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Investing.com -- Azrieli Group (TASE:AZRG) shares fell 0.5% in Tel Aviv trading following the release of its second quarter financial results and the announcement that CEO Ron Avidan plans to step down.
The real estate company reported a 16% year-over-year increase in NOI (Net Operating Income) to NIS 648 million, driven by same-property NOI growth of 4%. However, FFO (Funds From Operations) decreased 1% compared to the same period last year, reaching NIS 425 million.
During the second quarter, Azrieli invested NIS 1.2 billion in development, capital expenditures and acquisitions, doubling the NIS 0.6 billion invested in the first quarter.
The company maintained stable 99% occupancy in its mall properties, but experienced a temporary decline in office occupancy, which fell 400 basis points quarter-over-quarter to 94%. This drop was attributed to a tenant departure at the Sarona Tower. Senior housing occupancy also decreased slightly by 100 basis points to 98%.
Management reported increased interest in central Tel Aviv office space, with nearly 60% of the vacated Sarona Tower space already leased at rates between NIS 165-180 per square meter monthly. The company expects to make progress on leasing the remaining 40% by year-end.
In August, Azrieli entered an agreement to supply 36 MW in data center services (50% share), with the customer having an option to increase capacity by an additional 18 MW. The average annual NOI from the 36 MW capacity is expected to be approximately €51 million (total share).
Avidan, who was appointed CEO on April 1, 2025, has informed the board of his decision to step down after less than five months in the position.
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