Israeli real estate giant Reit 1 reports profit decline
Reit 1, an income-producing real estate investment fund, concludes the first half of 2026 with a decrease in net profit and has downwardly revised its annual forecasts due to the impact of the military campaign.
Reit 1, the first and largest income-producing real estate investment fund in Israel, reported its financial results for the second quarter and the first half of 2026. Net Operating Income (NOI) rose by approximately 3% to 263 million NIS, compared to 255 million NIS in the corresponding period last year.
In the second quarter of 2026, NOI increased by approximately 2% to 135 million NIS (compared to 132 million in the same quarter last year). This growth was primarily driven by the full yield of the property in Beit Shemesh, completed in 2025, and income from an additional 50% stake in a property acquired this March.
Same-store NOI recorded a decrease of 0.7% for the half-year and 1% for the second quarter. Key factors included temporary property shutdowns for improvement works, reduced parking revenues due to the military campaign against Iran, and the absence of one-time compensation from a tenant for early lease termination, which had boosted last year's figures. Excluding these effects, same-store NOI rose by 2.5% in the first half and 2.2% in the second quarter.
Adjusted FFO reached 180.7 million NIS (approx. 0.89 NIS per share), compared to 180.5 million NIS (0.92 NIS per share) in the same period last year. In the second quarter of 2026, adjusted FFO totaled 93.2 million NIS (0.46 NIS per share) versus 93.6 million NIS (0.48 NIS per share) in the corresponding quarter of 2025.
Shmulik Rofe, CEO of Reit 1. Photo: Neti Levi
The change in adjusted FFO reflects higher NOI offset by increased real financing expenses. The decline in FFO per share is primarily attributed to equity offerings conducted in August 2025 and March 2026.
Net profit for shareholders stood at 219.4 million NIS, compared to 291.5 million NIS in the first half of last year. Second-quarter 2026 profit was 150.4 million NIS, down from 202.4 million NIS in the same quarter of 2025, largely due to higher positive fair value adjustments on investment properties in the previous year.
Reit 1 has updated its 2026 forecasts:
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NOI estimate: 535–540 million NIS (previously 535–545 million).
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Adjusted FFO estimate: 365–370 million NIS (1.81–1.83 NIS per share) compared to the original 369–379 million NIS (1.82–1.87 NIS per share).
The revision is mainly due to the war's impact on parking revenues and delays in obtaining occupancy permits. The company notes that 2026 estimates include a 6 million NIS reduction in NOI resulting from ongoing property improvement projects.
