Reit 1’s Infinity Park: How Much of the Value Is Already Working, and How Much Still Waits for Occupancy

The main article framed Infinity Park as Reit 1’s central bottleneck. This follow-up isolates one narrower question: how much of the value already sitting on the asset is actually working through the income statement, and how much is still waiting for lease-up. At the end of 2025, Reit 1’s share in the complex is valued at NIS 1.32 billion, yet actual NOI was NIS 43.9 million, and management still builds 2026 around only about NIS 44 million from the same asset. This is no longer a construction story. It is a lease-up story.

Four points matter immediately:

• NIS 399.6 million, close to one-third of Reit 1’s rights value in the complex, is attributed to renovated vacant space that still does not produce full income.
• Management’s own full-occupancy NOI estimate for Infinity Park is NIS 80-85 million, so 2026 guidance reflects only about 52%-55% of the economics management believes the asset can eventually deliver.
• The signed lease book still does not look like a stabilized asset: fixed contracted revenue for 2026 is only NIS 48.6 million, versus NIS 46.7 million of actual revenue in 2025.
• Price per square meter does not look like the weak point. Average rent on leases signed in 2025 was NIS 102 per square meter per month, versus NIS 96 in the existing average, so the main problem is leasing pace.

How Much of the Value Is Already Working

The year-end appraisal effectively splits Infinity Park into two different worlds. One is already working: leased space and areas where no major renovation was carried out, valued at NIS 1.0009 billion. The other is the vacant space in buildings that went through major renovation, mainly the campus and the plaza, valued in its current state at NIS 399.6 million. After deducting the NIS 80.4 million leasehold liability, Reit 1’s rights value comes to NIS 1.32 billion.

That is the core point. Nearly one-third of the value is already giving credit to renovated space that has not yet rolled into full NOI. In other words, Reit 1 has already done a large part of the physical upgrade work, but the P&L still does not show a fully monetized asset.

The good news is that the working part of the complex looks reasonable. Actual NOI in 2025 was NIS 43.9 million, and adjusted NOI was NIS 46.9 million. On top of that, excluding roughly 35,000 square meters that were under renovation, the adjusted yield stood at about 5.1%. That tells us the active part of the property already looks like a viable office asset, not a stranded project. The problem is not the base. The problem is the dead space.

Where the Lease-Up Is Stuck

The 52% average occupancy for 2025 is slightly misleading on the downside because it still carries half a year in which roughly 35,000 square meters were under renovation. The more relevant end-period picture is much sharper: the Infinity Tower had already reached about 78% occupancy in the appraisal, and roughly 79% of the tower area was leased by the report publication date. The campus and plaza, by contrast, stood at 44% occupancy in the appraisal, and about 45% leased by the report publication date.

The implication is straightforward. The tower is already behaving like an asset moving toward stabilization, while the campus and plaza are still at a stage where every new lease changes the picture. That also explains why the public park completed in December 2025 matters, but is not enough. Spending roughly NIS 52 million on public areas, food, and seating can improve the user experience and the asset’s marketability, but it cannot replace signed leases.

What is genuinely interesting is that the weakness does not currently look like a pricing collapse. Average rent per square meter on leases signed in 2025 came in at NIS 102 per month, versus NIS 96 across the asset’s existing average. In the Infinity Tower, the appraisal points to average office rent of around NIS 93 per square meter, while the valuation as a whole uses representative average rent of NIS 86 per square meter excluding parking. The appraisal’s local comparison set also points to roughly NIS 80-90 per square meter in newer office towers. The reasonable inference is that the market is still willing to pay, but it is not filling the space fast enough.

There is another important nuance here. The annual filing says there are no major tenants in the asset, and the appraisal says no tenants are due to expire in the coming half-year. That is good for protecting the existing NOI, but it also means the upside is unlikely to come from one anchor lease that fixes everything at once. It is more likely to arrive through a sequence of medium and smaller deals, which means this is a pace story, not a headline story.

Why 2026 Still Looks Like a Proof Year

Management gives the clearest signal itself. In the investor presentation, 2026 guidance still includes about NIS 44 million of NOI from Infinity Park, basically in line with 2025. In the same presentation, management says annual NOI after full occupancy should reach NIS 80-85 million. That tells us the coming year is still not framed internally as a harvest year. It is a transition year in which the asset should keep moving higher, but still not deliver its full earning power.

The signed-revenue table reinforces the same point. Fixed rent components expected from signed contracts stand at NIS 48.6 million in 2026 and NIS 50.7 million in 2027. That is growth, but not a step change. Compared with NIS 46.7 million of actual revenue in 2025, the lease book is moving up, but still does not look like an asset that has truly approached NIS 80-85 million of NOI.

That is exactly the metric the market will need to watch. The main gap is no longer between concrete and occupancy, but between value and signed income. As long as guided 2026 NOI stays around NIS 44 million, investors are still not getting through the P&L what has already been recognized in value.

What the Valuation Already Assumes, and What Is Still Unproven

It is easy to look at NIS 1.32 billion and think the appraiser has already done all the work for Reit 1. That is not quite right. On the one hand, the appraisal clearly assigns meaningful value to renovated vacant space, and the sensitivity table shows that a 0.5% increase in the discount rate cuts value by roughly NIS 70 million. On the other hand, the assumptions do not look detached from the local market on rent. Representative rent of NIS 86 per square meter and discount rates of 5.75%-7.50% are not obviously aggressive relative to the comparison points cited in the appraisal.

So the main debate is not whether the appraiser used an overly ambitious cap rate. It is how quickly nearly NIS 400 million of renovated but vacant space can be turned into income-producing space. That is an important distinction. If the argument were mostly about cap rates, the answer would be more market-driven. Here, it is mostly a commercial execution question.

Conclusion

Infinity Park changed meaningfully in 2025: the heavy work is behind it, the park is complete, and the tower is already close to stabilization. But the campus and plaza are not there yet. A large part of the value is already booked, while a large part of the economics still does not run through the statement. That is why the asset will not be judged over the next year by another polished presentation or another architectural milestone, but by one much simpler number: how much additional area is actually signed.

The narrow thesis here is that Infinity Park is no longer a construction risk, but it is still not a stabilized asset. That middle state can justify more value than current NOI alone suggests, but it does not justify treating the NIS 80-85 million full-occupancy potential as if it were already working. Over the next 2-4 quarters, every read on Reit 1 will have to pass through one question: does nearly NIS 400 million of renovated vacant space finally start turning into signed, income-producing area, or does the gap between value and NOI stay open for another year?