Sapir Complex: When Will the Valuation Start Showing Up in NOI?
The Sapir complex generated almost 58% of Giron's 2025 revaluation gains, but only about 1.6% of group NOI. Until the rights story moves into either operating progress or concrete planning execution, the gap between value and income remains open.
Where The Main Article Stopped
The main article argued that Giron's 2025 step-up was driven far more by value creation than by current leasing economics. The Sapir complex is where that argument becomes almost too measurable: in 2025 it generated about 57.8% of the group's revaluation gains, but only around 1.6% of group NOI. That is the core gap.
That is also why Sapir deserves its own follow-up. This is not just another asset with a temporarily weaker yield. It changed economic identity within a single year. In 2024 it was valued at NIS 63.7 million and generated NIS 3.0 million of NOI. In 2025 it stood at NIS 151.6 million of fair value, while NOI fell to NIS 1.6 million and end-period occupancy fell to 89%. The right question here is therefore not whether the appraisal is "high" or "low". It is what part of that value is already supported by rent, and what part still sits mainly on building rights and a plan that has not yet become income.
Value Jumped, NOI Went Backward
The Sapir numbers look like they belong to two different stories. On one side, fair value jumped 138% to NIS 151.6 million after a NIS 87.6 million revaluation gain. On the other side, revenue fell 36.9% to NIS 2.0 million, NOI fell 47.4% to NIS 1.6 million, and occupancy declined from 100% in 2024 to 89% at the end of 2025. Even average rent per square meter barely tells a story of operating acceleration: it moved only from NIS 36 to NIS 37.
In plain terms, Sapir did not become a better earning asset in 2025. It became a more valuable asset on paper. That distinction matters, because in normal income-producing real estate, value and NOI do not usually move in opposite directions this sharply unless the explanation sits in the planning layer rather than in the current leasing layer.
The most striking number is the running yield. Sapir ended 2025 with an actual yield of 1.1% and an adjusted yield of only 1.7%. By comparison, Giron's full industrial and storage bucket generated a 2025 actual yield of 4.9%. So even inside Sapir's own use-category, the asset no longer behaves like a normal stabilized income property. It behaves like an asset whose carrying value depends mainly on something that still has not happened.
| Metric | 2024 | 2025 | What it says |
|---|---|---|---|
| Fair value | NIS 63.7 million | NIS 151.6 million | A 138% jump in one year |
| Revenue | NIS 3.1 million | NIS 2.0 million | Current income actually weakened |
| NOI | NIS 3.0 million | NIS 1.6 million | The asset generated less operating cash |
| End-period occupancy | 100% | 89% | The gap does not come from full operating utilization |
| Actual yield | 4.8% | 1.1% | Value is far ahead of current income |
Why Sapir Is Now Mostly A Building-Rights Story
The explanation sits in the building rights, not in the rent roll. As of December 31, 2025, Sapir includes 7,256 sqm of built area, but it is also linked to 67,319 sqm of unutilized building rights across retail, office, and industrial uses. That is not a small extension to an existing asset. It is a planning envelope that is about 9.3 times the size of the built area that produces today's NOI.
More importantly, the assessed value of those remaining rights stood at about NIS 147.1 million at year-end. That is almost the entire book value of the asset, which stood at NIS 151.6 million. The company also makes clear that this value is based on a zoning plan approved back in 2017 and includes a transfer of rights from a nearby asset it owns. So anyone trying to explain Sapir's valuation through current NOI alone is missing the structure of the valuation itself. By the end of 2025, Sapir is carried far less like a property that earns rent today and far more like a broad rights option with interim rent attached until realization.
The appraisal model says the same thing. In 2023 and 2024 Sapir was valued through an extraction approach. In 2025 the valuation shifted to a combination of comparison and cost through an extraction framework. That is not just a technical appraisal detail. It is another sign that the center of gravity moved from current property yield to the value of what can eventually be built and monetized.
| Value layer | Data point | Why it matters |
|---|---|---|
| Existing built area | 7,256 sqm | This is the part generating rent today |
| Remaining building rights | 67,319 sqm | The rights package is much larger than the current income-producing asset |
| Assessed value of remaining rights | NIS 147.1 million | Almost the entire year-end value of the asset |
| Year-end fair value of Sapir | NIS 151.6 million | Shows how heavily the carrying value depends on rights |
| 2025 revaluation gain | NIS 87.6 million | This is what made Sapir a material asset for the group story |
What Still Has To Happen For Value To Become Income
The problem is that the connecting step still has not happened. The year-end valuation update letter states that Sapir was worth NIS 151.6335 million as of September 30, 2025, and remained unchanged as of December 31, 2025, because there was no material change in the plan under preparation. That is a very important point. Year-end did not bring a new execution proof. It merely preserved the Q3 valuation jump.
That also makes the next proof point clearer. The next catalyst for Sapir is not another appraisal line. For the valuation to start showing up in NOI, at least one of two things has to happen. The first is a real operating recovery, meaning better occupancy and NOI moving materially above NIS 1.6 million. The second is visible progress in the plan under preparation and in the utilization of the rights, so that the planning value begins to move from appraisal language toward an executable monetization path.
What is still missing is timing. There are rights, there is valuation, and there is even a year-end letter confirming that no material change occurred in the plan under preparation. But there is still no disclosed timetable explaining when this gap is supposed to close. That is why the right way to read Sapir at the end of 2025 is not as an expensive yielding asset, but as an asset whose value has run far ahead of its NOI.
Conclusion
Sapir is the asset where Giron is furthest today from a simple income-property story. On one side it already stands at NIS 151.6 million of fair value and contributes almost 58% of the year's revaluation gains. On the other side it exits 2025 with NIS 1.6 million of NOI, 89% occupancy, and NIS 147.1 million of assessed building-rights value that almost overlaps the full fair value on its own.
So the gap here is not a technical footnote. It is the distilled version of the broader company story. Until Sapir shows a real NOI recovery or planning progress that can be tied to a monetization path, it will remain mostly a balance-sheet value asset rather than a meaningful income engine. If that connection starts to appear, Sapir could shift from being the clearest source of Giron's value-to-cash gap to being the clearest place where that gap starts to close.
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