M.V. Investments: The Economics of Tel Aviv Micro-Living Versus Regular Apartments
The Tel Aviv cluster is where most of M.V. Investments' embedded upside sits, but this is not a current-rent story. By year-end 2025 the fair value already captured part of the planning optionality, so the micro-living case has to be measured against NIS 205.1 million of updated value, not against today's rent base.
The main article argued that M.V. Investments' portfolio got larger, but the company's room for maneuver still depended on funding. This follow-up isolates the three Tel Aviv assets, Nahmani, Mazeh, and Idelson, because that is where the balance sheet carries its clearest upside layer, and also where one of the most important analytical questions sits: how much of the future value comes from ordinary apartment economics, and how much really depends on the micro-living format.
What already works is obvious. These are three preservation buildings in central Tel Aviv, with scope to raise unit count and reshape the product. What does not work yet is the current operating economics. Together, the three assets generated only NIS 1.99 million of revenue in 2025 against combined year-end fair value of NIS 205.1 million. That is a gross revenue yield of less than 1%. In other words, this is not a stabilized rental portfolio story. It is a story about rights, protected tenants, permits, and product conversion.
That is the key point: in the January 2026 investor presentation, the company puts the three assets at NIS 197.2 million of current value, NIS 245 million under a regular-apartment scenario, and NIS 304 million under a micro-living scenario. The footnote makes clear that these values are shown after full enhancement and after deducting costs. So the micro-living premium is not framed as a gross number before capex.
But the right baseline is no longer NIS 197.2 million. In the year-end appraisals dated December 31, 2025 and filed in March 2026, the same three assets already stood at NIS 205.1 million. Between the January presentation and the annual filing, about NIS 7.9 million of value was already booked. That means the relevant bridge today is not from old rents straight to NIS 304 million. It is from NIS 205.1 million of updated fair value to NIS 245 million under a regular-apartment scenario and NIS 304 million under micro-living.
Three Layers of Value
The value stack looks like this:
| Asset | 2025 revenue, NIS millions | Fair value 31.12.2025 | Regular apartments scenario | Micro-living scenario | Micro premium over regular |
|---|---|---|---|---|---|
| Nahmani | 1.183 | 92.3 | 106 | 131 | 25 |
| Mazeh | 0.361 | 69.47 | 96 | 119 | 23 |
| Idelson | 0.443 | 43.29 | 43 | 54 | 11 |
| Total | 1.987 | 205.06 | 245 | 304 | 59 |
What matters is how the gap is distributed. From year-end fair value to the regular-apartment scenario, only about NIS 39.9 million remains. Moving from regular apartments to micro-living adds another NIS 59 million. So the distinctive upside layer is not enhancement in general. It is the specific product choice. Roughly 81% of the micro premium over the regular-apartment case sits only in Nahmani and Mazeh.
At Nahmani, the company shows a move from NIS 106 million to NIS 131 million. At Mazeh, from NIS 96 million to NIS 119 million. At Idelson, the regular-apartment case adds almost nothing relative to year-end fair value. There, most of what still remains open is already the micro-living layer itself.
That distinction matters because it means the Tel Aviv thesis is not evenly spread across three similar buildings. Nahmani and Mazeh carry most of the optionality. Idelson is much closer to a fill-in layer.
Current Income Barely Explains the Value
This chart explains why the Tel Aviv cluster cannot be read like an ordinary income-producing portfolio. Nahmani, the strongest current earner of the three, generated NIS 1.183 million of revenue in 2025 on fair value of NIS 92.3 million. Mazeh generated only NIS 361 thousand on value of NIS 69.47 million. Idelson generated NIS 443 thousand on NIS 43.29 million of value. Together, the three assets produced a gross revenue yield of less than 1% on fair value.
This is not a yield story. It is a waiting-for-conversion story. The values are being driven far more by what the assets may become than by what they produce today.
Nahmani shows the mechanism clearly. The appraiser applies a 40% discount to protected residential units and a 55% discount to protected commercial space. So even the current value is not being read as clean, free-market real estate. It is being read through a legacy occupancy structure. Mazeh is even sharper. In the dedicated asset section, the company describes a building of 18 apartments with 14 units rented to protected tenants, while the investment-property note says that, at the time the statements were approved, 15 units were rented to protected tenants and an additional evacuation had already been agreed. The exact count differs across sections, but the economic message is the same: the current rent base is still overwhelmingly shaped by protected tenancy, not by market rent.
Idelson is further along in cleaning up the picture. In November 2025, the company signed an agreement to evacuate a protected tenant for NIS 1.5 million, with handover expected in May 2026. So there too, current value already reflects a move away from the legacy occupancy layer.
That is why income and value look so disconnected. The current value is not high because the assets already operate like micro-living properties. It is high because the appraisal framework already gives weight to what can open up once the legal and planning constraints move.
What Is Already in the Appraisals, and What Is Still Open
The most important part of the bridge is what is already booked. By year-end 2025, the three appraisals already embedded about NIS 62.2 million of rights, transfers, and additional buildout potential.
At Nahmani, the appraisal is made up of roughly NIS 12.2 million of commercial and storage value, around NIS 52.0 million of residential value, and another NIS 28.2 million of transferable building rights. In that same opinion, the appraiser also says the planned project itself was not included in the current valuation because planning is still preliminary and protected tenants remain in part of the commercial area. So Nahmani already gets value for rights, but not yet full credit for the micro-living program.
At Mazeh, the structure is similar but even cleaner. The NIS 69.47 million appraisal consists of NIS 50.5 million for built area and NIS 18.95 million for additional rights. Yet the same valuation explicitly says that the route of smaller units, apartment splitting, and additional main and service space should be revisited only after final planning or formal approval. Again, the books already recognize optionality, but not the whole story.
Idelson is more precise still, because the valuation explicitly splits the current owned units from the future-rights layer. The appraiser puts NIS 22.99 million on the core ownership interest, NIS 5.22 million on sub-lot 10, NIS 13.37 million on additional building rights, and another NIS 1.711 million on the rights attached to sub-lot 10. That helps explain why the regular-apartment scenario in the presentation, NIS 43 million for the company's share, is already almost fully reflected in the year-end fair value. Most of the ordinary-apartment step has effectively already been absorbed.
This is the gray zone the reader needs to see. The appraisals are no longer leaving Tel Aviv on old rent economics alone, but they also are not fully adopting management's micro-living presentation. They sit in between. On the one hand, they already book value for rights, transfers, and buildout potential. On the other hand, they still stop short of giving full credit to the jump in unit count, to the small-unit optimization, and to the micro-living format itself.
That leads to one more important conclusion. The NIS 59 million micro premium over the regular-apartment case is a real and distinct upside layer. But not all of the NIS 98.9 million gap between year-end fair value and the NIS 304 million micro-living scenario is unrecognized optionality. A meaningful part of the optionality has already been recognized. What remains open is the harder part.
The Value Is Real, but Access to It Is Still Not Clean
Another easy mistake is to assume that if the assets are worth more, that value is automatically accessible to equity holders. It is not.
Nahmani is pledged to Series A bondholders. Mazeh is pledged to Series B. Idelson, except for apartment 10, is also pledged to Series A, while apartment 10 is pledged to Bank Jerusalem. So even if the micro-living scenario eventually works economically, it first sits inside the debt-and-collateral structure.
That ties directly back to the main article's thesis. Tel Aviv is the clearest source of embedded value in the portfolio, but it is also part of the architecture that supports the financing stack. That means three separate questions need to be kept apart:
- Is there genuine asset-side value above today's operating economics? Yes.
- Is part of that value already sitting in the books? Also yes.
- Will all of that future value be freely accessible to shareholders? That is still open.
This is also why the company itself points to 2030 as the expected completion year across the three assets. The market is not looking at a next-quarter rent improvement story here. It is looking at a long path of planning, execution, tenant evacuation, and financing. As that path advances, the micro-living layer becomes more believable. If it stalls, a meaningful part of the value already recorded could remain paper value for quite some time.
Bottom Line
Tel Aviv is the core upside engine in M.V. Investments, but not in the simple sense that current rent will just grow a bit. The three assets generate very low current income relative to value, so their economics are being read through rights, protected tenancy, and planning. From year-end 2025 fair value, the regular-apartment scenario adds only about NIS 39.9 million. The micro-living case adds another NIS 59 million on top.
That means two things at once. First, there is a real and material upside layer here, especially in Nahmani and Mazeh. Second, the year-end appraisals have already pulled a meaningful share of the optionality into the balance sheet, and the remaining upside still depends on how quickly permits, tenant evacuations, and the collateral structure are turned into a new product and, eventually, into accessible cash.
If there is one sentence that captures the economics, it is this: the interesting gap in Tel Aviv is no longer between old and new, but between value already recognized and value that still needs to be proven.
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