Azrieli Group (AZRG) Q2 2026 earnings summary

Executive summary

• NOI increased to NIS 651 million in Q2 2026, with real growth across key segments, though FX volatility and one-time items impacted reported results; FFO remained stable at NIS 426 million.

• 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 0.5% year-over-year; FFO was NIS 426 million; revenues totaled NIS 949 million.

• Retail segment NOI rose 9% to NIS 261 million, driven by higher rents and CPI impact; average occupancy rate 99%.

• Offices segment NOI was NIS 230 million, up 4% year-over-year excluding one-time items; average occupancy rate 96%.

• Data centers NOI was NIS 103 million, down from NIS 115 million in Q2 2025 due to FX, but up 3% net of FX effects; contracted MW reached 275MW.

• Senior housing NOI increased 16% to NIS 29 million, supported by high occupancy and medical department contributions.

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%.

• New data center agreements in London and Norway will begin contributing NOI in 2027; construction in Mainz and Undheim progressing for delivery by 2027-2028.

• Management remains confident in sustaining growth momentum, especially in AI infrastructure and European data centers.