Menivim REIT 2025: The Core Holds, but 2026 Depends on Lavanda, Shaniv and the Funding Test

Getting to Know the Company

Menivim finishes 2025 as a REIT with a strong base, but not a clean story. What is working now is the core: NOI of NIS 237.3 million, real FFO of NIS 173.1 million, average occupancy of 97.2%, lease duration of about 4 years, and a fully unencumbered portfolio. On the surface, this looks like another calm growth year for an income-producing real-estate vehicle.

That is only part of the read. The core is stable, but the growth in this report is not mainly organic. Same Property NOI rose only 2.7% to NIS 210.0 million, while total NOI rose 8.8%. In other words, most of the movement came from larger ownership stakes, new assets and a broader asset base, not from a sharp acceleration in the economics of the existing portfolio.

The active bottleneck heading into 2026 is also not legacy debt or immediate liquidity. Quite the opposite. Net debt to investment property fell to 44.2%, weighted debt cost stayed low, and all assets remain unencumbered. The bottleneck is execution: leasing and delivering Lavanda, closing Shaniv, and turning a larger acquisition wave into real NOI and FFO for shareholders without leaning too heavily on the bond market.

Another point that is easy to miss is that Menivim is rightly seen as a strong industrial and logistics landlord, but offices still sit at the center of the economics. Offices are 42.6% of fair value and 42.3% of NOI, almost the same weight as industrial and logistics. The next big upside asset, Lavanda in Tel Aviv, is also a pure office execution test, not a logistics one.

The quick screen is therefore simple: the existing business works, the current rent roll is stable, only about 15% of revenue is up for renewal in 2026, and current short interest is very low. But the next leg of growth already depends on assets that still need to close, be delivered or be filled. That is why 2026 looks less like a harvest year and more like a bridge year with a proof burden.

Four points matter most right now:

• Same Property NOI rose only 2.7%, so the headline NOI growth overstates the speed of organic improvement.
• Net profit jumped to NIS 212.3 million, but real FFO rose only 5.4%, helped in part by NIS 82.3 million of net fair-value gains.
• Despite the industrial and logistics branding, offices still make up about 42% of NOI and value, and Lavanda is not included in 2026 guidance.
• The balance sheet is comfortable, but the all-in cash picture still shows that expansion, dividends and repayments leaned on debt issuance and NIS 152.1 million of option-exercise cash.

Menivim's quick economic map looks like this:

Events and Triggers

Menivim's annual report does not really stop at December 31, 2025. Much of what will shape the 2026 reading was already loaded into the story through post-balance-sheet events. That is not just extra filing noise. It is a real increase in execution burden.

What is already closed

During 2025 the company increased its ownership in two existing assets. At Centro in Rehovot, it bought an additional 25% for NIS 97 million, excluding about NIS 6.2 million of transaction costs, and moved to a 75% stake. The expected annual NOI from that additional piece was estimated at about NIS 6.4 million. At Migdal Armon in Haifa, it exercised the Call option in September 2025 and bought the remaining 25% for NIS 57.5 million, excluding about NIS 4.1 million of transaction costs, moving to 100% ownership. Annual NOI from the property after the full takeover was estimated at NIS 15.9 million.

After the balance-sheet date, two more deals were completed. In January 2026 Menivim bought 50% of the Electra City Tower parking asset in Tel Aviv for NIS 56.55 million, excluding about NIS 4.2 million of transaction costs. This matters less because of current NOI alone, and more because it sits next to Lavanda and gives the office package a practical parking solution. In March 2026 the company also bought the remaining 50% in the Caesarea complex for NIS 73 million and full ownership of the Pardes Hanna plot for NIS 17 million, both before transaction costs and VAT.

The common thread is that all of these moves strengthen the company, but they also load more into 2026. These are not assets that simply fall into a quiet machine. Some require leasing, some require integration, and some require funding.

What is still open

Shaniv is the clearest example. At the start of February 2026 Menivim signed to acquire 51% of Shaniv Nadlan, which holds assets in Ofakim and Dalton totaling about 25 thousand square meters and around NIS 201 million of value. Equity consideration is about NIS 56.4 million, excluding roughly NIS 8.2 million of transaction costs. Part of the asset base will be leased back to the seller under 13 to 20 year NNN leases. The disclosed annual NOI is about NIS 11 million today and about NIS 13 million at full occupancy, but those numbers are for Shaniv Nadlan as a whole. On Menivim's share alone, before financing at the parent level and before overhead, that is only about NIS 5.6 million of current NOI and about NIS 6.6 million at full occupancy.

This is exactly where it is easy to get excited by a bigger balance sheet and miss shareholder economics. The deal adds real potential, but only part of that potential actually belongs to Menivim, and even that only arrives if the closing conditions are met, if integration works, and if the planned future investment of about NIS 100 million does not become another source of pressure on capital.

At the same time, funding lines remain open. In January 2026 the company expanded Series D by NIS 300 million par value at a 2.67% indexed effective rate and completed a partial early redemption of NIS 210 million par value from Series B. In March 2026 Midroog assigned an Aa3.il stable rating to a new Series E of up to NIS 400 million. That is both a confirmation signal and a reminder of dependence. It says the bond market is still open to Menivim, and it also says that part of the growth model still sits on the ability to keep refinancing cheaply.

Efficiency, Profitability and Competition

The right way to read 2025 is not through the profit line, but through the question of what really improved in the economics of the assets.

The core is stable, but organic growth is modest

Total NOI rose 8.8% to NIS 237.3 million, but Same Property NOI rose only 2.7% to NIS 210.0 million. In the fourth quarter the same gap remained: NOI rose 8.0% to NIS 61.6 million, while Same Property NOI rose only 2.1% to NIS 58.1 million. That means the existing business is working, but it is not accelerating. What expands the reported result is mainly the wider platform.

On pure quality, the numbers are good. Average industrial and logistics rent rose to NIS 54 per square meter per month from NIS 52, office rent rose to NIS 77 from NIS 76, and retail held at NIS 114. Occupancy stands at 99.4% in industrial and logistics, 94.1% in offices and 93.8% in retail. Together with a lease term of about 4 years, that creates a real layer of stability.

So the report is not telling a deterioration story. It is telling a different one: the core is quiet, and the next growth leg is already moving into assets that still need to be executed.

The report looks stronger than recurring earnings

Net profit rose to NIS 212.3 million from NIS 123.0 million. That is a strong jump, but it does not fully describe the year. Net fair-value gains reached NIS 82.3 million in 2025, versus NIS 19.0 million in 2024, while acquisition expenses fell to NIS 10.3 million from NIS 22.6 million. By contrast, real FFO rose only to NIS 173.1 million from NIS 164.3 million.

In the fourth quarter the gap is even sharper. Net profit was NIS 102.9 million, while real FFO was NIS 45.4 million after NIS 46.9 million of net revaluation gains. Anyone reading only through net profit therefore gets a picture that is too strong relative to the improvement in recurring business.

That does not mean profit is fake. It means 2025 was stronger on accounting optics than on recurring cash-like earnings. For a REIT, that distinction matters.

Concentration did not disappear, but it was given time

Menivim's largest tenant, Technological Lehavim, generated NIS 51.7 million of revenue in 2025, about 20% of total company revenue. Beyond that, a related tenant generated another NIS 4.7 million. That is real concentration, not a footnote.

What matters more is that the company already moved to change how this risk will be read. The Nahariya site leased to Technological Lehavim was sold for NIS 155 million, versus a book value of about NIS 150 million at year-end 2025. But possession does not transfer immediately. Menivim remains entitled to the full contractual rent, about NIS 11.2 million per year, until the actual handover date, which can be delayed as far as June 2029. That turns what could have looked like a sharp vacancy event into a slower issue of timing, execution and counterparty behavior.

So the concentration did not disappear. It simply moved to another layer. That is better, but not the same as full removal.

The real competition sits in new office leasing

Management says directly that office demand remained limited through the fourth quarter and up to report date, especially in new projects and vacant office space. There is some improvement in Tel Aviv, mainly from technology firms needing several thousand square meters, but across most company locations demand is still concentrated in smaller and mid-sized areas.

At the same time, Menivim stresses that its office-tenant mix is broad, direct exposure to pure technology tenants is low, and about 27% of office space is leased to public and government bodies. So the right conclusion is not that offices are a structural weakness across the existing portfolio. The right conclusion is different: the existing office base is fairly stable, but the next big test, Lavanda, still needs an office market that is not easy yet.

Cash Flow, Debt and Capital Structure

At Menivim it is important to separate two legitimate cash bridges. Both are useful, but they are not the same thing.

The normalized cash-generation picture

On recurring cash generation, 2025 was a good year. Cash flow from operations rose to NIS 204.5 million from NIS 187.6 million, above real FFO of NIS 173.1 million. That is a healthy sign that the leased portfolio really produces cash.

The all-in cash-flexibility picture

Here the story is different. In 2025, NIS 188.4 million was used for investment, mainly to increase stakes in Centro and Migdal Armon and to fund fit-out and improvement work across existing assets. On top of that, the company paid about NIS 98.8 million in dividends, about NIS 79.3 million of scheduled bond repayments, and about NIS 40.1 million of interest. So even though operating cash was strong, 2025 was not a year in which growth and distributions were financed only by current operating cash.

Net financing cash flow was NIS 43.9 million, but that already nets several heavy sources and uses. On the source side, the main items were the April 2025 debt raise of about NIS 110.75 million gross and NIS 152.1 million of Series 4 option-exercise cash. On the use side, the company paid down debt, paid interest and paid dividends. That is a material point. Menivim is not fighting for liquidity, but it is also not funding the entire new growth stage from the existing portfolio alone.

Debt is not pressing today, and it is actually flexible

Gross debt stood at NIS 1.783 billion at year-end 2025, net debt at NIS 1.588 billion, and equity at NIS 1.997 billion. Net debt to investment property fell to 44.2% from 47.4% in 2024. Weighted debt cost was about 2.3% indexed at year-end, and about 2.42% at report date after the Series D expansion and the Series B partial redemption. Against a weighted portfolio yield of 7.13%, the spread remains comfortable.

The protection layer is also comfortable. All assets are unencumbered, the next major maturity is the Series B balloon at the end of 2027, and the company is in full compliance with the financial covenants of Series B, C and D. This is more than just an absence of pressure. It means Menivim still has real room to maneuver.

The more important conclusion, though, is that this room probably will not be left unused. Management explicitly says it aims to keep net leverage around 50% to 54%. That makes the current 44.2% look less like a final target and more like a bridge into further acquisitions, development and asset deepening.

At the parent level there is a working-capital deficit, but it does not look like a liquidity issue

In the parent-only statements there is a working-capital deficit of about NIS 4 million, while on a consolidated basis working capital is positive by about NIS 78 million. The company explains that the gap mainly reflects cash held in wholly owned subsidiaries, and that there is no restriction on upstreaming that cash. The board explicitly concluded that this does not indicate a liquidity problem and does not create a warning sign.

That is a quiet but important point. The question at Menivim is not whether cash exists. It is where it sits and how aggressively management chooses to use it.

Outlook

The right way into 2026 is through four tests, not one headline:

• whether the existing portfolio keeps producing positive Same Property NOI and occupancy stability,
• whether Lavanda moves from a future project into a genuinely leaseable office asset,
• whether Shaniv closes and shows that reported asset-level NOI actually reaches Menivim's shareholders,
• and whether the bond market stays open on similar terms even after the heavy early-2026 financing activity.

2026 looks like a bridge year with a proof burden

Management's 2026 base case is NOI of NIS 251 million to NIS 254 million, real FFO of NIS 175 million to NIS 177 million, and a minimum dividend of NIS 111 million. That is modest growth over 2025, not a breakout. Management itself is not telling a story of a major jump. It is telling a story of a stable base, provided the operating environment does not change materially.

That means what already works today will probably keep carrying results. What has not been proven yet is still not inside the base case.

What is not inside the base numbers

Lavanda is the clearest example. The asset is expected to be delivered in the third quarter of 2026, and the 2026 guidance excludes any contribution from it. At full occupancy, the company presents expected NOI of NIS 18.5 million to NIS 21.5 million and an FFO uplift of NIS 13 million to NIS 16 million. At the same time, the deal carries a purchase price of about NIS 300 million before transaction costs and before future fit-out spending, with office fit-out costs estimated at another NIS 30 million to NIS 35 million.

That sharpens the right read. Base guidance is relatively conservative, but the stock and the story will still be judged through what is excluded from that guidance. If Lavanda moves well on leasing, it can matter materially for 2027. If it stalls, 2026 guidance may still look reasonable, but the big upside option remains unproven.

The bridge from asset-level numbers to shareholder-level numbers

One of the easiest mistakes in this report is to confuse asset-level NOI with what actually belongs to Menivim's shareholders. This table is the bridge that matters:

This is the heart of the forward read. 2026 could still end up being a good year, but only if these moves stop being asset-level stories and start becoming visible recurring economics for Menivim itself.

What has to happen for the read to improve

The first trigger is Lavanda. Delivery alone is not enough. The company needs visible progress in marketing to anchor tenants and on terms that protect deal economics. The local files do not quantify whether meaningful commercial concessions will be needed, and that is a disclosure gap worth keeping in mind.

The second trigger is Shaniv. Menivim needs to close the transaction, pass the closing conditions, and show that the disclosed NIS 11 million to NIS 13 million NOI potential actually reaches its own share and is not absorbed by extra financing, minority interests or development burden.

The third trigger is the debt market. The rated Series E of up to NIS 400 million and the company's ability to refinance at low effective rates are strengths today. If those conditions hold, Menivim can keep expanding. If that window becomes meaningfully more expensive or narrower, 2026 will look less like a bridge and more like a weight test.

Risks

The big risk is not portfolio stability, but office execution

Menivim's existing offices show relative stability, but the report itself says office demand remains limited, especially in new projects. That makes Lavanda much more than just another asset. It is the test of whether the company can bring an expensive new office exposure into the next growth stage without giving away too much on price or stretching the lease-up period.

Revaluation helps, but it also creates sensitivity

Fair-value gains contributed NIS 82.3 million in 2025. At the same time, the company says a 0.25% increase in capitalization rates would reduce investment-property value by about NIS 126 million, while a 0.25% decrease would raise it by about NIS 136 million. In other words, 2025 benefited from accounting tailwinds as well, so anyone building a forward thesis needs to be careful not to treat net profit as a clean recurring base.

The bond market is a source of strength, but also part of the thesis

Today the company enjoys a comfortable mix of an Aa3.il stable rating, low debt cost and a fully unencumbered asset base. But as Menivim keeps layering in new deals, advancing Lavanda, paying dividends and operating toward a 50% to 54% leverage target, the bond market stops being only a tool. It becomes part of the thesis itself. That is not an immediate weakness, but it is clearly a yellow flag to watch.

Concentration still exists, even if Nahariya was softened

Exposure to Technological Lehavim remains high, and the parking deal, Lavanda and Shaniv will not cancel that concentration in the near term. The Nahariya transaction improved how that risk will play out, but it did not make the company immune to tenant concentration.

Some risks remain secondary, but not zero

At Hartuv, the company already completed the refurbishment, the building is fully leased to two tenants, and management says it does not expect additional exposure beyond the prior provision. That leaves the legal issue as background noise, not as a core thesis driver.

Short Interest Read

Short positioning is no longer telling a story of strong market opposition to the name. If anything, it shows that the skepticism that built into late 2025 has almost fully unwound.

In November 2025, short float rose above 3% and SIR climbed above 15 days. By March 27, 2026, short float had fallen to 0.15% and SIR to 0.7 days. That is a sharp reversal and it says the stock is not currently sitting inside a crowded short setup.

Still, that should not be overstated as a bullish sign. The last reported trading turnover in the stock was only about NIS 0.6 million, so the practical limitation here is more moderate liquidity than active short pressure.

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Conclusions

Menivim exits 2025 with a strong operating core, a comfortable balance sheet and relatively open access to debt markets. What supports the thesis right now is a very stable portfolio, high occupancy, fully unencumbered assets and 2026 guidance that does not depend on heroic assumptions. The main friction is that the next growth stage will no longer arrive almost automatically from the existing portfolio. It now requires real execution in Lavanda, Shaniv and financing.

The current thesis in one line: Menivim is still a stable-core story, but 2026 will decide whether the latest expansion wave creates real shareholder FFO or only a larger asset base.

What changed versus the simpler historical read is that 2025 is no longer just another year of steady REIT growth. It is the year when the gap between modest organic growth, strong accounting earnings and a heavy transaction wave becomes much more visible.

The strongest counter-thesis is that the balance sheet is so strong, occupancy is so high and only 15% of revenue reopens in 2026, that even if Lavanda and Shaniv take longer, Menivim can still keep growing and keep paying dividends without a major disruption.

What could change the market reading over the short to medium term is visible leasing progress at Lavanda, a Shaniv closing, the final funding terms of Series E if it comes to market, and proof that NOI keeps improving without leaning mainly on revaluation gains again.

Why this matters is simple: the question at Menivim is no longer whether the company knows how to produce NOI from an existing portfolio. The question is whether it knows how to turn balance-sheet growth and development activity into real recurring economics for shareholders.

What must happen over the next 2 to 4 quarters for the thesis to strengthen is clear. Lavanda has to move from delivery into effective leasing, Shaniv has to close and start showing visible contribution, and the company has to keep access to debt capital without pushing leverage up too fast. What would weaken the thesis is a material delay in Lavanda leasing, an expensive or slow Shaniv closing, or a financing backdrop that reveals 2025 was easier than 2026 will allow.