Amot lowers forecast following the war, but already sees recovery
Amot has lowered its 2026 forecast due to a slowdown in office leasing caused by the war with Iran. Despite this, management reports a recovery in demand since the end of hostilities and expects improved operational metrics next year.
Leasing in the office tower that Amot is building in Bnei Brak is progressing slowly, the occupancy rate in office properties has decreased, and the war with Iran has delayed the signing of new contracts. Against this backdrop, the income-producing real estate company lowered its forecast for 2026, although it has identified a recovery in office marketing since the end of the war and expects this to be reflected in operational metrics next year. Amot shares are climbing by 2% in trading on the Tel Aviv Stock Exchange following the release of the reports.
The income-producing real estate company concluded the second quarter of 2026 with an NOI (Net Operating Income) of 270 million shekels, an increase of 3% over its volume in the corresponding quarter in 2025. The FFO, which measures cash flow from real activity and is considered the accepted metric for examining the profitability of income-producing real estate companies, rose as a result by 4% to 212 million shekels.
Despite the improvement recorded, Amot updated its forecasts for the year-end downwards. The upper limit of the NOI range was lowered from 1.1 billion shekels to 1.08 billion, and that of the FFO range was lowered from 810 million shekels to 800 million. The company explained this by the delays recorded in reaching contract signings — under the influence of the war with Iran — which subsequently caused a delay in leasing dates and, as a result, in the receipt of expected revenues from them.
However, in an investor call held, Amot CEO Shimon Abudraham noted that the trend since the end of the war is the opposite, and there is an emerging increase in demand and willingness of tenants to reach binding contracts for leasing office space, mainly in the Tel Aviv area. According to his assessment, this will be reflected in an improvement in operational metrics next year.
Amot relies in its operations mainly on the office properties it leases, which were responsible for 47% of the quarterly NOI in the quarter. Alongside them, it also operates in the fields of logistics and industry (29% of NOI) and commerce, including supermarkets. However, given the difficulties in the office market, this reliance challenges it. While occupancy in its other properties reached 96% or more in the quarter, in office properties it stood at 83.7%, a decrease compared to the occupancy rate recorded at the end of 2025, which was 86.7%.
One of the reasons for this is the departure of the company Payoneer, which rented 8,000 sqm from Amot in a property in Petah Tikva, and Amot is interested in realizing the vacated property. Beyond it, the Amot Holon campus also stands out, where there are 47,000 sqm of offices (the company's share) which was inaugurated back in 2022, but occupancy there stood at 60% until recently. However, engagements to lease an additional 10% in it and to lease 50% of the areas of a property in Modiin are expected to lead to a renewed increase in office occupancy data in the coming quarters.
Beyond that, by the end of the year, Amot is supposed to finish the construction of an office project in the Lehi complex in Bnei Brak, where there are 87,000 sqm of offices for rent (its share 50%). However, Amot, which estimates the annual NOI from it given full occupancy at 44 to 48 million shekels, has so far leased only 10% of the office space in it. In contrast, in the flagship project, the ToHa2 building which Amot is building with Gav-Yam in Tel Aviv, and where there are 154,000 sqm of offices for marketing that are supposed to yield an NOI of up to 165 million shekels upon full occupancy, progress has been recorded in marketing rates. And after these stood at 39% at the end of 2025 — which is 60,000 sqm that Google rented, by the end of June the two had already engaged in signed contracts and are in advanced negotiations to lease 75% of its areas. However, Amot will be able to meet the progress in its revenues only starting from the third quarter of 2027 — when the start of the building's occupancy is expected.
In the investor call, Abudraham noted that in the HaShalom CBD, where the project is located, a shortage of office supply is expected, and therefore rental prices there, which in ToHa stand at about 150 shekels per sqm at the shell level, are expected to remain high in the coming years, and that Amot aims to start the construction of the nearby ToHa3 project next year, where there are more than 100,000 sqm of offices, and to build two more large office projects nearby later on.
Amot will distribute a dividend of 133 million shekels in September. Amot shares have fallen by 25% since the beginning of the year, compared to a 7.5% decline recorded in the TA-Maniv Israel index in which it is included, and it has shown underperformance relative to the other large income-producing real estate companies (in terms of market cap), Azrieli, Melisron, Big, Mega Or, Mivne, and Gav-Yam.
Raz Domb, a real estate analyst at Leader Capital Markets who spoke with Calcalist, explained that "Amot's quarterly report tells a story we already knew and is not surprising, with slight growth in operational parameters alongside challenges in occupying vacant spaces. Amot shares have underperformed since the beginning of the year, against the backdrop of exposure to the office market. At the same time, the current pricing already reflects most of the risks and the downside in exposure to the stock is relatively low, and it should be remembered that this is a high-quality and financially stable company with a strong portfolio of assets in good locations, which provides a nice dividend yield."
