Mega Or: how much of the Data Centers value is already backed by NOI, and how much still sits in revaluation

The main article argued that Mega Or’s real 2026 test sits in funding and Data Centers delivery. This follow-up isolates one narrower question inside that thesis: how much of the Data Centers value already has NOI behind it, and how much still rests on revaluation and forward assumptions.

The short answer is fairly clear. The operating proof that already exists is still small: in 2025 the Data Centers segment generated ILS 13.3 million of revenue and ILS 10.1 million of NOI. Against that, the same year carried ILS 233.5 million of revaluation gains, and the year-end property tables showed ILS 390.0 million of Data Centers value. In addition, as early as June 30, 2025, the material fair-value review for plot 62 in Modiin assigned a value of ILS 440.3 million, versus ILS 248.8 million if the asset had not been marked to fair value.

That is not automatically an accounting problem. This is often how an early-stage development platform looks when it enters a new category: value moves ahead on the back of contracts, power access, land, and delivery timetables, while NOI still trails behind. But it does require a clean separation between two very different things: value that has already been booked, and value that has already been proven through operating cash flow.

The first chart tells most of the story on its own. The NOI is real, so the activity is no longer just a presentation story. But the gap between that NOI and the revaluation and booked value is still very large.

What Is Already Backed by NOI

The part that has already moved from promise to execution is still small, but it matters. Phase A of the Modiin facility, with total capacity of about 9.5 MW IT, was fully delivered during the third quarter of 2025 for use by the phase-A customer and additional customers. That is the first true operating anchor of the platform.

The 2025 segment table shows the clean numbers: ILS 13.3 million of segment revenue, ILS 9.5 million of segment profit, and ILS 10.1 million of NOI. Those are the numbers that already sit on real activity, not on projects still under construction.

Put those lines together and the conclusion is simple: as of year-end 2025, current NOI still does not carry the booked value on its back. As a rough indicator, the year-end value of ILS 390.0 million against NOI of ILS 10.1 million implies a current in-place yield of about 2.6%. The ratio of revaluation gains to NOI is also sharp: 2025 revaluation gains alone were about 23 times the segment’s annual NOI.

That is the exact issue the market will need to resolve. If NOI rises quickly over the next two years, those numbers will look like an early capture of real value. If delivery slips, the gap will look like value that moved too far ahead of operating proof.

Where The Value Already Rests on Contracts and Valuation Work

The most important document here is the material fair-value review for plot 62 in Modiin as of June 30, 2025. The value set there was ILS 440.3 million, versus ILS 248.8 million if normal accounting rules had not required the fair-value adjustment. In other words, by mid-2025 there was already a gap of about ILS 191.5 million between adjusted historical carrying value and estimated economic value.

More important than the headline number is how that number was reached. The valuation model was explicitly defined as a discounted cash flow approach. The key assumptions were not based only on current rent or current operating NOI. They were based on projected future cash flows from agreements already signed with customers, while comparison work was used for the part that was still not leased.

This is the key distinction. The Modiin value already capitalizes signed contracts and forward cash flow, but also unleased portions of the site. In other words, this is value that rests partly on contractual value already pointing forward, not only on the NOI that is already flowing through the income statement today.

The valuation file itself also offers a clue about how far value moved ahead of operating proof. In one of its comparison sections, it references a September 30, 2024 appraisal for Maayan 17, plot 62, under which roughly 8 thousand built square meters were leased at about ILS 43 per square meter per month, while roughly 14 thousand built square meters that had become vacant were valued at market rent of about ILS 45 per square meter. This is not the same date and not the same end-2025 operating status, but it does suggest how quickly the site moved from a framework built around leased and vacated area toward a forward Data Centers cash-flow frame.

That leads to the core analytical point: value has already started to recognize part of the future, while NOI is still mostly tied to a very small present. That does not prove the valuation is excessive. It proves the valuation still needs delivery.

Where The Cash Has Not Arrived Yet

Here the picture is even sharper than the revaluation itself. In the investor presentation, the company shows 314 MW IT under construction, 174 MW IT signed, ILS 1.586 billion of construction costs already incurred, and ILS 7.18 billion of future construction costs still ahead. Even after the year in which value already stepped up, most of the actual cash spending still has not happened.

That gap is especially visible in the four heavy projects that carry much of the platform’s next chapter:

This is the number that turns the revaluation debate into a real cash debate. Across the four most important projects, only about ILS 386 million had been spent by the end of 2025, against more than ILS 5.3 billion still left to invest. In other words, the value already sits on a platform far broader than the cash that has actually gone out so far.

There is another layer here. Out of 220 MW IT across those four projects, only 90 MW IT is signed today: 30 MW IT in MDCIL-2 and 60 MW IT in Beit Shemesh phase A. The remaining 130 MW IT is still open.

This is where another distinction matters. The 174 MW IT signed across the wider platform is a strong number. It says the demand side is real. But a very large share of future cost is still attached to projects that have not yet completed the full loop from signing to construction to delivery to NOI. That is why the whole 174 MW IT figure cannot be read as if it were already equivalent to NOI.

What Has To Happen For Value To Move From Revaluation Into Cash

The first bridge is straightforward. Modiin phase B and the Masmiya facility are meant to be delivered during the third quarter of 2026. Beit Shemesh is meant to begin staged delivery from the third quarter of 2026 through the first quarter of 2027. As long as those timetables hold, one can argue that revaluation is running ahead of NOI, but not detached from it.

The second bridge is conversion from signed MW into reported NOI. By the end of 2025, the operating proof still sits almost entirely on one active facility and ILS 10.1 million of NOI. The market will not stay satisfied for long with signed agreements and valuation work alone. It will want to see how much of that signed capacity becomes recognized revenue, how much becomes NOI, and how long the lag is between contract signing and handover.

The third bridge is the spending bridge. ILS 7.18 billion of future cost across the Data Centers platform is not a side note. It is the number that explains why the company can look expensive on current NOI and still look reasonable if it actually meets delivery and gets to the NOI addition shown in the presentation.

That is also why the revaluation debate is not a purely accounting debate. It is a debate about conversion speed. How fast does booked value become NOI, and how fast does NOI become cash that the market can actually measure?

Conclusion

The right reading at the end of 2025 is that most of Mega Or’s Data Centers value still sits in the future more than in the present. What is already backed by NOI is real, but small: only ILS 10.1 million. What is already booked in value and revaluation is much larger: ILS 233.5 million of 2025 revaluation gains, ILS 390.0 million of year-end value in the operating tables, and ILS 440.3 million of value assigned to plot 62 in Modiin as early as mid-2025.

That does not mean the revaluation is wrong. It means the revaluation is, at this stage, a claim on future execution. For that claim to turn into something harder to dispute, Mega Or needs to move through the 2026 to 2027 delivery sequence, scale segment NOI materially, and close the gap between the ILS 1.586 billion already incurred and the ILS 7.18 billion still left to invest across the broader platform.

Put more simply: by the end of 2025, Mega Or’s Data Centers are already a large value story, but still a small cash story. That gap is not a bug. It is the center of the thesis.