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IDB's real estate activities are spread out over the width and breadth of the group, primarily in two huge companies - Azorim and Property & Building. Now, a year and a half after taking over IDB, Nochi Dankner is resolutely reorganizing the group's real-estate operations.

According to the working plan, Azorim and Property & Building will merge and the remaining real estate activity will be transferred from other IDB subsidiaries. The plan is for Azorim to buy out Property & Building.

Other options under consideration include Property & Building buying out Azorim or reorganization and transfer of all operations from all subsidiaries so that each company handles one sphere of activity - residential construction or yield-generating properties.

Azorim trades at NIS 1.5 billion, specializing mostly in residential projects. Property & Building trades at NIS 1.7 billion and focuses on commercial real estate and yield-generating properties.

IDB Development has a 63-percent stake in Azorim, while Discount Investments, an IDB Development subsidiary, has a 63-percent stake in Property & Building.

The logic behind P&B being the buyout target is that the property behemoth created, Azorim in this scenario, is closer to parent company IDB Holdings and to the controlling shareholders. Positive results as the real estate sector recovers in the coming years will reach the top faster. P&B controls Bayside Land Corporation, Mehadrin and Hadarim Properties. Azorim owns residential construction contractor Housing & Development.

Creating one large real estate company in the IDB group is logical; it will allow streamlining and cost savings and prevent duplication.

Yitzhak Tshuva made a similar move when he took over the Delek group. Tshuva established Delek Real Estate and transferred into it almost all of the various companies' real estate operations. It became the platform for major new investment in overseas properties and bought Dankner Investments.

One of the first steps toward the impending merger was a management shake-up at P&B last summer, with Nochi Dankner putting close associates into key positions. One of these was crony Rafi Bisker, who was appointed chairman of the board. Bisker had managed real estate operations at Nochi Dankner's Ganden group for 16 years and serves on several IDB boards.

Azorim is also gearing up for a management changeover: David Lev, who has served in several positions at Ganden, will replace Eitan Soroka, who announced his resignation as Azorim CEO a week ago. Bisker may also replace Azorim chairman Ronny Milo.