Rami Levy Real Estate: How Dependent Is the Portfolio on Rami Levy Shikma Marketing
The main article already showed that the income-producing portfolio carries the present. This continuation shows how much of that stability still rests on Rami Levy Shikma Marketing: the drop to 37% of consolidated revenue in 2025 looks like diversification, but rental income from the tenant actually rose and concentration remained embedded in the key assets.
The main article argued that rent supports the present while the development pipeline still has to prove the future. This continuation isolates the tenant inside that rent engine. The issue is not whether Rami Levy Shikma Marketing currently looks strong. It does. The issue is whether 2025 genuinely reduced the portfolio’s dependence on that tenant, or only made it look less severe on first read.
That is the right starting point: the percentage exposure fell, but the engine did not really diversify. On a consolidated basis, revenue from properties leased to Rami Levy Shikma Marketing rose to about NIS 44.7 million in 2025, from about NIS 41.3 million in 2024 and about NIS 42.9 million in 2023. Only the percentage of total company revenue fell, to 37% from 49%, mainly because residential revenue entered the income statement in 2025. The company itself adds in the footnote that if one looks only at income-producing real estate revenue, the 2025 share is 46%. In other words, the dependence weakened at the denominator level, not at the rent level.
The presentation sharpens the same point from a broader angle. Rami Levy Shikma Marketing is presented as the anchor tenant across 28 properties, 20 consolidated and 8 held through investees, with NIS 64 million of rent and management income on the company’s share basis and 129 thousand square meters leased. That is no longer a side exposure to one or two assets. It is a structural layer inside the portfolio.
This chart matters because it separates two different stories. One story says dependence fell. The more accurate story says income from the tenant remained high and even increased, while the consolidated report gained another revenue layer that is not rent. For a yielding real estate investor, the second story is the relevant one.
Why It Still Works For Now
The reason this exposure currently looks more like a moat than an immediate threat is the quality of the tenant and the quality of the lease base. The presentation describes Rami Levy Shikma Marketing as an essential tenant to the economy that remains active in emergency periods. In the aggregate tenant data, the coverage ratio is above 2 and occupancy cost is 3%. Those are not the metrics of a tenant that currently looks stretched.
The revenue mix supports that reading. Out of the roughly NIS 44.7 million of consolidated revenue from properties leased to the chain in 2025, about NIS 39.0 million came from fixed rent, only about NIS 1.17 million from variable rent, and about NIS 4.33 million from management fees. So the exposure is not built mainly on volatile turnover-linked rent. It is built mainly on indexed base rent, plus a management-fee layer. That makes the income more stable, but it also makes the dependence deeper.
There is another detail here that is easy to miss. In the lease appendix the company states that all extension options belong to Rami Levy Shikma Marketing, and when the chain exercises an option no further approval is required from the real estate company. So the visibility is real, but part of the time control sits with the tenant rather than with the landlord. That is very comfortable while the relationship is strong and the tenant’s business is healthy. It is less comfortable if the company ever wants to reset tenant mix or pricing on its own terms.
Where The Concentration Actually Sits
The company says it does not view all properties leased to Rami Levy Shikma Marketing as “one asset,” because they are different properties with different leases and different risk profiles. At the appraisal level that is fair. At the tenant-risk level it is less convincing. Anyone reading the NOI stream has to ask not only how many properties are involved, but in which properties the economics of the dependence actually sit.
The answer is that the exposure is not peripheral. It sits inside assets the company itself treats as important.
| Asset | Total asset area | Area leased to the tenant | Tenant share of NOI | End of current lease term | Why it matters |
|---|---|---|---|---|---|
| Rami Levy + Talpiot | 10,430 sqm | 9,935 sqm | 67% in 2025 | March 31, 2027 | A material asset where most of the NOI is effectively tied to the anchor tenant |
| Rami Levy + Modiin | 11,616 sqm | 4,391 sqm | 30% in 2025 | March 31, 2027 | One of the assets the presentation chooses to highlight, still with meaningful tenant dependence |
| Atarot Mall | 13,183 sqm | 5,863 sqm | 36.5% in 2025 | January 7, 2029 | The only asset the company classifies as a very material income-producing asset |
The Atarot point is especially important. This is not just another commercial center in the list. It is the only asset the company gives “very material” status. Within that property, Rami Levy Shikma Marketing occupies 42% of the area and generates 36.5% of 2025 NOI. So even at the most important asset layer, the anchor tenant is not merely a large occupant. It is a meaningful share of the economics.
In Talpiot the dependence is even sharper. The asset is leased to 8 tenants, yet the chain contributed 67% of NOI in 2025, after 66% in 2024. That means the formal tenant list does not really change the economic picture. In NOI terms, Talpiot is much closer to a property with one dominant tenant than to a truly balanced shopping center.
In Modiin the picture is less extreme, but still clear. Rami Levy Shikma Marketing accounted for 30% of NOI in both 2024 and 2025. This is an asset with 32 tenants and average occupancy of 92%, so there is real diversification inside it. Even so, 30% of NOI is not a side exposure.
The presentation reinforces this reading editorially. On the selected income-producing assets slide, the company chose to highlight, among others, Modiin+ and Atarot Mall. Those are exactly two of the properties where the annual report discloses meaningful dependence on Rami Levy Shikma Marketing. When the assets pushed to the front of the story are also assets with material exposure to the same tenant, the concentration is not background noise. It is part of how the portfolio is designed.
This Is Portfolio Dependence, Not A Single-Building Issue
Another common mistake is to think the concentration sits mainly in the consolidated layer. In practice it also runs through investees. In the aggregate data as of December 31, 2025, properties held through investees and leased to the chain include 60,734 square meters and generate about NIS 19.2 million of income from the tenant. So even when the portfolio is viewed through the equity-accounted layer rather than through the consolidated balance sheet, the same tenant remains a meaningful part of the engine.
This is also where one of the most revealing disclosures appears. Because of the group’s dependence on Rami Levy Shikma Marketing, the company obtained a commitment under which, if the chain ceases to be a reporting company and the real estate company’s rental income from it rises above 50% of consolidated income, or if coverage drops below 1.2, or if there are liquidity concerns, covenant stress, or a reasonable concern that the chain may not meet its obligations, the chain will provide its financial statements and other required information so the real estate company can continue to disclose material data to investors.
That is a serious detail. Companies do not build this kind of disclosure mechanism around an ordinary tenant. Its existence means the company itself understands that the relevant question is not only whether each asset is valued separately, but whether investors can continue to monitor the tenant’s ability to support a large share of the portfolio’s rent engine.
Why The Pipeline Still Does Not Dilute The Risk
One could argue that all of this is true for the current portfolio, but that development and land are already on the way to dilute the exposure. As of year-end 2025, the report does not support that argument. The company states explicitly that although it has 5 properties classified as investment property under construction, none of them is defined as a material income-producing property under construction. It also states that out of 19 investment land assets, none is defined as material investment land.
The implication is simple: there is still no new, large, clearly identified asset in the financial reporting perimeter that already stands as a material alternative to the current concentration.
More than that, the lease appendix points in the opposite direction. It includes additional agreements with the same tenant for assets under construction or still pending completion of approvals, including in Dimona, Gedera, Hatzor HaGlilit, Acre, Arad, the Beit Shemesh logistics center, and Yehud. For some of these agreements, the report says the detailed contracts have not yet been signed and have not yet received final approvals from Rami Levy Shikma Marketing’s corporate bodies, while the real estate company has already delivered unilateral and irrevocable commitments on the agreed terms.
So even if future NOI does arrive, it may not be NOI that dilutes tenant concentration. It may be NOI that extends it.
Conclusion
Rami Levy Real Estate genuinely benefits from a high-quality anchor tenant. That is the positive side, and it is real. The tenant is essential, the relationship is long-dated, most of the income is fixed and indexed, and current coverage metrics look comfortable. But that is exactly why it is easy to miss that the same stability is also the central concentration inside the portfolio.
2025 did not solve the dependence. It mostly wrapped it inside a wider denominator. Revenue from the tenant rose, the key assets still lean on it at meaningful levels, the exposure runs through investees as well, and the pipeline has not yet proved that it will bring genuinely new diversification.
The right discussion is therefore not whether dependence exists. It does. The real question is whether over the next few years the company can grow NOI from other assets and other tenants fast enough so that the tenant supporting the present does not also end up defining the diversification limits of the future.
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