HaSolelim project boosts Mivne's financial performance

Following seven quarters of moderate growth of up to 5% in Net Operating Income (NOI) from its Israeli operations, the occupancy of the HaSolelim project has triggered a significant jump in Mivne's performance. The company's NOI rose by 10% in the second quarter of 2026 compared to the same period last year, reaching 239 million shekels. AFFO (Adjusted Funds From Operations), the standard metric for assessing profitability in income-producing real estate, rose by 15% to 178 million shekels.

Beyond the improvement in NOI, AFFO was further bolstered by a reduction in operating expenses. Mivne's primary activity remains in Israel, where it holds 556 income-producing assets. Local operations generated 229 million shekels in NOI, an 11% increase, accounting for 96% of the company's total NOI.

The company's flagship project, HaSolelim in Tel Aviv, comprises 68,000 square meters of office space and 360 apartments. The residential component is developed in partnership with Tidhar, with Mivne holding a 75% stake. By the end of June, 73% of the office space had been leased, a 3% increase over end-of-2025 figures. This occupancy contributed an additional 14 million shekels to the quarterly NOI. Furthermore, leasing vacant spaces in other assets and rent increases in renewed contracts yielded an additional 15 million shekels.

The company also maintains residential development activity with 546 apartments under construction. Reflecting a sector-wide slowdown, sales at HaSolelim have been sluggish, with only two apartments sold during the quarter and one more since early July, compared to ten in the same quarter last year. There are 109 apartments remaining for sale in the project.

HaSolelim's occupancy increased the yield contribution of office assets from 30% of total NOI in Q1 2026 to 34%. This aligns with the strategic plan presented by CEO Uzi Levy in 2024, which targets a 45% contribution by 2028. Currently, industrial and logistics assets remain the primary income drivers, accounting for 40% of NOI, or 92 million shekels.

Two additional projects are currently under construction:

A project in Herzliya (24,000 sqm of offices and 103 apartments), expected to complete in 2028 with an annual NOI of 35-39 million shekels.
A data center in Petah Tikva (25% stake), expected to complete in late 2027, with an annual NOI of 27-30 million shekels. Financing of 700 million shekels was recently provided by Bank Hapoalim and Bank Discount.

Mivne has raised its annual AFFO forecast to 660-680 million shekels, while maintaining its NOI forecast at 930-950 million shekels. Mivne's market capitalization stands at 8.8 billion shekels. In June and early July, the company's largest shareholder, David Forer, increased his stake to 23.8% through a 216 million shekel share purchase.