Gav-Yam Reports 12% Revenue Growth and Increases ToHa2 Tower Valuation
The income-producing real estate company saw an increase in rent and management fees during the second quarter of 2026. Ahead of the project's completion, Gav-Yam has revalued its 50% stake in the ToHa2 tower at 1.9 billion shekels.
The income-producing real estate company Gav-Yam is opening the reporting season in the local market. The company, managed by Natalie Mishaan-Zakai, ended the first quarter of 2026 with revenue growth driven by an increase in rent and management fees charged on its properties. Alongside the results, the company recorded an upward revaluation of one of its flagship projects, the ToHa2 tower, which is in the final stages of construction.
Gav-Yam's revenues in the second quarter totaled approximately 241 million shekels, an increase of about 11.5% compared to the same period last year. For the half-year, the company recorded a similar increase, bringing total revenues to approximately 476 million shekels. This growth is attributed to the occupancy of newly completed properties and the leasing of vacant spaces. In addition, Gav-Yam benefited from the rise in the Consumer Price Index, alongside a real increase in rent and management fee income.
Similarly, in the NOI (Net Operating Income) line, Gav-Yam recorded a growth of about 12%, with the figure totaling about 208 million shekels in the second quarter and 410 million shekels in the first half of the year. NOI from identical properties grew by 6%, standing at about 190 million shekels in the second quarter and 368 million in the first half.
On the other hand, Gav-Yam presented a slight decrease of about 1% in net profit, which stood at approximately 239 million shekels for the quarter. For the half-year, net profit decreased by 4% to approximately 395 million shekels. This was mainly due to the increase in financing expenses, stemming from a higher debt volume and the average interest rate on it.
The decrease in net profit comes despite significant revaluation gains presented during the first half, though they were lower than those reported last year. Gav-Yam recorded the bulk of the revaluation gains in the ToHa2 project, which it holds jointly with Amot, and which is expected to be completed in the final quarter of the year.
"Challenging business environment"
As part of the quarterly reports, Gav-Yam published a new valuation for the ToHa2 tower, which will include about 200,000 square meters of leasable space. According to the new valuation, the value of Gav-Yam's 50% stake in the tower stands at about 1.9 billion shekels, yielding revaluation gains of about 190 million shekels. This is based on the assessment that the property will yield an annual NOI of 150 million shekels upon full occupancy. The company notes that lease agreements have already been signed, or are in advanced negotiations, for about 75% of the space in the tower.
"Gav-Yam continues to present strong results in a challenging business environment," said Gav-Yam CEO Natalie Mishaan-Zakai. "We are meeting the growth targets we set for ourselves at the beginning of 2026, and we expect the company to meet the three-year forecasts presented earlier this year for a growth of about 50% in NOI and FFO attributable to shareholders."
According to her, "The expansion of technology companies, which are among the clients of the company's high-tech parks and operate in the AI field, leads to high demand for office space and laboratories. Therefore, the company is working on planning and licensing seven additional projects, with a scope of about 296,000 square meters, which will be our future growth engine."
