Paz: How Much of the Real-Estate Value Can Actually Reach Shareholders
Paz shows a real-estate layer worth about NIS 3.2 billion, but most of it sits in self-use assets, value that is not booked on the balance sheet, and redevelopment processes that have not yet become cash. The layer with a hard disclosed monetization path is far narrower than the headline.
What This Follow-Up Is Isolating
The main article already established that Paz’s key gap sits between value created and value actually accessible. This continuation narrows the lens to the real-estate layer alone: how much of the roughly NIS 3.2 billion headline is really a value pool that can move toward shareholders, and how much of it is still an operating asset, an unbooked revaluation, or a planning option that remains far from cash.
That is the important question precisely because the big number is real. The investor presentation points to roughly NIS 3.2 billion of fair value for the land portfolio, and the annual report breaks that into a precise NIS 3.151 billion as of December 31, 2025. The mistake is not in the number. The mistake is to treat all of it as if it sat in the same layer of monetization, distributability, and comparability to cash.
NIS 3.151 Billion, But Not One Uniform Layer
The core table in the annual report breaks Paz’s property value into two very different buckets. Only NIS 687 million sits in investment property. The remaining NIS 2.464 billion sits in fixed assets: NIS 1.813 billion in self-use stations, NIS 322 million in other self-use assets inside the real-estate segment, and another NIS 329 million in other assets used by the group, including subsidiaries. In other words, roughly 78% of Paz’s property value sits inside assets that support operations, not in stand-alone yielding property outside the core business.
| Layer | Fair value | Book value | What that means for accessibility |
|---|---|---|---|
| Self-use stations | NIS 1.813 billion | NIS 1.030 billion | This is an operating base for the network, not an immediate cash layer |
| Other self-use and group-use assets | NIS 651 million | NIS 288 million | Real value, but still embedded in ongoing use by the company and its subsidiaries |
| Investment property | NIS 687 million | NIS 687 million | This is the layer that sits closer to an outside market and to cash, but it is still not cash in the bank |
| Total | NIS 3.151 billion | NIS 2.005 billion | A NIS 1.146 billion fair-value surplus, most of it outside the balance sheet |
There is another less obvious layer here, and it may be the most important one. The report explicitly says the fixed-asset valuations were performed as of December 31, 2021, while the investment-property valuations were updated as of December 31, 2025. So the NIS 3.151 billion headline combines 2025-marked investment property with a large operating layer whose value still rests on an older appraisal date. That does not erase the value, but it does mean the headline is not a single clean year-end market price for the whole portfolio.
Paz also states clearly that it does not record the revaluation of fixed assets in the books. So the NIS 1.146 billion fair-value surplus remains outside the balance sheet. This is exactly where the gap between real-estate value and accessible value begins: a large part of the economics exists, but it has not yet passed through realization, and it has not yet passed through the balance sheet either.
Most of the NOI Does Not Come From Outside Tenants
The NOI layer tells the same story. The report and the presentation show NIS 211 million of NOI from real estate, but the split matters more than the headline: NIS 151 million comes from self-use assets, while only NIS 60 million comes from third parties. The presentation also points to 96% occupancy, so the yielding-property layer itself appears stable and of good quality. This is not a quality problem. It is mainly a size and accessibility problem.
| Component | 2025 | What it really is |
|---|---|---|
| NOI from self-use assets | NIS 151 million | Imputed income based on Paz’s own use of its stations and other assets |
| NOI from third parties | NIS 60 million | The outside rental layer |
| Occupancy | 96% | An indication that the yielding-property portfolio itself is not under unusual pressure |
The implication is simple: a large part of Paz’s real-estate NOI is not outside rent checks coming in from the market, but intersegment income derived from Paz using its own stations and assets. The report says the value of self-use stations is determined based on business value or market rent, which means it is tied to station profitability. Earlier in the same section it adds that the appraisers cannot currently quantify the scope, intensity, or timing of changing trends in the traditional fuel market, so their base assumption is that station profitability will not decline in the visible horizon.
That is the difference between real estate that sits next to the business and real estate that is part of the business. At Paz, most of the value layer still depends on the stations continuing to be economically strong. So the big number matters a lot for understanding quality and resilience, but it is not the same thing as a cash layer that can simply be detached from operations and lifted upward.
Where There Is Already A Hard Cash Path
To understand what can really reach shareholders, it helps to leave fair value aside for a moment and focus on the monetization steps that have already been disclosed with hard numbers.
| Asset or process | Status at year-end 2025 | Hard number | What it says about accessibility |
|---|---|---|---|
| Raem Junction and Be’er Sheva | Completed on February 10, 2025 | NIS 75 million of proceeds received, and roughly NIS 41 million of net profit | This is already cash inside the company, and the report says there were no loans tied to these assets that had to be repaid from the proceeds |
| Ashdod | Not yet completed | NIS 52 million, subject to an additional condition precedent within 18 months from October 31, 2024 | Even a signed deal is not accessible cash until it closes |
| Paz Baka’a | Part of the excess rights was sold and the sale closed in September 2025 | About NIS 10 million of capital gain in the third quarter | Redevelopment value can become realized value, but in stages and only partially |
| 104-dunam Haifa Bay site | Sale process launched, data room opened, non-binding offers submitted | No financial impact estimate yet | Probably one of the more important value pools, but still farther from cash and dependent on real operating changes |
The presentation adds an important layer on the Haifa Bay site: roughly 64 dunams are for development, about 40 dunams are yielding, and the site carries rights for around 250 thousand square meters of logistics and storage. But the annual report also explains why the path to cash is still long. As part of the sale process, Paz Shemen is working to shrink its plant footprint to about 40 dunams, and the company is looking for alternatives to the northern dispensing facility so that the current dispensing operation on the land can eventually be shut down. In other words, this is not an asset that only needs a buyer. It also needs operating relocation.
Even at the broader pipeline level the picture stays cautious. By the reporting date the company was advancing planning-status and zoning changes at about 20 sites, but only eight assets had been placed on the company’s website as invitations for offers, and the report adds that most of them were still at an early planning stage. Even where offers had already been submitted, none had matured into an actual negotiation. There is a redevelopment pipeline here, but it is still not the same thing as cash on hand.
This chart is not saying that only NIS 75 million or NIS 127 million matters. It is making a different point: the layer that already has a price tag, a contract, and a timetable looks nothing like the NIS 3.151 billion headline. Haifa is left outside this chart because the company itself says it cannot yet estimate the possible financial effect of a future sale there.
So How Much Of The Value Can Actually Reach Shareholders
The clean answer is that the big number is real, but the layer that sits close to shareholders is much narrower. NIS 2.464 billion of the value sits in assets used by the station network, by the real-estate segment itself, and by subsidiaries. The NIS 1.146 billion fair-value surplus is not booked in the balance sheet. The NOI that demonstrates the strength of the real-estate layer depends mostly on self-use. And the most interesting value pools, especially Haifa Bay and other redevelopment sites, still sit inside planning processes, operating alternatives, and non-binding negotiations.
What is closer? First, the NIS 75 million already received from the Raem and Be’er Sheva sale. Second, the NIS 52 million Ashdod transaction, if it closes. Then the investment-property layer, which produces NIS 60 million of third-party NOI at 96% occupancy and is therefore the layer that sits closer to a genuine outside market. But even here the caution matters: this is first a cash layer for the company, not for shareholders. To move upward, Paz still has to realize it, clear conditions, go through tax and capital-allocation decisions, and in some cases vacate or replace existing uses.
That is why the practical conclusion is simpler than the headline. The layer with a hard price tag and a clear cash path disclosed in the report currently stands at NIS 127 million of signed transactions, of which NIS 75 million has already been received and NIS 52 million is still conditional. Everything else is not imaginary, but it is still not accessible cash. It is a mix of operating real estate, unbooked value, and redevelopment rights that still have to pass through planning, execution, and realization.
In other words, Paz’s real-estate layer matters enormously for understanding the company’s quality, resilience, and optionality. But anyone translating the NIS 3.2 billion headline directly into value that can already reach shareholders is skipping the critical step in between. At Paz, most of that value currently works first as a strategic cushion and an option pool, and only after that as money that can actually flow upward.
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