Amot CEO: "There is a revival in the office market, but it is still difficult to close deals outside Tel Aviv"
Amot CEO Shimon Abudraham reports an increase in office market activity following the ceasefire, particularly in the Tel Aviv CBD, while noting that deals outside the city remain challenging. In the ToHa2 tower, contracts and advanced negotiations cover about 75% of the space. The company's NOI rose by 3%, and net profit climbed by 10% to 329 million shekels.
The second-quarter earnings season is gaining momentum, providing a snapshot of the office market, which has been dealing with excess supply and a slowdown in activity. However, according to Shimon Abudraham, CEO of Amot, the second quarter of 2026 saw a revival in office market activity following the ceasefire at the end of Operation "Lion's Roar".
Abudraham's remarks came during an investor call following the release of financial results for the income-producing real estate company, which is 50% controlled by Nathan Hetz's Alony Hetz holding company.
Reports show that the office market occupancy rate decreased slightly from 84.3% in the first quarter to 83.7% in the second, compared to 86.7% at the end of 2025. Nevertheless, Abudraham emphasizes that Amot continues to see increased demand, primarily in the Tel Aviv CBD.
In the company's new ToHa2 tower in Tel Aviv, expected to be occupied in early 2027, contracts have been signed and advanced negotiations are underway for about 75% of the leasable space. However, Amot cautions that "there is no certainty that such negotiations will mature into binding agreements".
First lease agreements at The Park
If these negotiations mature into contracts, it represents a significant increase from the previous quarter's 43% occupancy. The tower's anchor tenant, Google, has signed a 10-year lease for 20 floors at approximately 115 million shekels per year.
Abudraham notes that occupancy at the Amot Holon campus has risen by 10% to nearly 70%, up from 55% at the end of 2025. Simultaneously, Amot is nearing a lease agreement with a major defense company for the Amot View building in Modiin's technology park.
Abudraham also addressed the company's The Park project in Bnei Brak, a 45-story tower. He previously cited difficulties in leasing the building due to delays in the Green Line light rail project. Alongside this, he noted the challenge of closing deals in Tel Aviv's second and third rings. However, the company is now nearing the signing of its first two leases at The Park, with occupancy expected in March 2027.
Amot's NOI for the second quarter grew by 3% to approximately 270 million shekels, compared to 263 million in the same quarter last year. FFO amounted to 212 million shekels, a 4% increase from 203 million, while net profit rose 10% to 329 million shekels from 298 million.
Amot shares are traded on the Tel Aviv Stock Exchange with a market cap of 9.14 billion shekels, reflecting a 26% decline year-to-date, compared to a 10% drop in the TA Real Estate Israel index.
