These results were published on Wednesday, 29 July 2026. We cover them here to complete the picture of the Israeli earnings season.
Gav-Yam reported a first half that was strong on every operating measure - and net profit that actually fell.
What was reported
| Q2 | Year ago | Change | |
|---|---|---|---|
| Rental and management fee income | 241 | ~216 | +11.5% |
| NOI | 208 | ~186 | +12% |
| Same-property NOI | ~190 | ~179 | +6% |
| FFO | 118 | ~108 | +9% |
| Net profit | 238.5 | 242.4 | -1.6% |
In millions of shekels
And across the half: NOI of NIS 410 million (+12.3%), FFO of NIS 232 million (+9%), EBITDA of NIS 382 million (+12.7%) - and net profit of NIS 395 million, down 4%.
The puzzle, and the explanation
How does every operating measure rise by double digits while net profit falls?
The answer is revaluations. Revaluation gains on investment property in the first half totalled NIS 388 million - a large sum, but lower than the one booked a year earlier.
And why that is actually a good sign
Revaluation gains are not cash. They are a reassessment of the value of an asset the company continues to hold.
NOI and FFO, by contrast, are money actually received - rent collected, less operating and financing costs.
When NOI rises 12% and net profit falls 4%, it means the ongoing business strengthened and revaluations moderated. In terms of earnings quality, that is the preferable direction - recurring income rather than an accounting estimate.
And financing expenses rose to NIS 115.2 million from NIS 95.4 million, which also weighs on the bottom line.
The measure that shows quality: same-property
Same-property NOI - meaning the same buildings only, with no new additions - rose roughly 6% in the quarter and 6.4% in the half.
This is the measure separating growth that comes from building from growth that comes from pricing. Gav-Yam is not only adding space - it is charging more for the space it already has.
And the figure confirming it: 84 lease agreements were signed in the first half, at an average real increase of 4.2% above the index. In the second quarter alone: 28 agreements at a real increase of 4.8%.
A real increase above the index means rents are rising faster than inflation - so there is genuine demand, not merely indexation.
Occupancy
Roughly 97%, across 1.3 million square metres in 18 cities. For comparison: 96% in the first half of 2025, and 95% at end-2024.
In an office market suffering from oversupply in many parts of the world, 97% is a very strong number.
ToHa 2: the asset that moved the revaluation
Gav-Yam's 50% stake in the ToHa 2 tower in Tel Aviv was revalued upward to NIS 1.9 billion, generating a revaluation gain of roughly NIS 190 million.
And what justifies the revaluation is the leasing: roughly 75% of the 200,000 square metres is signed or in advanced negotiation - against just 43% at the first quarter, including Google as a tenant.
At full occupancy, the tower is expected to yield roughly NIS 150 million of annual NOI.
Guidance
Full-year 2026 FFO guidance was raised to NIS 450-460 million, against NIS 432 million booked in 2025.
A methodological note: we encountered conflicting sources on the full-year NOI guidance, and so do not present it here. The FFO guidance is corroborated across consistent sources.
My Angle
A personal opinion of Ilan Abramov - not advice, not a recommendation
This is the kind of report easily misread because of one line.
Net profit fell, so the headline looks negative. But in income-producing property, net profit is almost the least important measure - it is dominated by revaluations, which are estimates rather than money.
What does matter rose by double digits: NOI plus 12%, FFO plus 9%. And what matters most is the third measure: same-property NOI plus 6%. That says the growth is not only from building - it is also from pricing.
And the number I take from the report is 4.2%. That is the average real increase across the 84 leases signed in the half - above the index. In a market where many properties settle for indexation, Gav-Yam is actually raising prices.
And what I will check next quarter: ToHa 2. Going from 43% to 75% committed in three months is very fast, and the difference between "signed" and "in advanced negotiation" is exactly what will determine whether the NIS 190 million revaluation is justified.
