Medipower 2025: The legacy portfolio is stable, but 2026 will be decided by financing and integration

Getting To Know The Company

At first glance, Medipower looks like a fairly standard income-producing real estate story: a portfolio of open-air shopping centers in the US, anchored by supermarkets, a steadily rising NOI line, and local operating management through AM West. But that is only the surface layer. The company is no longer being judged only on the quality of the legacy portfolio. It is now being judged on whether it can finance, close, and integrate a much larger growth layer.

What is working today? The existing portfolio is still holding up. Rental income rose to $41.1 million in 2025 from $39.2 million in 2024, consolidated NOI rose to $27.4 million from $26.3 million, equity attributable to shareholders rose to $146.4 million, and year-end US occupancy improved to 95% from 94% a year earlier. On top of that, both bond series still show comfortable covenant headroom.

But the easy read is too clean. Same-property NOI barely moved, AFFO attributable to shareholders rose only to $11.9 million from $11.8 million, and reported net profit was heavily helped by fair-value gains. At the same time, the jump in cash to $73.1 million came mainly from bonds and loans, not from internal cash generation strong enough to fund the next growth step on its own.

That matters now because Medipower in 2026 is moving from an optimization story on an existing portfolio to a story about integration, financing, and value-sharing. After the balance-sheet date, it completed 6 out of 16 assets in the first portfolio, signed a second 7-asset acquisition, and brought Phoenix in as a 49% partner across almost the entire new expansion layer. That solves part of the equity problem, but it also sends part of the new economics elsewhere before public shareholders see them.

The active bottleneck today is not asset quality. The bottleneck is turning asset growth into growth that is actually accessible to shareholders. The legacy portfolio is buying time, but 2026 is a proof year, not an automatic harvest year.

There is also an actionability screen that matters. On April 3, 2026, the share traded on turnover of only NIS 3,185, and short-interest data is immaterial. So the near-term market read will not come through clean daily price discovery. It will come more through the bond market, through the pace of closings, and through the quality of the next few quarterly reports.

The Economic Map

Clear Advantages And Clear Risks

Events And Triggers

The key trigger for Medipower is no longer what happens in one asset. It is whether the company can scale the portfolio without letting a large share of the new value leak to partners while public shareholders keep most of the complexity. That is the line 2025 and early 2026 pushed the company onto.

The legacy portfolio is still holding up, but it is no longer the main story

In May 2025, the company completed the acquisition of Springfield Avenue Marketplace in New Jersey for $37.5 million plus $635 thousand of transaction costs. This is exactly the kind of deal Medipower understands well: 6 buildings, supermarket-anchored, 99% occupied, 16 tenants, and representative NOI of about $2.6 million a year.

But the 2026 story has already moved well beyond that. Springfield is a single asset. The 16-asset portfolio and the 7-asset deal are a change in pace.

The 16-asset portfolio changes the scale, but not for free

In September 2025, Medipower signed an agreement to acquire 16 open-air, supermarket-anchored shopping centers in Pennsylvania and Maryland, with about 135 thousand sqm of leasable area and total consideration of about $276 million. Based on the disclosed numbers, the portfolio carries representative NOI of about $19.9 million, average lease term of about 5 years, and occupancy of about 96%.

By the report date, 6 out of the 16 assets had already closed, and the annual report says that after this completion the company was already at 24 assets and about 243 thousand sqm of leasable area. So part of the future story had already turned into operating reality by the time the report was signed.

But the footnotes matter. The company had already posted an $8.371 million acquisition deposit and related deferred deal costs by year-end, while the remaining 10 assets were still not guaranteed to close. On top of that, the transaction is financed with roughly 65% debt, and the equity layer brings Phoenix into the structure.

Phoenix solves part of the equity problem, but it also takes economics and optionality

On January 11, 2026, the Phoenix agreement package was signed. For the 16-asset portfolio, Medipower keeps 100% of the general-partner rights and 51% of the limited-partner rights, while Phoenix holds 49% of the limited-partner rights and contributes about $55 million, which is 49% of the required equity.

This is strategically important. It lets Medipower stay active in larger acquisitions without bringing all the equity itself. In growth terms, that is the difference between a company that can add one more property and a company that can build a wider platform.

But Phoenix is not just a financing source. Starting January 1, 2032, or in a change-of-control event, Phoenix can force a sale process for the portfolio. The general partner has a buyout right, but if it does not exercise it, the portfolio goes to market. In addition, Phoenix received unlisted options equal to 3% of the company’s share capital, with rights to up to another 2% through future option grants tied to further investments.

So Phoenix does not only fund the next layer. It also receives an economic share, an option layer, and a structural say over the eventual exit path.

The 7-asset deal looks cleaner, but it adds another execution layer

On February 26, 2026, Medipower signed an agreement to acquire 7 more open-air shopping centers in Georgia, Virginia, South Carolina, and New Jersey for $115 million. On paper, the profile looks even cleaner: about 52 thousand sqm of leasable area, full occupancy in the immediate report, about 80 tenants, representative NOI of about $7.5 million, and expected financing cost of about 5.17% on average.

This fits the existing playbook well. But in practice it adds a second major execution track on top of the first portfolio. The question is therefore not whether each deal looks reasonable on its own. The real question is whether Medipower can absorb both in the same year without stretching financing, management bandwidth, and oversight.

Efficiency, Profitability, And Competition

The 2025 numbers look strong on first read. Rental income rose to $41.1 million, net rental profit rose to $27.4 million, and net income rose to $16.3 million. But to understand the quality of the year, it is necessary to separate legacy performance, fair-value gains, and the economics that actually reach shareholders.

The core barely grew

The most important number here is not total NOI. It is same-property NOI. On a consolidated basis, same-property NOI was $24.91 million in 2025 versus $24.88 million in 2024. On the company-share basis, it actually slipped slightly to $22.267 million from $22.309 million. The legacy portfolio did not weaken, but it also did not provide real growth in 2025.

That helps explain why acquisitions suddenly carry so much of the thesis. If the core had been growing strongly, the transactions would be an accelerator. With the core roughly flat, they become the story.

Occupancy improved by year-end, but 2025 as a whole was not that clean

In the US portfolio, average occupancy in 2025 declined to 91.4% from 93.6% in 2024, but year-end occupancy improved to 95% from 94%. That tells a more nuanced story. The portfolio moved through vacancy and tenant replacement during the year, then ended it in better shape.

The company also shows stronger economics in new leases and renewals, while several key assets benefited from better occupancy or better tenant mix. That supports the idea that the legacy portfolio still works. It just did not translate into a meaningful same-property NOI step-up.

Net profit rose much faster than recurring earning power

Profit from ordinary operations rose to $37.5 million, but $12.5 million of that came from fair-value gains on investment property and related remeasurement, plus another $262 thousand of other income. At the same time, net finance expense reached $15.1 million, including $4.0 million of FX-related expense.

That is why 2025 should not be read mainly through net income. Reported profit moved much faster than recurring business strength.

AFFO attributable to shareholders, which is a cleaner read on recurring economics after stripping out revaluations and selected adjustments, was $11.946 million versus $11.781 million in 2024. In other words, almost flat.

The industry niche is relatively defensive, but pricing still matters

The company clearly positions itself in a defensive retail niche: neighborhood open-air centers, grocery anchors, and tenants such as food chains, service providers, clinics, gyms, and discount stores. It explicitly argues that open-air centers have benefited from post-Covid shopping patterns and consumer preference shifts.

That is a reasonable lens, but it does not remove two basic economic tests. The first is leasing power, how much rent and occupancy can really move from here without quality slippage. The second is acquisition pricing, whether new properties are being bought at economics that still make sense after the cost of debt and the dilution of the equity layer.

Cash Flow, Debt, And Capital Structure

The right way to read 2025 is through an all-in cash flexibility bridge, not through operating cash flow alone. Medipower generated $16.4 million from operations, but it used $50.5 million for investing activity. Cash only rose to $73.1 million because financing activity contributed $101.6 million.

Put differently, 2025 was a year of funding the next acquisition phase, not a year in which internal operating generation funded the whole step-up.

The cash balance looks strong, but part of the money is already spoken for

Year-end cash and cash equivalents stood at $73.1 million. That is a strong number. But the company also had $9.593 million of long-term designated and restricted deposits and other receivables, of which $8.371 million was an acquisition deposit tied to the 16-asset portfolio. So part of the apparent liquidity had already been assigned to the next step.

There is another layer here. In the solo report, the board explicitly says the parent company has ongoing negative operating cash flow because it is a holding company. That does not mean there is an immediate liquidity problem. It does mean that the public parent depends on upstream dividends and loan repayments from subsidiaries. This is exactly why consolidated cash is not the same thing as cash that is freely accessible at the top.

Leverage is still manageable, and the covenants are not flashing red

Bank debt and other credit rose to $255.0 million from $230.0 million a year earlier. The book value of the bond stack rose to $96.6 million after the issuance of Series G. Average interest on the bank debt was 4.0%, while Series G carries a stated coupon of 5.36%.

Even with higher leverage, covenant headroom still looks comfortable. In Series B, net debt to net CAP stood at 60% versus a 75% ceiling, and net debt to NOI stood at 10.2 versus a 17 ceiling. In Series G, net debt to net CAP also stood at 60%, while NOI was $28.3 million against a $15 million floor. The step-up triggers that would increase bond pricing are still well away.

So the problem today is not covenant proximity. The problem is what happens if the new acquisition layer closes slowly, needs more equity, or creates a larger gap between consolidated NOI and the economics that actually reach shareholders.

Value at the asset level is not automatically value accessible to shareholders

This is one of the most important points in Medipower. Some US assets are held at 80%, and in some cases local partners can receive a profit share above their equity share once return thresholds are met. On top of that, most of the group’s assets are pledged to the financing banks, and in some cases that limits the ability of the subsidiaries to distribute dividends or repay loans to the parent until the relevant debt is repaid.

So when reading NOI, FFO, or property value, the right question is always: how much of this can actually move upstream. In this report, the answer is that a meaningful portion stays below the public-shareholder layer, and 2026 may widen that gap further through Phoenix.

Outlook

Finding one: 2026 will not be decided by the legacy portfolio. It will be decided by closing and integrating the new transactions.

Finding two: Better net profit is no longer enough. What now needs to rise is AFFO attributable to shareholders, not just consolidated NOI.

Finding three: The Phoenix partnership solved part of the equity problem, but made the value-sharing question far more important.

Finding four: This is a year of operational and financing proof, not a free year of re-rating through fair-value gains.

What must happen over the next 2 to 4 quarters

The first requirement is completion of the remaining 10 assets in the first portfolio, or at least a clearly credible closing path. As long as only 6 out of 16 have closed, part of the thesis remains acquisition pipeline rather than proven economics.

The second requirement is closing the 7-asset deal on the financing terms that were disclosed. The transaction itself appears to fit the portfolio well, but 2026 becomes crowded if both deals move in parallel. So the market will not watch only whether the assets close. It will watch funding cost, equity needs, and whether AM West can keep operating control without over-layering the structure.

The third requirement is proof that the legacy portfolio does not slip during the transition. If the 95% year-end occupancy in the US was only a year-end peak and management attention shifts almost entirely to acquisitions, the company could find itself neither extracting enough from the old portfolio nor integrating the new one fast enough. That is the scenario the market would punish.

What the market could miss on a first read

On a quick reading, 2025 may look like the year in which Medipower solved three things at once: raised cash, enlarged the portfolio, and sharply improved earnings. That is incomplete. Part of the earnings improvement came from revaluations, part of the cash improvement came from financing, and a large part of the asset growth has not yet translated into a full year of contribution.

The more important point is that the company has changed its risk profile. It used to be mostly a portfolio owner with funding and FX exposure. It is now also an acquisition-and-integration platform. If execution works, 2026 and 2027 will look larger. If it does not, shareholders will quickly see that the jump in assets did not turn into a matching jump in accessible economics.

What kind of year 2026 looks like

For now, 2026 looks like a proof year. Not a clean breakout year, because too much still depends on closings, financing, and integration. Not a reset year either, because the legacy portfolio is still stable and covenant pressure is not acute. This is a year in which Medipower has to prove that the move from a medium-sized portfolio owner to a broader acquisition platform creates accessible value, not only reported value.

Where the upside surprise could come from

If the company completes the rest of the 16-asset portfolio on time, closes the 7-asset deal, and keeps occupancy and rent collection stable in the legacy portfolio, then 2026 will carry a much larger NOI base than 2025 suggests. Beyond that, if Giant does become a major tenant after the first portfolio is fully completed, the company’s profile as a larger grocery-anchored open-air platform will strengthen.

But that also cuts both ways. A stronger anchor tenant is both a quality signal and a concentration point. If Giant reaches about 23% of revenue after the portfolio closes, that improves anchor quality, but it also makes the story more sensitive to one tenant relationship.

Risks

FX, cap rates, and revaluation sensitivity

The biggest accounting and economic risk remains FX. In 2025 the company recorded net FX expense of $4.042 million. Its own sensitivity analysis shows that a 10% move in the shekel would have reduced profit or loss by $8.794 million. This is not a theoretical issue, because the public debt layer is shekel-denominated while the assets and NOI are dollar-based.

Cap-rate sensitivity also matters. A 0.5% increase in the capitalization rate would reduce the fair value of investment property by about $30.3 million, and a 10% decline in NOI would reduce fair value by about $40.5 million. So part of the comfort created by a $548.6 million asset base still depends on a valuation environment that may not stay this supportive.

Partners, minorities, and trapped value

The more subtle risk is created value that is not fully accessible. Local partners in several assets, non-controlling interests of $21.2 million, limits on subsidiary distributions, and Phoenix in the new growth layer all create a structure in which public shareholders will not receive every new dollar with the same force as consolidated NOI implies.

That is not a technicality. It is part of how the business is built. But anyone who skips that bridge can easily overstate the economic benefit of the new acquisitions.

Execution and concentration

Three tenants that are sister companies already accounted for about 16% of 2025 group revenue. After the 16-asset portfolio is fully completed, Giant is expected to become a major tenant. On top of that, both new portfolios are built around the same thematic bet: open-air, supermarket-anchored centers. That is positive while the thesis holds, but it also increases concentration in one direction.

There is also a practical market-risk layer. The stock itself is very illiquid, and short interest is negligible. That means even strong or weak execution may show up first in the bonds rather than in a clean equity-market signal.

Conclusion

Medipower enters 2026 from a reasonable position. The legacy portfolio is still stable, covenant headroom is comfortable, and the company has opened a meaningful expansion path through Phoenix and the debt market. But this is no longer just another NOI year. The real issue is whether the new acquisition layer turns into NOI, AFFO, and value that is actually accessible to shareholders, or whether it remains mostly an enlarged and more leveraged asset base with more partners around it.

What supports the thesis today is the operating base of the legacy portfolio, the financing framework now in place, and the disclosed quality of the assets being acquired. What blocks a cleaner thesis is that the new growth layer is not yet fully closed, not yet fully funded, and not yet fully owned by public shareholders.

Current thesis: Medipower has a legacy portfolio that buys time, but in 2026 the stock and bonds will be read through the pace of closing, financing, and integrating the new acquisition layer.

What changed: 2025 did not leave the company as a stable portfolio owner with some optional growth. It turned Medipower into a more leveraged acquisition platform, with Phoenix, minorities, and options now shaping how much upside actually reaches shareholders.

The strongest counter-thesis: The cautious framing may be missing the simple point, the legacy portfolio is stable, the new portfolios come with strong occupancy and disclosed representative NOI, and Phoenix sharply lowers the equity burden, so 2026 could look much stronger than a conservative framing implies.

What could change the market read in the short to medium term: further quick closings on the remaining 10 assets, the completion of the 7-asset deal on the disclosed terms, or a delay that reminds the market that growth still depends more on execution than on reported asset scale.

Why this matters: because Medipower is no longer judged only on the quality of the assets it owns. It is now judged on how it converts an acquisition pipeline into value that remains with shareholders after partners, minorities, debt, and FX.

What has to happen now: the company needs to complete the deals on time, show that shareholder-level NOI and AFFO actually move higher, and keep the legacy portfolio stable enough to fund the transition period. What would weaken the thesis is delayed closings, slippage in the legacy portfolio, or a rise in financing and FX costs that eats most of the new value.