing to plan TML/2040 under which Yoseftal grows from about 930 homes to about 4,200. The committee also rejected a proposal to link the approved Ra’anana and Kfar Saba metro arms, because it would cut service frequency.

A station that the transit operator did not want, added because of a housing plan, is a strong signal about where the state expects Kfar Saba to grow. It is also years from certain. Treat “metro is coming” pitches near Yoseftal with the caution you would give any pre statutory plan. Sources: Calcalist, Globes, July 20.

A balcony fell in Jerusalem hours after an engineer looked at it

On Monday evening a balcony collapsed from a building on KKL Street in Rehavia, Jerusalem, onto an Angel bakery branch below. An 80 year old man was killed. His wife and two teenagers, aged 17 and 16, were lightly hurt. Police opened an investigation on suspicion of criminal negligence.

The detail that turns this from a tragedy into a market story: an engineer had been called to examine that balcony after problems were spotted, and had been on site hours before it fell, ordering barriers and immediate repairs.

Israel’s most desirable central neighborhoods are also its oldest building stock, and balconies, railings and cantilevered slabs are the first things to fail. If you are buying an older apartment in Rehavia, the German Colony, central Tel Aviv or Haifa’s Hadar, an engineer’s report is not a formality. Ask specifically about the balconies and about any open repair order on the building. If you rent, you are entitled to know about a structural warning on your building.

Sources: Calcalist, Ynet, Kan, July 20.

Why a rental fund now demands deeper discounts from developers

Sharon Toussia-Cohen founded the residential REIT Rent It in 2022. A REIT is a listed fund that owns income producing property; this one buys apartments in bulk and rents them out. He gave an unusually frank interview published Tuesday morning.

His headline point: the discounts the fund used to accept from developers are no longer enough, and it now asks for noticeably deeper ones. Crucially, he says the discount is measured against prices actually transacted in or near the project, not against the developer’s price list. That distinction matters, because a list price is whatever the developer decides to print.

His reasoning is equally blunt: the freeze in apartment sales “creates a window of opportunity for us. Developers get stuck with inventory. Some are willing to give up a large part of the remaining development profit, and sometimes all of it.”

The fund holds hundreds of apartments, including an interest in a 341-apartment Ashdod project held jointly with Migdal, 120 in Modi’in, similar counts in Karmiel and Kiryat Gat, and holdings in Netanya. Its most recent purchase was 52 apartments in Hadera from Aura. It has raised its required return, and it listed on the stock exchange in August 2025 and raised bonds in November.

The fund’s bulk-purchase terms do not establish what discount an individual buyer can obtain. Compare recorded transactions and the terms of the specific property. Background: Why Developers Are Offering Incentives Now. Source: Merkaz HaNadlan, July 21.

What the official price and rent numbers actually say

Two official documents are in play, and outlets have been mixing up their periods all week. Here is the clean version, straight from the releases.

From the Central Bureau of Statistics, release 222/2026, published July 15, apartment prices fell on both measures CBS reports. The monthly figure compares transactions done in April to May 2026 against transactions done in March to April 2026. It is a two month pair, not a calendar month. The annual figure compares April to May 2026 with April to May 2025. By district the picture is mixed: the Center, Haifa, Tel Aviv and the South fell over the year, while the North and Jerusalem rose slightly. CBS flags these as not final, because more transactions from the period have yet to be reported.

Now the point almost nobody reported properly. New apartment prices fell in the headline index. But CBS itself checked what happens if you strip out government subsidized deals, and the index rose. The reason is mix: subsidized sales grew as a share of new home transactions. So on the free market, new home prices ticked up. The fall in the headline is partly a change in who is buying, not only in what things cost.

On rent, from CBS release 223/2026, also July 15, tenants who renewed a contract saw a smaller rent rise than tenants who moved to a new apartment. CBS states clearly that both figures approximate the annual rate of change, not a monthly one, because most tenants sit on a fixed contract all year. Any report presenting the new tenant figure as a monthly jump is wrong.

CBS compared average rent changes for renewed contracts and homes where the tenant changed. Those groups do not show what the same household would pay by staying or moving; compare the actual rent offers and moving costs.

One honest discrepancy to flag. The Bank of Israel’s Monetary Policy Report for the first half of 2026, published July 20, gives a different annual fall in home prices than CBS’s annual comparison. The two use different reference windows. If you see either figure quoted alone, check which one it is. The same Bank of Israel report also covers the housing component of the consumer price index and new mortgages taken in May 2026.

The release shows larger average rent increases where tenants changed, but it does not measure an individual household’s savings from renewing. For new-home sales, the same release reports different movements for the overall index and the index excluding government-supported transactions.

Sources: CBS release 222/2026, CBS release 223/2026, Bank of Israel Monetary Policy Report, July 20.

If your building was damaged in the war, these are the six places the law now covers

The trade press ran this Monday as a new website launch. We checked the government site directly, and the material went up between June 4 and July 13, so treat it as a resource, not as news. The content itself is solid and worth knowing, because it is hard to find anywhere else.

Under the war damage rehabilitation law, six rehabilitation zones have been formally declared so far. Each is a named compound, not a whole city:

• Tel Aviv, Yehuda HaLevi
• Ramat Gan, Tirtza
• Bnei Brak, the Brandstetter compound
• Rehovot, the Teller-Bilu compound
• Dimona, Yoseftal
• Arad, HaKanaim and Shimon

The Government Authority for Urban Renewal has also published a recommended “exit agreement” (published July 2, updated July 12). This is the document that lets an owner sell all their rights to the developer for cash, and go buy a replacement apartment themselves, instead of waiting years for a rebuilt unit. The agreement is written to transfer to whichever developer is eventually chosen for the compound.

If your building sits in one of those six compounds, the exit agreement is a real fork in the road: cash now and buy elsewhere, or wait for the new flat. Most owners will never be told this option has an official template. We explain how the law itself works in Israel’s New War-Damage Rebuild Law. Sources: the Government Authority for Urban Renewal landing page and its documents page, checked July 21; write up by Merkaz HaNadlan, July 20.

Restaurants can shrink, and their landlords will feel it

The Health Ministry’s food business licensing reform took effect on Monday, on the minister’s signature. It cuts a long list of space rules for the roughly 23,500 food businesses in Israel.

Gone or eased: minimum dining area, minimum kitchen area, minimum space for a serving counter (which creates a new “micro restaurant” category), separate staff changing rooms, minimum ceiling height, compulsory storeroom space, signage requirements, and minimum passage widths. The ministry expects savings of billions of shekels over the coming years, from lower fit out costs, lower rent, and lower arnona, the municipal property tax charged by the square meter. Israel’s food sector is a major part of the economy.

Arnona and rent are both charged per square meter. If a café can legally operate in 60 square meters instead of 90, demand shifts toward smaller ground floor units and away from big ones. If you own or are buying a large retail ground floor space aimed at food tenants, that is a real change in your tenant pool. If you are opening a business, your rent budget just got smaller. We covered how arnona classifications hit occupiers in Israel’s 2026 Arnona Shift.

Sources: Calcalist, Globes, both July 20.

An insurer just lent to a builder, while the banks are being told to slow down

Eco City, an urban renewal developer, signed a 200 million shekel credit facility with Menora Mivtachim on Monday. The term is six years, with an average duration of 2.5 to 3 years.

Some context on the company. Eco City is controlled by the Reality Fund, alongside Poalim Equity, with managing partners Ili Bar and Dudu Reshef. In the past month it bought an execution company holding an unlimited G5 contractor classification, which is the top Israeli licence tier and lets it build without a size cap. It reports higher first half 2026 sales, is currently executing 12 projects, and says five more start within six months.

Bank credit to residential projects has drawn regulatory attention all month, and banks are being nudged to tighten. This is the other side of that trade: insurers and institutions stepping into the gap, lending directly to builders. For a buyer, the practical question is unchanged and simple. Ask who finances the project, which regulator oversees that lender, and what protection secures your payments. Banks and insurers operate under different supervisory frameworks. Background: Israel Housing: Financing Is Holding It Up.

Sources: Merkaz HaNadlan, Bizportal, both July 20. Company sourced, so the sales growth claim is the company’s own.

184 buyers, one contractor, and a file that just moved to Tel Aviv

Partly verified: the case files are confirmed in the court registry, but we could not confirm the exact date the order was given. Reported this week.

A Supreme Court consolidation order has pulled together the claims against developer Arzei HaNegev, controlled by Oded Shariki, over late delivery in Bnei Brak. We pulled the actual dockets, which none of the coverage did.

• File 33319-05-26, a consolidation of actions before Justice Ruth Ronen, opened May 12, 2026. It was brought by the Bnei Brak Municipality and its local planning committee.
• File 16957-10-24, Tel Aviv District Court, before Judge Hezi Eliyahu: exactly 184 named plaintiffs, claiming damages for late delivery.
• File 55566-09-24, Be’er Sheva District Court, before Judge Geula Levin: a request to certify a class action under the Consumer Protection Law.

The effect is that the Be’er Sheva class action request moves to Tel Aviv to sit with the 184 buyer suit. Two corrections to the coverage: this is an administrative consolidation decision, not a ruling on the merits, and it sets no precedent. And “184” counts individual plaintiffs, mostly couples, so roughly 100 households. The project is a Mehir LaMishtaken (buyer’s price) development in the Sofrim compound, where Arzei HaNegev built about half the roughly 3,000 units.

Late delivery claims are the most common thing that goes wrong for buyers of new Israeli apartments, and they usually get fought one buyer at a time. Consolidation is how they get real weight. If you are buying off plan, read the delay compensation clause before you read the kitchen spec. Source: the Israeli court registry, plus ice, July 20.

Haifa has a whole department for buildings nobody wants

Haifa runs what appears to be Israel’s first municipal department dedicated to reviving abandoned buildings, set up about a year ago and headed by Vitaly Dubov-Dotan, an urban economist and city planner. Its methods are unusual for a city: proactive enforcement, cross department round tables, area mapping, ranking buildings by urgency, then approaching owners and offering to walk them through renovation.

The reports use different measures. TheMarker described an abandoned-building inventory. Haifa Municipality’s June 29 statement counted private properties wholly or partly exempt from arnona because they were recognized as damaged or destroyed, and said its dedicated department was actively handling cases. Those categories should not be treated as interchangeable counts.

An abandoned building is an owner with a problem, and that is where below market deals live. Haifa Municipality says it has mapped affected properties and opened cases with owners, developers and government bodies. Source also: Hai Po, Haifa.

Mayors sketch a western Negev of 840,000 people

A vision document, not a plan. It has no statutory status.

On Monday morning the Western Negev Cluster of Authorities, a voluntary grouping of 11 local authorities, presented a 2048 development target to its member mayors at a two day conference. The target: 840,000 residents by 2048 and 142,000 new homes, up from about 331,000 residents today. An interim milestone puts the region past 500,000 by 2035. The intended mix is mostly urban, with a rural share.

Per town, the 2048 targets include Netivot at about 224,000 (from about 59,000 today), Rahat about 183,000, Ofakim about 128,000, Sderot about 94,000 and Lakiya about 49,000. The document’s own framing is a warning: left unmanaged, the population could approach a million. Presented by cluster CEO Bella Alexandrov, with Sderot mayor Alon Davidi chairing.

Do not price land off this. It is a group of mayors agreeing on an ambition, and no planning institution has adopted it. What it does tell you is which towns local leadership intends to push hardest, and Netivot is the standout. Source: Be’er Sheva and Negev News, July 20.

Key dates through the December 7 freeze

Frequently asked questions

What did the Electricity Authority decide?

It froze new grid connection requests for large data centers until December 7, 2026. Projects with a signed commitment from Noga that are already in technical coordination are not affected.

Does the betterment levy report change anything today?

No. It is an interim report, not a bill and not law.

Is the Kfar Saba metro extension approved?

No. The committee only decided to publish notice of the preparation of a plan, which is the first statutory step.

Did new apartment prices really fall?

The headline index fell, but CBS found the free market part of the index rose once subsidized deals were removed.

Sources

Primary documents: Electricity Authority decision 74506; the betterment levy inter ministerial interim report; CBS apartment price release 222/2026; CBS consumer price release 223/2026; Bank of Israel Monetary Policy Report, first half 2026; the Government Authority for Urban Renewal war damage pages; the Israel Land Authority tender database; the Israeli court registry.

Reporting: Globes, Calcalist, TheMarker, Ynet, Merkaz HaNadlan, Magdilim, Bizportal, Walla Money, Kan, ice, Sharon Online, Be’er Sheva and Negev News, Hai Po.

The calculation marked “our math” is our own derivation from the figures shown, not an official statistic. Tracking parameters have been stripped from every link.