Azrieli Group reports: Mall revenues rise, but net profit declines

The Azrieli Group, managed by Dana Azrieli, concluded the second quarter of 2026 with a slight increase in net rental income (NOI), which totaled approximately 651 million shekels, compared to 648 million shekels in the same quarter last year. The company's Funds From Operations (FFO) also rose slightly to approximately 426 million shekels.

The group owns 23 malls and commercial centers in Israel with a total leasable area of approximately 387,000 square meters. During the quarter, revenues in this sector grew by 8.3% as activity recovered following the "Lion's Roar" operation, which had forced temporary closures. The company estimates the operation's impact on sectoral results at approximately 7 million shekels.

NOI in the commercial centers and malls sector reached 261 million shekels, compared to 239 million shekels last year. This figure was affected by a 3,000-square-meter reduction in the Azrieli Mall's leasable area due to construction work connecting it to the Spiral Tower. Once completed, the project is expected to expand commercial space by approximately 16,000 square meters.

Decrease in the Data Centers sector

In the Data Centers sector, where Azrieli operates primarily abroad, NOI decreased to 103 million shekels from 115 million shekels in the corresponding quarter. However, the company recently signed two new agreements in London and Norway, which are expected to contribute a combined annual NOI of approximately 125 million shekels.

Azrieli maintains high occupancy rates: approximately 99% in Israeli commercial centers and Data Centers. Assisted living and residential rental sectors in Israel show occupancy rates of approximately 97% each, while office and other rental spaces in Israel are at 96%. Conversely, the occupancy rate for income-producing real estate in the USA stands at approximately 64%.

Net profit for the Azrieli Group fell to 155 million shekels, down from 320 million shekels in the same quarter last year. The company attributes this primarily to a 202 million shekel reduction in revaluation profits from investment property, alongside higher administrative, general, and marketing expenses, as well as increased net financing costs.

This decline was partially offset by a 65 million shekel increase in the company's share of results from associated companies, a 30 million shekel rise in the gross profit of Tzemach Hamerman, and a 65 million shekel decrease in tax expenses.