Big Shopping Centers publishes reports: all the numbers

Big Shopping Centers, one of the largest income-producing real estate companies in Israel, published its results this week for the second quarter of 2026 and presented an improvement in operating profitability alongside continued aggressive investment in new projects.

Net Operating Income (NOI) in the first half of the year reached approximately 956 million shekels, and the FFO — the operating cash flow used as the main metric for evaluating income-producing real estate companies — climbed by about 6.8% to approximately 532 million shekels. For millions of Israelis whose pension and provident fund money is invested in bonds and shares of companies like Big, these numbers are much more than just dry data.

At the bottom line of the report, a decrease was actually recorded: net profit for the half-year narrowed to approximately 548.5 million shekels, compared to about 671.6 million shekels last year. But here lies a point that is important to understand — the decrease stems mainly from exchange rate differences and a more moderate increase in the value of assets in the books, and not from a deterioration in the activity itself.

The FFO, which neutralizes these volatile accounting effects and reflects the current cash flow from renting properties, is what shows the true picture — and it has risen. In the second quarter alone, the NOI totaled about 492 million shekels and the FFO rose by about 5.9% to approximately 280 million shekels.

It is important to pay attention to a technical detail: the company reduced its holding rate in the subsidiary AFI Properties from about 87.7% to 79.9%, which dilutes AFI's contribution to the results. Neutralizing this effect, the growth rate is even more impressive — the FFO reflects an increase of more than 12% and the NOI an increase of 6.5%.

The figure that perhaps best illustrates the strength of the activity is the occupancy rate: in commercial properties in Israel it stands at about 100%, and in Europe at about 99%. In other words, there is almost no empty space in the group's centers.

Sales in Big centers in Israel rose by about 5.1% in the half-year, and in Europe the jump was even sharper — about 11.3%. The European activity, which spreads mainly over Poland, Serbia, and Romania, has become a significant growth engine: its NOI jumped by 15.3% to 48.2 million euros.

Alongside the flagship complex Big Glilot, the company is pushing a series of "Big Fashion" complexes under construction — in Petah Tikva (phase A, with an expected NOI of 164 million shekels and a projected yield rate of 8.5%), in Ashkelon, and in Ness Ziona. The total land for development of the group is estimated at about 838 million shekels.

Equity attributable to shareholders stands at about 13.4 billion shekels, and the company maintains high liquidity — about 1.04 billion shekels in cash and available credit lines of about 600 million shekels. A combination of almost full occupancy, growth in sales, and lively development activity transmits stability — an important asset for the institutional bodies that manage your savings.

However, it is worth remembering that a significant part of the value of the assets relies on valuations and capitalization rates, and a change in the interest rate environment or a slowdown in private consumption could affect the picture going forward.

Asaf Nagar, Deputy CEO of Big Shopping Centers, stated:

"The first half of 2026 was influenced by the consequences of the war with Iran. Despite this, at the level of sales, we present an increase of 5.1% compared to the corresponding period, while Big centers in Europe continue to present exceptional results with an increase of over 11%.

Alongside the increase in sales, we continue the development momentum of "Big Fashion" in Ashkelon, which is expected to open in 2028, as well as the development of the shopping center in Petah Tikva, which is expected to open in 2029. At the same time, we have returned to develop Big Fashion Ness Ziona, a center characterized by mixed uses of commerce, offices, and residences, and its construction is expected to be completed in 2030.

In Europe, we continue to expand, with an emphasis on Poland, which is establishing itself as a significant growth engine for the company, as after the balance sheet date we bought another center in the country and by the end of the year we will complete the opening of 4 more centers, and already during the next year we are expected to reach 20 active centers. In general, the activity in Europe continues to present double-digit growth year after year, as the first half ended with a growth of 15% in NOI, and we continue to look for additional opportunities in Poland and the Balkans in general."

At the same time, AFI continues to promote the portfolio of assets under construction, in addition to two significant acquisitions it made since the beginning of the year of an office complex in the Czech Republic and a portfolio of shopping centers in Romania for a total amount of over 400 million euros. In addition, during the period, we successfully completed the construction of the company's first wind project in Romania, which is expected to start generating revenues in full starting from the next quarter.

In the USA, the company has one last asset left intended for sale after we completed last month a sale transaction of another asset for 103 million dollars, a value higher than its book value. We intend to continue and shift the cash flow from the realization of assets in the USA in favor of continuing the expansion of activity in Europe.

The company's leverage ratio is at its lowest levels in years, which is reflected, among other things, in the upgrading of the rating of the company's unsecured bond series to AA and the updating of the issuer's rating outlook to positive. All this, alongside cash balances, credit lines, optimal debt spreading, and a low exchange rate, which although negatively affected the results of the activity for the period, allow the company to utilize business opportunities for acquiring assets at an attractive entry point.