Gav-Yam 2025: The lease-up map of ToHa2, Matam East 3, O2, and the next layer of NOI
The main article already identified lease-up as the active bottleneck. This follow-up shows where the risk is already closed and where it remains open: O2 Herzliya is largely locked in, but most of the next income layer still sits in ToHa2 and Matam East 3.
Where The Test Really Sits
The main article already marked the real bottleneck: not Gav-Yam's existing income-producing base, but the lease-up pace of the development pipeline. The current portfolio still looks stable. At the end of 2025 occupancy in the income-producing portfolio stood at about 97%, and during the year the company signed 192 lease agreements in existing assets for roughly 204 thousand square meters of above-ground area, generating about ILS 168 million of annual rent, with an average real rent increase of about 4.2%. So the question here is not whether the existing assets work. It is how quickly the new pipeline becomes signed rent.
That is exactly why the focus should sit on ToHa2, Matam East 3, and O2 Herzliya. These three projects account for roughly 203 thousand square meters out of 288 thousand square meters under construction, and about ILS 228 million out of ILS 293 million of representative annual rent in the development pipeline. In other words, most of the next NOI layer is already concentrated in just three names.
The sharper point is how the risk splits inside that trio. O2 is almost out of the debate because it is fully marketed. By contrast, out of about ILS 114 million of representative annual rent that is still not locked across the three projects, roughly ILS 88 million sits in ToHa2 and another ILS 26 million in Matam East 3. That makes Gav-Yam's lease-up map close to a one-project story, with one secondary project that still has to clear the next stage.
To keep one consistent numerical language throughout, the map below uses the pipeline figures as the company presents them. In ToHa2 the figures reflect Gav-Yam's share in the joint project with Amot. In Matam East 3 they reflect the consolidation view through Matam.
| Project | Completion | Above-ground marketing rate | Representative annual rent | Already locked annual rent | Open annual rent | Remaining cost as of December 31, 2025 |
|---|---|---|---|---|---|---|
| Gav-Yam O2 Herzliya | Q2 2026 | 100% | ILS 47 million | ILS 47 million | 0 | ILS 123 million |
| Matam East 3 | Q4 2026 | 15% | ILS 31 million | ILS 5 million | ILS 26 million | ILS 124 million |
| ToHa2 | Q4 2026 | 39% | ILS 150 million | ILS 62 million | ILS 88 million | ILS 663 million |
The 2026 Lease-Up Map
Gav-Yam O2 Herzliya
This is the project that has already cleared the leasing test. The company is building an additional tower with about 39 thousand square meters of above-ground area and another roughly 20 thousand square meters of parking, and the entire project has been leased to a leading global technology company. Expected annual rent is estimated at ILS 47 million, against project cost of about ILS 739 million, with completion expected in the second quarter of 2026.
The implication is straightforward: in O2 the main risk is no longer lease-up, but execution and handover. That makes it the most visible part of the next NOI layer. But it is still worth remembering that this certainty rests on a single anchor tenant. Lease-up risk is much lower, but diversification has not improved.
Matam East 3
This is the smaller project, but probably the least resolved relative to the delivery date. It is a building with roughly 30 thousand square meters of above-ground space and about 13 thousand square meters underground, with expected completion in the fourth quarter of 2026. Project cost is estimated at ILS 350 million, expected annual rent at ILS 31 million, and the implied yield at 8.9%.
That is exactly why the low marketing rate stands out. At the end of 2025 only about 15% of the above-ground area had been marketed, and in annual rent terms the company had locked only about ILS 5 million out of ILS 31 million. This is a project with attractive asset economics but still-low commercial certainty. The gap looks even clearer because Matam Park itself still looks strong: average above-ground occupancy in the park stood at 99% in 2025, and average rent rose to ILS 76 per square meter per month. So if Matam East 3 is still at 15%, the issue is not weakness in the existing park. It is the conversion pace of a new building into signed rent.
ToHa2
This is where the main story sits. ToHa2 is no longer just another project in the pipeline. It is the large pool from which the step-up of 2027 and 2028 is supposed to come. The project will include roughly 205 thousand square meters, of which about 160 thousand square meters are above-ground marketable area and about 45 thousand square meters are parking, and it is held equally with Amot. Gav-Yam's share of total investment is estimated at ILS 1.7 billion, of which about ILS 663 million was still left to invest at the end of 2025. Expected annual rent attributable to Gav-Yam is estimated at ILS 150 million.
But against that large number, the above-ground marketing rate stood at only 39%. In annual rent terms, about ILS 62 million had already been locked and about ILS 88 million was still open. That alone represents roughly three quarters of all open annual rent across the 2026 delivery projects.
There is also a subtler point here. In the 2025 valuation, the company assumed that half of the vacant space would be leased at fitted-out level, versus the 2024 presentation that was based on shell level. So in ToHa2 it is not enough to track the marketing percentage. The market also has to track contract quality, fit-out level, and effective rent per square meter. In a project of this size, leasing mix changes not only the timing of occupancy, but the quality of the next NOI layer.
The Layer After 2026
If you stop at O2, Matam East 3, and ToHa2, it is easy to assume that everything beyond them is already arranged for the following years. That would be a mistake. The 2027 layer already exists on paper, but it is not yet locked. The data center at Matam Park, the third building at the Hebrew campus park, and Meshkit 3 together represent about ILS 51 million of representative annual rent potential. By the end of 2025 only about ILS 12 million of that had been locked, and roughly ILS 11 million of that amount sat in the data center alone.
That means the layer after 2026 splits into two very different levels of certainty. The Matam data center already looks relatively closed, with 100% marketing and expected completion in the third quarter of 2027. By contrast, Hebrew 3 was only about 4% marketed, and Meshkit 3 was still approaching launch. So anyone building a 2027-2028 bridge today has to separate signed-looking pipeline from pipeline that still sits mostly at early marketing stage.
The link to the company's forecast is clear. In the presentation it shows normalized NOI attributable to shareholders of ILS 632 million in 2025, guidance of ILS 690-710 million in 2026, ILS 840-860 million in 2027, and ILS 940-960 million in 2028. The bridge from 2025 to 2028 will not come from another small lift in Same Property NOI. It will be built, or stalled, by the pace at which the development pipeline moves from construction area to signed rent and then to actual occupancy.
What Needs To Be Measured Next
The first checkpoint is O2. Not to learn whether there will be a tenant, but to verify that handover in the second quarter of 2026 actually happens on time and that the first layer of income opens without delay.
The second checkpoint is Matam East 3. Here the target is not only construction progress, but a move in the marketing rate from the low end-2025 level to something that starts turning the expected annual rent into a more tangible number.
The third, and most important, checkpoint is ToHa2. There the market needs to see not just more signatures, but signatures that prove pricing, fit-out level, and tenant quality consistent with the economic scale that Gav-Yam attributes to the project.
The fourth checkpoint sits one step further out: whether Gav-Yam can also bring Hebrew 3 and Meshkit 3 to a level of marketing that prevents a gap between the 2026 deliveries and the 2027 layer.
Conclusion
This follow-up sharpens the real question. The issue is not whether Gav-Yam has a pipeline. It does. The issue is how that pipeline is split between rent that is already locked and rent that still needs proof.
O2 Herzliya already looks like near-signed NOI waiting for handover. Matam East 3 looks like a project with good economics, but too little marketing relative to the timetable. ToHa2 is the heart of the story: the biggest income reservoir, the biggest risk reservoir, and the place where lease quality matters almost as much as lease pace.
If the lease-up map of Gav-Yam needs to be reduced to one sentence, it is this: the next NOI layer does not depend mainly on the delivery of O2, but mainly on the ability of ToHa2, and secondarily Matam East 3, to turn built space into signed rent quickly.
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