Mivne: After Completion, What Solalim Still Has To Prove
The completion certificate at Solalim removes construction risk, but it does not close the economic test. Residential monetization is already advanced, while the office component still has to prove how quickly signed leases, handovers, and fit-outs become recurring NOI.
The main article argued that Solalim had moved out of construction risk and into absorption risk. This follow-up isolates that exact handoff. The completion certificate received for the residential buildings on March 2, 2026, and for the office towers on March 16, 2026, answers one critical question: the project was completed. It does not answer the next one, which is the question that really shapes 2026 and 2027 economics: how quickly completion turns into handover, leasing, apartment monetization, and recurring NOI.
What is already working is fairly clear. By year-end 2025, the income-producing component of Solalim was shown at 96% completion, fair value of NIS 1.571 billion, only NIS 49 million of estimated remaining construction cost, and 62% of the space already covered by binding lease agreements. On the residential side, 245 sale contracts had been signed by year-end, and the investor presentation raised that number to 248 out of 360 units. In other words, execution risk is much lower, and the project is no longer waiting for another massive capital push to stand on its feet. It is mainly waiting for commercial absorption.
The bottleneck now sits in offices, not in concrete. The company already signed anchor tenants Fattal Workspaces and Switch Up for 35.8 thousand square meters and 266 parking spaces, with average annual rent and management consideration of about NIS 66 million plus VAT during the first lease term. That is a meaningful base, but it is still not the same thing as actual NOI, and it is not the same thing as the NIS 109 million to NIS 115 million of stabilized NOI that the company itself estimates at full occupancy. The gap between those three stages, contract, handover, and NOI, is exactly what Solalim still has to prove.
Finding one: the completion certificate closed construction risk, but not lease-up risk.
Finding two: residential monetization is further along than office NOI proof, which means the real 2026 test sits mainly in the income-producing component.
Finding three: even in the company’s own presentation, incremental NOI from development projects and non-operating assets is spread across 2026 to 2028 rather than arriving on the day the completion certificate is received.
What Completion Actually Solves
The completion certificate changes the discussion from finishing construction to commercial execution. That is a major shift. At the end of 2024, Solalim was still shown at 81% completion and with only 36% of the space under binding leases. By the end of 2025, completion had risen to 96% and the leased share had increased to 62%. In the first quarter of 2026, the residential buildings, parking garage, and office towers all received completion certificates. Put differently, the heavy construction phase is almost closed and the battleground has moved to marketing, handover, and revenue capture.
The remaining investment tail matters too. Estimated remaining construction cost for the income-producing component stood at only NIS 49 million at year-end 2025, against NIS 1.571 billion of fair value. This is no longer the picture of a project that needs another large capital injection to cross the finish line. It is the picture of an asset that now has to turn paper value into operating income.
But it would be a mistake to give the completion certificate broader meaning than the filings support. It sharply lowers execution risk. It does not provide an updated occupancy rate, it does not show how much space has actually been handed over, and it does not say how much of the signed leasing has already started contributing recurring NOI. From here on, the market will spend less time asking whether Mivne can build and more time asking whether it can convert a new building into cash-generating operations.
Residential Monetization Is Further Along Than Office NOI
Once Solalim is split into its two economic engines, the asymmetry becomes clearer. The residential side is already further down the path to cash. In March 2025, the company signed an agreement to sell 47 apartments to Magurit for total consideration of about NIS 190.4 million including VAT, with the company’s share at about NIS 143 million including VAT. Under that agreement, the first 10% was due within seven days of signing and the balance was due up to seven days before possession. In addition, by year-end 2025 the project already had 245 signed apartment sale contracts, and the presentation lifted that figure to 248. Out of 360 units, that means 112 units were still left to market at the presentation date.
There is also a timing gap worth flagging. The March 2025 sale report set possession for December 31, 2025, yet the residential completion certificate was only received on March 2, 2026. That is not enough to determine the contractual outcome of every sale, but it is enough to remind the reader that the path from a signed sale to actual delivery and cash collection does not always move in a straight line.
The office side is different. Commercial progress is real, but it is not closed. The company disclosed an anchor deal that, under the September 2024 and March 2025 agreements, covered 28.5 thousand square meters and 233 parking spaces, and after a further addendum in August 2025 expanded to 35.8 thousand square meters and 266 parking spaces. During the first lease term, which lasts 129 months from actual handover, average annual rent and management consideration stands at about NIS 66 million plus VAT. The investor presentation adds that in July 2025 the company also signed a lease with the Israel Securities Authority at the project. So this is a real commercial base, not theoretical marketing.
Still, it is not the whole story. The share of space under binding leases stood at 62% at the end of 2025, meaning a meaningful part of the project had already found commercial footing, but a meaningful part remained outside the disclosure of actual NOI. More than that, the anchor tenants alone account for less than the total leased share disclosed by the company, so there is clearly leasing beyond the headline anchor deal, but there is still no full picture here of the remaining space, the entry terms, and the pace of handovers.
| Component | What Is Already Locked In | What Is Still Open |
|---|---|---|
| Residential | 248 units sold by the presentation date, including the 47-unit Magurit block sale | Timing of handover, collection of the remaining consideration, and marketing of the 112 units still left |
| Offices and retail | Completion certificate, 62% of space under binding leases at year-end 2025, and an anchor deal for 35.8k sqm and 266 parking spaces | Pace of actual handover, lease-up of the remaining space, and conversion into recurring NOI |
A Completion Certificate Is Not The Same Thing As NOI
This is the core issue. The company itself presents Solalim with estimated NOI of NIS 109 million to NIS 115 million at full occupancy. At the same time, it discloses an anchor agreement with average annual rent and management consideration of about NIS 66 million during the first lease term. These are both important numbers, but they are not the same number. NOI describes the operating-income potential of the whole income-producing component at full occupancy. Average annual consideration describes one specific lease package, and even that calculation does not include the company’s participation in fit-outs for the leased premises. Anyone reading the completion certificate as if it were equivalent to full NOI is taking a shortcut the filings themselves do not support.
That gap matters for two reasons. First, even after the large lease package and the completion certificate, part of the value still depends on handover, fit-outs, occupancy, and leasing of the remaining income-producing inventory. Second, the company has not yet disclosed an updated figure for NOI already captured in practice after completion. So the economic proof is still in front of the company, not behind it.
That is precisely why the 62% leased figure matters more than the completion headline. It says the project reached the physical finish line with a real commercial base already in place, but also with a material portion still left to absorb. That is not a criticism of the project. It is a precise description of the kind of year now ahead: not a construction year, not a fully stabilized year, but an absorption year.
Management’s Own Presentation Points To A Ramp, Not A Jump
The investor presentation gives an important clue here. It does not isolate Solalim on its own. Instead, it presents expected NOI growth from development projects and from assets that had not yet become operational. Under that presentation, only NIS 8 million of the cumulative increase is already present at the start of 2026, another NIS 79 million is expected during 2026, by the start of 2027 the cumulative figure reaches NIS 87 million, another NIS 66 million is expected during 2027, and another NIS 33 million during 2028, taking cumulative growth to NIS 186 million.
That does not mean all of that growth belongs to Solalim. The slide covers the broader pipeline of projects and non-operating assets. But it does show how management itself frames recognition speed: not as a one-day event tied to the completion certificate, but as a ramp that builds over several periods. So even if Solalim is a key project, the correct reading is a process, not an instant step-up.
That is also why the main article argued that 2026 is a proof year rather than a victory year. Solalim is one of the assets that can improve Mivne’s office story, but it still has to show three things in sequence: space handover, commercial absorption, and then recurring NOI appearing in the numbers instead of remaining at the level of value and promise.
What Solalim Still Has To Prove
The first requirement is office handover and occupancy pace. After the completion certificate, the key question is no longer whether the project is built but how quickly the space is actually delivered and starts producing income. Without an updated occupancy figure or a visible NOI contribution, the market will remain dependent on follow-up disclosures.
The second requirement is keeping residential monetization distinct from office NOI. Residential already shows real proof of demand, but even there some units are still left to sell and there is a visible timing gap between the handover date originally set in the sale report and the actual completion certificate date. In offices, by contrast, what will determine project quality in the capital-market reading is not only the number of signed leases, but the speed at which those leases become recurring income.
The third requirement is translating value into cash generation. Solalim is carried at a meaningful value and with impressive stabilized NOI potential, but what matters now is not only the end-state value on paper. It is the ability to bring the project to an operating level that justifies that value over the coming quarters.
| Checkpoint For The Next 2 To 4 Quarters | Why It Matters |
|---|---|
| Update on leased or occupied office space after completion | This is the direct measure of whether completion is really turning into absorption |
| First clear recurring NOI contribution from Solalim | This is the move from signed value and contracts into income that actually appears in the accounts |
| Delivery of already sold apartments and continued reduction in residential inventory | This determines how quickly the development component turns into cash |
| Evidence that 2026 NOI growth is actually starting to come from Solalim rather than only from expectations | This will decide whether the project changes the reading of Mivne’s office portfolio as a whole |
Conclusion
The completion certificate at Solalim is an important event, but it is not the end of the thesis. It is the start of it. It tells us that Mivne removed a large part of the construction risk. It does not yet tell us that the company has proven recurring NOI, smooth handover, and full absorption.
On the positive side, residential is already deep into the monetization phase, and the income-producing component reaches this stage with a large anchor agreement, 62% of space under binding leases at the end of 2025, and only a limited remaining investment tail relative to value. On the side still waiting for proof, there is not yet a full picture of handover across the remaining space, the pace of absorption after completion, or the time it will take for NOI to show up in the accounts as a fact rather than a target.
Current thesis: Solalim no longer needs to prove that it will be completed. It needs to prove that it can be absorbed.
What changed: the risk focus shifted from engineering to marketing and to the time it takes to turn completion into NOI.
Counter-thesis: the market may still be too demanding at this stage, because the project already holds material residential and office agreements, which means the hardest part may already be behind it.
What could change the market reading in the short to medium term: follow-up disclosures on handovers, occupancy, residential inventory reduction, and the first visible contribution to NOI.
Why this matters: Solalim is the asset that can decide whether the improvement in Mivne’s office story stays at the level of fair value and promise or moves into recurring income.
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