Azrieli Group (AZRG) investor relations material

Executive summary

• NOI and FFO remained stable or showed moderate growth year-over-year, with strong performance in malls and senior housing, and continued expansion in global data centers.

• Net income for Q2 2026 was NIS 155 million, down from NIS 320 million in Q2 2025, mainly due to lower investment property revaluation and higher financing expenses.

• Operations are primarily in Israel, with significant expansion in global data center activities and a robust development pipeline.

• Dividend of NIS 850 million was distributed in May 2026; a public share offering raised NIS 1,394 million net.

• The group maintains a low net debt-to-assets ratio of 37% and high liquidity, with NIS 4.5 billion in cash and NIS 39.7 billion in unencumbered assets.

Financial highlights

• Q2 2026 NOI was NIS 651 million, up slightly year-over-year; FFO was NIS 426 million, stable year-over-year.

• Retail segment NOI rose 9% to NIS 261 million; senior housing NOI up 16% to NIS 29 million; office NOI up 4% (excluding one-time items) to NIS 230 million.

• Data centers NOI was NIS 103 million, down from NIS 115 million due to FX, but up 3% net of forex effects; contracted MW reached 275MW.

• Net income for Q2 2026 was NIS 155 million; comprehensive income showed a loss of NIS 548 million, impacted by FX and market losses.

• Cash and deposits stood at NIS 4.5 billion as of June 30, 2026.

Outlook and guidance

• Development projects and data center expansion are expected to contribute significantly to future NOI and FFO.

• Full occupancy of projects under development and new contracts in the data center segment projected to increase annualized NOI by 37% and FFO by 50%.

• The group expects continued growth from its development pipeline, with nine projects under construction or planning, totaling ~650,000 sqm.

• Macroeconomic forecasts anticipate GDP growth of 4.0% in 2026 and 5.5% in 2027, with inflation at 1.8%.

• The company remains cautious due to ongoing geopolitical risks and potential delays in project completions.