The growing demand for new office space for Israel defense companies continues to surge. Income producing property company Vitania (TASE: VTNA) has reported a deal in which it will lease to defense electronics company Elbit Systems Ltd. (Nasdaq: ESLT; TASE:ESLT) 40,000 square meters of office space for NIS 500 million.

Elbit will lease an entire building in the Vitania-Landa project in the Ness Ziona Science Park. A building is currently under construction there that combines industrial space, laboratories and offices covering 40,000 square meters and a 23,000 square meters underground parking lot. The lease period is for 24 years and 11 months, with Elbit having its first exit point after 17 years and 9 months. The total rent for the lease period up to the first exit point is NIS 544 million, with occupancy scheduled for July 2026.

The lease agreement between Elbit and Vitania is the latest real estate deal in a large-scale wave for defense companies, which began due to the Russia-Ukraine war and the war in Israel starting October 7 and the rising demand for weapons systems, defense technologies and intelligence that has created an unprecedented wave of orders among defense companies. This has required the industry to expand rapidly and establish new production infrastructures at an accelerated pace.

Vitania, controlled by the Ungar family, is currently managed by Yariv Bar-Dea and is traded on the Tel Aviv Stock Exchange with a market cap of NIS 971 million. The company owns income-producing properties covering 200,000 square meters. The project in Ness Ziona was originally planned for Benny Landa’s printing company, which ran up debts of NIS 1.7 billion and filed a request for a stay proceedings in the summer of 2025. As a result, Vitania suffered a decrease in value of NIS 80 million following the collapse of the printing company.

Vitania was represented in this deal by Adv. Eyal Marom of the Gornitzky GNY law firm. Elbit was represented by Adv. Ilan Kremer of the Firon law firm.

Published by Globes, Israel business news - en.globes.co.il - on May 31, 2026.

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