Alony Hetz 2025: Value Is Building Fast, Cash Is Moving Up Slowly

Company Overview

At first glance, Alony Hetz looks like a real-estate name trading at a discount to NAV. That is only part of the story. Alony Hetz is first and foremost a holding company sitting on top of several very different engines of value: Amot provides the stable cash anchor in Israel, Energix provides growth and embedded value through development, Brockton Everlast holds meaningful UK development optionality, and CARR moved in 2025 from an equity-accounted investment into a controlled platform with the operating and financing responsibility that comes with it. The key question here is not only how much the portfolio is worth, but how quickly that value can move upstream and become accessible cash at the parent.

What is working now? The group still has a real anchor, Amot. It ended 2025 with NOI of NIS 1.06 billion, occupancy of 93.3%, and expected 2026 dividends of NIS 323 million. At the same time, Energix remains a major growth engine, with 1.7 GW and 0.5 GWh connected at year-end 2025, and a path to 2.3 GW and 0.6 GWh by the end of 2026. Brockton and CARR also hold assets and land banks that can create meaningful value over the coming years.

What is still not clean? A large part of that value still sits in layers that require capital, financing, leasing, and execution. In 2025 the parent received NIS 661 million of dividends from its holdings, but NIS 156 million of that came from CARR through a Dividend Reinvestment Plan rather than as cash. Actual cash dividends were NIS 505 million. That is the heart of the thesis: value is compounding faster than cash is moving upstream.

That is also why the practical bottleneck here is not immediate balance-sheet distress. On an expanded solo basis, the company ended 2025 with equity of NIS 5.6 billion against the tightest covenant floor of NIS 2.2 billion, net debt to holdings value of 48.2% against an 80% ceiling, net debt to FFO of 11.5 against a ceiling of 25, and NIS 700 million of unused credit lines, of which NIS 675 million remained unused around the presentation date. The issue is not covenant pressure. The issue is the timing of monetization.

The quick economic map looks like this:

The right way to read the company is therefore as a holdco with a stable income-producing real-estate layer, and an international development-heavy layer that can generate a great deal of value, but not necessarily at the same pace at which it generates upstream cash for common shareholders.

Events And Triggers

CARR moved from accounting option to operating responsibility

The defining event of 2025 was the step-up to control in CARR. In July 2025, Carr Holdings redeemed JPM's holdings by transferring three properties to JPM, Signal House, 1701 Duke Street, and 1875 K Street, with total value of USD 241 million. At the same time, Alony Hetz invested USD 100 million into CARR. After the deal, Alony Hetz's stake in Carr Holdings rose to 89.14%, and CARR was consolidated for the first time starting in the third quarter.

Why does that matter? Because it changed both the numbers and the burden of proof. On one hand, the company recognized a gain of about NIS 116 million from stepping up to control, since the transaction was executed at roughly a 10% discount to NAV at the time. On the other hand, it recycled about NIS 396 million of negative reserves into profit and loss, with no effect on total equity. That is why the 2025 attributable net profit line looks far weaker than the operating economics underneath it. Anyone reading only the NIS 7 million attributable profit is missing the point.

The parent still relied on capital markets to keep the portfolio moving

During 2025, the company invested NIS 1.175 billion into its holdings, including NIS 417 million into CARR, NIS 212 million into Brockton Everlast, NIS 163 million into Energix, and NIS 150 million into Amot. In addition, NIS 156 million was reinvested into CARR through DRIP. Against that, the company raised net debt proceeds of NIS 770 million through the expansion of series 13 and issuance of series 16 and 17, and raised NIS 351 million of equity through warrant exercises.

The message is two-sided. The company clearly still has good market access. But it is equally clear that the parent is not yet in a phase where it is only harvesting cash from the portfolio. It is still funding it.

Amot remains the anchor, and ToHa II is the cleanest catalyst in the portfolio

Amot remains the easiest piece of the story to underwrite. Occupancy stood at 93.3% at year-end 2025, NOI reached NIS 1.06 billion, and management-approach FFO was NIS 804 million. The big trigger is ToHa II. Amot signed a lease with Google for 60 thousand sqm in shell and core, for a 10-year term beginning in early 2027, with annual rent of NIS 120 million. Total construction cost is NIS 3.3 billion, expected NOI at full occupancy is NIS 320 million, and completion is expected in the fourth quarter of 2026.

That matters because Amot is not only the stable cash anchor. It also holds the clearest operating catalyst in the entire group.

Brockton and CARR are creating value options, but together with funding needs

Brockton Everlast began execution in 2025 on the Dovetail project in London, received planning consent for a 720 thousand square foot science campus at Cambridge Science Park North, and entered into refinancing agreements totaling GBP 239 million. On paper, that is real progress. In practice, Dovetail still requires GBP 520 million of additional investment, including GBP 100 million of equity, while its stabilized NOI of GBP 52 million is still ahead rather than current.

CARR, for its part, has more strategic control now, but it is entering a year in which expected 2026 NOI and FFO are both below 2025. That means the market now needs to see not just ownership control, but operational delivery.

Energix remains a value engine, not necessarily a cash engine

Energix expanded its overall pipeline in 2025 to 10.3 GW and 14.8 GWh, entered financing transactions with aggregate volume of about NIS 4.8 billion, and expects to end 2026 with 2.3 GW and 0.6 GWh connected. But at the parent level, expected 2026 dividends are only NIS 114 million. So anyone building the whole Alony Hetz story around Energix needs to separate value creation from immediate upstream cash.

Efficiency, Profitability, And Competitive Position

Amot still provides the highest-quality cash flow in the portfolio

Amot remains the highest-quality piece of the puzzle. Its weighted average cap rate was 6.33% at the end of 2025, net financial debt to assets declined to 42.6%, and same-property NOI rose to NIS 1.039 billion. Its internal mix is also reasonable: offices contributed 47% of NOI, logistics and industrial 28%, retail 18%, and supermarkets 5%.

The interesting point is that NOI is still moving up, while FFO is not following at the same pace. That means the improvement in asset value and project quality is not yet translating one-for-one into faster cash generation. Amot is a real anchor, but not a complete solution to the parent-level tension.

That is why the market can still give Alony Hetz credit. But it is also why Amot alone cannot close the whole gap between value and upstream cash.

CARR is no longer just a promise, but it is not yet a clean earnings engine either

CARR ended 2025 with 7 income-producing assets, 2.3 million sqf of leased space, and WALT of 10.7 years. There is also an important disclosure caution here: the summary table in the directors' report shows a 92.6% leasing rate, while the investment note on CARR shows 86.7% occupancy for the same date. That gap is not trivial, and it means investors should stay careful even with the platform's most basic operating metric. Beneath that, this is still a portfolio in motion: two assets were sold before the JPM transaction, three were transferred to JPM, another office asset was acquired after the balance sheet date, and at the same time the company is advancing three residential projects totaling 851 units.

This chart explains why the move to control is not a one-way positive story. The company gained more flexibility, but it also inherited a weaker earnings base. NOI declined from USD 150 million to USD 137 million in 2025, with 2026 forecast at USD 128 million. FFO declined from USD 63 million to USD 57 million, with 2026 forecast at USD 50 million. In other words, control has increased, but the earnings base has softened.

The office-market sensitivity is still real. At 100 Congress, notice by a major tenant not to renew led to changes in operating assumptions and a negative revaluation. Management's sensitivity analysis shows that a 0.25% increase in cap rate would reduce CARR's asset value by about USD 37 million, or about USD 33 million at the company share. This is no longer just an upside-on-paper story. It is a real operating portfolio with real market risk.

Brockton looks better operationally, but it is still a maturation platform

Brockton Everlast may be the most interesting part of the portfolio, but it is also the easiest place to overstate the story. Its FFO rose in 2025 to GBP 20.1 million from GBP 12.4 million in 2024, despite a slight decline in NOI to GBP 41.9 million and a drop in occupancy to 94.8% from 97.3%. That means the improvement came more from the fading of prior-year noise and some operating normalization than from a sharp acceleration in recurring income.

Brockton still reads as a project story rather than a coupon story. Dovetail can eventually produce GBP 52 million of stabilized NOI, but before that it still has to move through funding, execution, and pre-leasing. This is exactly the kind of asset that can increase NAV while doing very little for near-term parent cash.

Energix adds strategic optionality, but parent quality is still judged by cash extraction

At the Energix level, 2025 itself was weaker operationally. Revenue from electricity and green certificates fell to NIS 755.7 million from NIS 856.2 million, and project EBITDA fell to NIS 596.6 million from NIS 740.7 million. Part of the decline came from lower output and weaker effective power pricing in Poland and the US.

But the strategic angle should not be missed. Energix now talks explicitly about Data Centers, expansion into MISO, and a target of 4 GW and 2 GWh by the end of 2027. That helps explain why the market is still willing to pay for this kind of development platform. At the Alony Hetz level, though, the simpler conclusion is this: Energix is generating value faster than it is generating parent cash.

Cash Flow, Debt, And Capital Structure

The right cash lens starts with expanded solo economics

To understand Alony Hetz, it is critical to separate two valid cash views. The normalized parent cash-generation view shows what is coming upstream. In 2025 the parent received NIS 661 million of dividends, NIS 22 million of management fees, paid NIS 165 million of finance expenses, NIS 33 million of G&A, and NIS 9 million of current tax, resulting in solo operating cash flow of NIS 476 million.

But the all-in cash-flexibility view is less comfortable. The parent invested NIS 1.175 billion in its holdings and paid NIS 207 million of dividends to shareholders. In other words, operating cash at the parent did not fund the full group-level capital agenda. The gap was bridged by new debt and new equity.

This is the number that matters most. In 2025 about 23.6% of total dividends did not arrive in cash. Even in 2026, based on the forecast, about 19.4% of total dividends still come via DRIP. Anyone looking only at the NIS 661 million headline for 2025 or NIS 635 million for 2026 is missing the quality-of-cash issue.

There is no balance-sheet squeeze, but there is still a monetization gap

At the balance-sheet level, there is no immediate stress story here. The parent has no pledged properties, all of its financial debt, excluding currency-hedging liabilities, is in public bonds, and ratings remain Aa3 with stable outlook at Midroog and ilAA- with stable outlook at Ma'alot. In addition, the presentation shows total credit lines of NIS 700 million, of which NIS 675 million remained unused at publication.

This chart captures the tension between the bullish and cautious views. Under IFRS, expanded solo leverage stood at 49.8% at the end of 2025. On an adjusted NAV basis it was 35.8%, and the presentation already updated that to 35.6% as of March 15, 2026. So the optimistic case is not fictional. The portfolio really is worth materially more than book value suggests. But the cautious case is not fictional either. Debt is serviced with cash, not with NAV slides.

The covenant table makes clear that this is not an immediate stress case:

Financing is manageable, but it is not cheap

Precisely because the balance sheet is not under pressure, it is important not to understate the cost of money. In the February 2026 immediate report, the interest paid on series י' for the period from November 30, 2025 through February 27, 2026 was 1.5653%, implying an annualized rate of 6.35%. That is not distress, but it is also not cheap funding. Every delay in turning value into cash matters more in that rate environment.

In addition, CARR is already showing a tighter asset-level financing structure, including a roughly USD 280 million loan secured by three assets. At the property level, that is perfectly legitimate. At the portfolio level, it is a reminder that even if the parent itself is unencumbered, part of the upside still sits under more leveraged structures.

Outlook

First finding: the 2025 attributable earnings line is almost useless on its own. The NIS 396 million reserve recycling tied to taking control of CARR weighed on reported profit, without hurting total equity.

Second finding: adjusted NAV of NIS 10.1 billion, or NIS 44.5 per share, already shows a very large gap between economic value and accounting value. But a share price of NIS 34.23 in early April still leaves a discount of about 23% to adjusted NAV.

Third finding: Amot is still the safety cushion in the thesis, with expected 2026 dividends of NIS 323 million and ToHa II as a clear operating catalyst.

Fourth finding: CARR and Brockton hold significant future value, but 2026 itself still does not look like a harvest year. CARR is guiding to NOI of USD 128 million and FFO of USD 50 million, both below 2025, while Brockton is guiding to NOI of GBP 41 million and FFO of GBP 19 million, both slightly below 2025.

That leads to the main conclusion: 2026 is a bridge year with proof points. It is not a reset year, because there is no balance-sheet crisis. It is also not a clean breakout year, because the pieces that justify the biggest upside are still in leasing, execution, or capital-deployment mode.

What the market will measure at Amot

The first thing the market will track is the pace at which ToHa II and Amot's development pipeline move toward full contribution. The company is showing a path from annualized NOI of NIS 1.089 billion to NIS 1.411 billion, with NIS 66 million from occupancy and new space, and NIS 256 million from development projects. That is high-quality upside, but the market will want to see real progress, not only an underwriting model.

What the market will measure at CARR

At CARR the test will be far more operational than accounting-driven. Now that control has already been taken, the key question is whether NOI and FFO stabilize, whether 100 Congress stops weighing on the platform, and whether the residential pipeline advances without becoming another open-ended capital sink. The 1401 New York acquisition signed after the balance sheet date reinforces that point: the portfolio is still being reshaped, and 2026 needs to prove that the new base can actually perform.

What the market will measure at Brockton

At Brockton the test is even clearer. Dovetail needs to advance, pre-leasing needs to start taking shape, and Cambridge Science Park needs to keep moving. If that happens, Brockton can move from being a nice NAV story to a much more concrete value source. If it does not, it remains a long-duration investment that consumes patience and capital.

What the market will measure at Energix

At Energix the test is the move from 1.7 GW and 0.5 GWh connected at the end of 2025 to 2.3 GW and 0.6 GWh by the end of 2026. The forecast for NIS 1.28 billion to NIS 1.37 billion of full-year revenue will tell the market whether this growth platform is finally entering a stage in which the parent benefits more visibly through cash, not only through value.

Why this is a bridge year rather than a breakout year

The reason is that the company is now in the middle of a two-layer transition. On one hand, the portfolio has improved: more control at CARR, better visibility at Amot, deeper growth at Energix, and more optionality at Brockton. On the other hand, a large part of that improvement has not yet become accessible cash. Over the next two years, the Alony Hetz story will be shaped less by whether value exists, and more by the order in which that value becomes available.

Risks

Accessible value versus economic value

This is the main risk. Alony Hetz can show high adjusted NAV, high equity, and a quality asset base, and still remain at a stubborn discount if the market concludes that not enough cash is reaching the parent quickly enough. DRIP is the clearest example. It increases investment exposure, but it does not pay the parent bondholders.

FX can still move the picture faster than operations

At December 31, 2025 the company had net foreign-currency assets of NIS 2.812 billion, about 50% of equity. Net FX exposure around the report date stood at roughly NIS 2.4 billion, about USD 291 million and GBP 340 million. In 2025 the shekel appreciated by 12.6% against the dollar and 6.13% against sterling, hurting OCI and some of the results at the holdings level. Anyone buying Alony Hetz is also buying the currency exposure.

The US office market is still not done interfering

CARR has improved control, not removed risk. The negative revaluation triggered by 100 Congress, the sensitivity to a 0.25% move in cap rates, and the need to keep leasing and refinancing all point to a US office exposure that can still slow the closing of the discount.

Brockton still depends on execution, financing, and pre-leasing

At Brockton the option value is large, but so is the sensitivity. Dovetail requires GBP 520 million of additional investment, including GBP 100 million of equity. If pre-leasing or financing slips, the value does not disappear, but its accessibility to shareholders moves further out.

Energix still depends on both execution and large customers

In Poland, AXPO Polska bought all of the physical power generated by Energix's five wind farms, and revenue from AXPO reached about NIS 339 million, roughly 45% of Energix's consolidated revenue. In the US there is currently no single customer above 10%, which is healthier. But at the group level, the dependence on execution, power pricing, tax-equity structures, and project financing remains meaningful.

Conclusions

Alony Hetz ends 2025 stronger at the portfolio level, but not simpler at the parent level. Amot still carries the cash story, CARR has moved from shared control to much stronger operating control, Brockton is expanding the future value option, and Energix keeps a deep growth runway. The main bottleneck is still the same one: how much of that value can actually move upstream, and on what timetable.

Current thesis: Alony Hetz trades below its economic value, but closing that gap now depends less on another revaluation and more on improving the quality and quantity of cash that the parent can pull from the holdings.

What has really changed is that CARR is no longer an equity-accounted exposure that can be read through one line. It has become a controlled platform, with debt, financing, and a weaker near-term operating base. That increases both the upside and the burden of proof.

The strongest counter-thesis is that the market may be right to keep a persistent discount, because a large part of the value still sits in foreign and development-heavy assets, while the parent remains dependent on refinancing, upstream dividends, and gradual monetization.

What could change the market's reading in the short to medium term? A combination of three things: clear progress at ToHa II, evidence that CARR can stabilize after the asset rotation and change in control, and proof that Brockton and Energix are starting to contribute more cash rather than mostly NAV.

Why does that matter? Because in a holdco, not all value is equally reachable. The investor who understands the difference between value created and value accessible has the right lens on the stock.

Over the next 2 to 4 quarters, the thesis strengthens if Amot keeps moving toward ToHa II delivery, CARR stabilizes NOI and FFO, Brockton advances pre-leasing and financing, and Energix starts converting capacity growth into more accessible cash. It weakens if the investment pace stays high, dividends remain less cash-heavy than the headline suggests, or if CARR and FX volatility consume too much of the value being created.