Mizrahi Bank left, but Beit Mani recovered: Behind the Sela Capital Real Estate reports
The evacuation of the bank's offices in the Moshe Aviv Tower resulted in a loss of about 3 million shekels, but new leases and the deal in Kfar Saba boosted half-year revenues to 206 million shekels.
Revenues of the income-producing real estate company Sela Capital Real Estate in the second quarter of the year rose by about 7.1% and the NOI increased by about 6.8%. In the first half, revenues rose by about 5.1% to about 206 million shekels, and the real FFO grew by about 4.2% to about 127.7 million shekels - this is the bottom line from the second quarter report of the year.
According to the data, the volume of investment real estate crossed the 6.6 billion shekel threshold, and the equity grew to about 2.93 billion shekels. The "Kfar Saba HaYeruka" mall has already contributed about 10 million shekels to the half-year revenues, alongside continued leasing in Beit Mani and the marketing of spaces in the Moshe Aviv Tower. Also, during the reporting period and after it, the company completed the leasing of additional spaces in Beit Mani, and the occupancy rate in the property currently stands at about 62% (including 10% in advanced engagement processes). The company is accelerating marketing and leasing activity and is promoting advanced negotiations for the leasing of additional spaces in Beit Mani, alongside active marketing of the spaces that were vacated in the Moshe Aviv Tower following the departure of the Mizrahi Bank management.
Financial results for the second quarter
The company's revenues from rent and property operation totaled about 105 million shekels, compared to about 98 million shekels in the corresponding quarter last year, an increase of about 7.1%. The NOI totaled about 94 million shekels, compared to about 88 million shekels in the corresponding quarter last year, an increase of about 6.8%.
The real FFO rose by about 5% and totaled 63.6 million shekels, reflecting about 25.8 agorot per share. The net profit in the second quarter totaled about 50 million shekels, compared to about 65 million shekels in the corresponding quarter last year.
The decrease in profit is mainly due to a decrease in fair value adjustments of investment real estate (about 31 million shekels in the second quarter of 2026 compared to about 47 million shekels in the corresponding period last year) and an increase in financing costs in the amount of about 4 million shekels, mainly due to an increase in interest expenses resulting primarily from an increase in the weighted interest rate and an increase in the company's credit volume.
First half results
The company's revenues in the first half totaled about 206 million shekels, compared to about 196 million shekels in the corresponding half last year, an increase of about 5.1%. As mentioned, the growth was mainly due to first revenues in the amount of about 10 million shekels from the "Kfar Saba HaYeruka" mall, the effect of linking rent to the index, and an increase in rent upon renewal of agreements. On the other hand, the departure of the Mizrahi Bank management from the Moshe Aviv Tower reduced revenues by about 3 million shekels.
The NOI in the first half totaled about 184 million shekels, an increase of about 4.5% compared to about 176 million shekels in the corresponding period. The Same Property NOI totaled about 175.4 million shekels, a minor decrease of about 0.3%, mainly following the evacuation of Mizrahi Bank spaces in the Moshe Aviv Tower. The real FFO in the first half rose by about 4.2% and totaled 127.7 million shekels, compared to about 122.6 million shekels in the corresponding period, and reflects about 52.6 agorot per share. The net profit in the half totaled about 77 million shekels.
In April 2026, Sela Capital Real Estate completed the acquisition of all rights in the "Kfar Saba HaYeruka" mall in exchange for about 580 million shekels. The property spans about 75 thousand square meters and is leased at an occupancy of about 93% to about 100 tenants. The expected annual NOI from the property at full occupancy stands at about 40.5 million shekels, reflecting a yield of about 7% relative to the purchase price.
The company's board of directors approved the distribution of a dividend for the second quarter in the amount of 36 million shekels, representing 14.25 agorot per share. The company estimates that the annual dividend for 2026 will not be less than 146 million shekels, about 57 agorot per share.
Shmuel Slavin, Chairman of the Board of Directors of Sela Capital Real Estate, stated:
"The results of the first half demonstrate the resilience of Sela Capital Real Estate's operating model and the ability to continue and grow even in a period characterized by high interest rates and economic uncertainty. We are entering the second half of the year with a broader portfolio, a solid financial base, and significant potential for increasing cash flow from existing assets."
