Ari's Ashdod Asset: How Much Of The New Value Is Already In NOI And How Much Still Depends On Planning
Star Center Ashdod ended 2025 with ILS 59.2 million of NOI against a value of ILS 1.266 billion. This follow-up shows the gap is not one block: part of it is already close to NOI, but about ILS 68.5 million is an explicit planning premium tied to a plan that had not yet been deposited.
Ashdod After The Main Article
The main article made a straightforward argument: Ari is now being read less like a small yield vehicle and more like a development platform, so the important gap is the gap between reported value and actual NOI and cash. This follow-up isolates Ashdod because no other asset explains that gap as clearly.
The 2025 numbers show why the distinction matters. Star Center Ashdod ended the year with a fair value of ILS 1.270 billion and a book value of ILS 1.266 billion, but actual NOI slipped slightly to ILS 59.2 million from ILS 59.7 million in 2024, while average occupancy fell to 97% from 99%. In other words, nearly ILS 70 million of revaluation gain was added in a year when the operating engine itself did not deliver a matching step-up.
The mistake is to read that entire gap in one way. Not all of the ILS 1.266 billion is “paper value” in the same sense, but neither is all of it current NOI waiting to show up in the next report. At the end of 2025 Ashdod has three very different layers: a layer already tied to an operating asset and existing tenants, a layer of granted rights and existing permits that have not yet become income, and a layer of planning premium tied to a much broader mixed-use plan that had not yet been deposited.
Three Layers Inside The Value
The right way to read Ashdod is through the appraiser’s split, not only through the final headline number. The valuation reaches ILS 1.270 billion in three steps:
| Layer | Value | What Supports It | What Still Has To Happen Before It Becomes Income |
|---|---|---|---|
| Operating layer | ILS 1,124.8 million | Leased space, vacant space, leased Jumbo space, fuel station, electricity and management profit, rooftop rent | Lease-up, collection, and ongoing operations |
| Existing building-rights layer | ILS 79.5 million | Building 9000 under permit and other unused rights in the complex | Execution and conversion into built and leased area |
| Planning-premium layer | ILS 68.5 million | A 6% urban/planning premium | Deposit, approvals, and real progress on the broader plan |
That is the core of the whole exercise. In the company presentation the split is shown in simpler form: ILS 1.118 billion of investment property plus ILS 148 million of building rights. The valuation report lets us see that the ILS 148 million is not one homogeneous bucket. About ILS 79.5 million is tied to existing rights and permits, while about ILS 68.5 million is an added premium for broader urban and planning potential.
That leads directly to the real question. The issue is not whether Ashdod is worth ILS 1.266 billion or not. The more useful question is which part of that value is already close to income and which part is still sitting with the planning authorities.
What Is Already Sitting In NOI
The most conservative reading starts here: reported 2025 NOI is ILS 59.2 million, and that is the only number that has fully gone through the P&L. Against the full ILS 1.270 billion value, the actual yield dropped to 4.66%. That looks low for an open-air commercial center with 97% occupancy, and the reason is simple: the denominator already carries value layers that are not yet running fully through NOI.
But stopping at ILS 59.2 million also misses part of the picture. The December 31, 2025 valuation is not built only on the accounting NOI of the year. It uses representative NOI of ILS 66.2 million from leased space, another ILS 1.0 million from representative turnover-based NOI, and another ILS 1.2 million from vacant space. That means that already at the valuation date, representative income was about ILS 68.3 million, roughly ILS 9.1 million above the NOI recorded for 2025.
The presentation takes that one step further. As of the report publication date, the company already shows representative NOI of about ILS 73 million at Star Center, and explains that the gap versus 2025 actual NOI reflects, among other things, the opening of the Ashdod Jumbo building, 10.5 thousand sqm fully leased to a single tenant, as well as material rent concessions granted to tenants during the construction period.
That means part of the gap between ILS 59.2 million and the new value does not sit in a distant planning dream. It sits in completed space, signed leases, and income that did not flow fully through 2025 because of timing and lease-up. Put differently, there is a real near-term NOI layer here, not only theoretical value.
The number that sharpens this most is actually the internal contradiction in the operating data. Leased area rose to 44,693 sqm from 43,553 sqm a year earlier, yet NOI slipped slightly and average occupancy eased. That does not look like an asset whose economics have materially weakened. It looks like an asset whose physical expansion and construction completion temporarily moved ahead of what the P&L could yet show.
That chart does not say the value is inflated. It says the improvement in Ashdod has been running ahead of the reported operating line. So the market should measure the asset not only by the size of the gap, but by the speed at which the gap closes.
What Still Depends On Planning
This is the less comfortable part of the read, and it is exactly what makes Ashdod more complicated than a standard stabilized retail asset. Out of the ILS 148 million building-rights component, about ILS 68.5 million is not value for already permitted execution. It is a 6% premium for urban and planning potential.
The basis for that premium is Plan 603-1168525, which seeks to convert the Star Center complex from an active commercial center into a mixed-use development with 2,000 housing units, retail, employment, and public-use area. According to both the annual report and the valuation report, the plan was discussed by the district committee on November 17, 2025, but the committee decided to return to it later. As of the valuation date, and in the valuation’s own wording, the plan had still not been deposited.
That distinction matters. Granted rights and existing permits are one thing. A premium for a plan that has not yet been deposited is another. So it is not correct to treat the entire ILS 148 million as equally “embedded.” Part of it is much closer to execution, while another part still has to pass a meaningful regulatory gate.
There is also an economic cost here that does not sit in NOI. Under the agreements tied to future rights promotion, the company committed to pay about ILS 1,000 per sqm of main area and ILS 500 per sqm of service area, in milestones linked to planning progress. By the report publication date, roughly ILS 45 million plus VAT had already been paid as advances. On top of that, the company is expected to bear the betterment levy and the fees and expenses associated with the new plan and the units approved under it.
The implication is simple. Even if the reader gives the planning premium some value, it cannot be read as hidden NOI available at no cost. It is a value layer that comes with timing risk, statutory risk, and real cash uses.
How Ashdod Should Be Read Now
Anyone reading Ashdod as a fully stabilized, ready commercial asset misses the fact that almost 12% of end-2025 value sits in rights, and that out of this, ILS 68.5 million, a little more than 5% of total asset value, sits in an explicit planning premium for a plan that had not yet been deposited. On the other side, anyone dismissing the whole gap between NOI and value as hot air misses that the valuation itself already moves from ILS 59.2 million to about ILS 68.3 million of representative NOI, and that the company presentation already moves that to about ILS 73 million with Jumbo open and lease-up progressing.
That leaves two separate tests for Ashdod:
- A near-term operating test: can actual NOI move from ILS 59.2 million toward the ILS 68 million to ILS 73 million range through full lease-up, the end of concessions, and full collection.
- A longer-dated planning test: can the 2,000-unit mixed-use plan move from district discussion into a deposited plan and then into approvals that deserve hard underwriting.
The good news is that not all of the gap depends on planning. The less comfortable news is that the new value does already include a clear planning component, so it makes no sense to ask 2025 NOI alone to justify the full ILS 1.266 billion, but it also makes no sense to ignore the fact that part of that value has not yet passed its statutory and cash tests.
Conclusion
Ashdod is not a case of “either NOI or fantasy.” It is a combination of three layers. The first is already active and backed by a strong commercial asset, signed leases, high occupancy, and a stable operating base. The second is much closer to execution because it rests on existing rights and on space whose completion has already narrowed the gap between actual NOI and representative NOI. The third is the most exciting layer narratively, but also the most fragile in certainty terms, because it still depends on planning, deposit, approvals, and money.
So the answer to the title question is fairly sharp: part of the new value is already in NOI, or at least within short distance of it. But about ILS 68.5 million of that value still rests explicitly on planning that had not yet been deposited, before betterment levy, expenses, and execution. Read Ashdod that way, and Ari itself becomes easier to read: not as one big value number, but as a stack of value layers with very different quality.
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