Dorsel follow-up: Cyprus, the revaluation, and what is actually accessible to shareholders
Cyprus did much of the heavy lifting behind Dorsel's 2025 earnings, but most of that value still sits behind an asset layer, a joint venture, and mall-level debt. There is now a first proof of upstream cash, yet it is much narrower than the revaluation headline.
Cyprus looks strong. The question is how much of it actually rises upstream
The main article already separated Dorsel's stable income-producing assets from the accounting gain that lifted 2025. This follow-up isolates Cyprus, because this is where one of the biggest jumps in reported profit came from, and also where the gap between created value and shareholder-accessible value is the sharpest.
The good news is that this is not a weak asset hidden behind a revaluation. In 2025 My Mall kept average occupancy at 99%, revenue rose to ILS 54.7 million, and NOI, net operating income, rose to ILS 41.0 million. Average rent in leases signed during the year jumped to EUR 874 per square meter per year from EUR 519 a year earlier. There is real operating improvement here.
But the core question is not whether value was created. It is where that value sits. The mall's fair value rose to ILS 571.9 million from ILS 461.3 million, while Cyprus revaluation gains jumped to ILS 102.9 million from ILS 36.1 million. That value is created first at the asset layer, then at the equity-accounted company, and only at the end, if at all, at the public-shareholder layer.
What actually improved at My Mall
The asset itself looks solid. The company describes My Mall as the only enclosed mall in Limassol and as having no direct competitor, and the 2025 numbers support the view that the Cyprus issue is not asset quality but the route value takes on its way upward. Leased area rose to 31.8 thousand square meters, average rent rose to EUR 414 per square meter per year, and 100% NOI rose by about 2% to roughly EUR 10.5 million.
The upgrade profile matters as well. In 2024 the company received planning approval to expand the mall's commercial area by 6,000 square meters, and at the current stage decided to execute about 1,100 square meters, which was completed during 2025. That does not explain the entire jump in value on its own, but it does help explain why the increase in rents on newly signed leases looks more like a change in asset quality than a one-off event.
The conservative reading, then, is not that Cyprus was inflated out of thin air. The conservative reading is different: the operating improvement is real, but much smaller than the accounting improvement. Anyone looking only at 2025 net profit gets the impression that Cyprus accelerated sharply. Anyone looking at revenue and NOI sees a much more measured picture.
What the revaluation says, and what it does not
The year-end 2025 valuation was built on 31,485 square meters of lettable area, representative occupancy of 99.85%, representative monthly rent of EUR 31 per square meter, and representative cash flow of EUR 10.368 million. That is no longer just a snapshot of the past. It is a model that assumes near-full stability at the asset, strong representative rents, and another layer of expectation around what else can still be extracted from the site.
This is where the residential rights enter the story. The mall site includes about 4,000 square meters of residential building rights, and the company is working to obtain a building permit. The presentation says an initial application was submitted for 100 units, with estimated sale prices of EUR 3,500 to EUR 4,000 per square meter. That may well add value, but it is still not cash, and it is not income recognized in 2025.
The model sensitivity also shows how assumption-dependent the value is. A 0.25 percentage point increase in the capitalization rate would cut asset value by about ILS 17 million, while a 0.25 point decrease would lift it by about ILS 18.2 million. The right way to read the 2025 jump in value is therefore as a mix of strong asset quality, real operating improvement, and planning option value. That is not the same quality of value as cash already returned to shareholders.
Where the value gets stuck before reaching shareholders
To understand what is actually accessible to shareholders, you have to move from the headline to the structure. Dorsel owns 50% of Limassol Mall, and Limassol Mall owns 83% of the mall companies. That leaves Dorsel with only a 41.5% effective interest in My Mall.
| Layer | Key figure at December 31, 2025 | Why it matters |
|---|---|---|
| The mall itself | Fair value of ILS 571.9 million on a 100% basis | This is where the revaluation sits, but it is not yet the public-shareholder layer |
| Asset-level financing | New EUR 70 million facility, EUR 65 million drawn, and a balance-sheet carrying amount of ILS 229.5 million | Value is pledged to the bank before it is available for distribution |
| Limassol Mall | 50-50 shared control with Ari, cash of ILS 43.7 million, financial liabilities of ILS 14.7 million short term and ILS 300.5 million long term | Even with a good asset, cash has to move through a leveraged joint venture |
| Minority layer | 17% of the mall companies is held by a local partner, and year-end non-controlling interests were ILS 55.1 million | Not all of the mall's economic equity belongs to Limassol Mall shareholders |
| Dorsel layer | ILS 95.6 million equity-accounted investment plus ILS 35.5 million loan to the associate | This is much closer to what Dorsel actually owns, and it is still not free cash to common shareholders |
The number that tells the story better than the mall's headline value is the equity layer at Limassol Mall. At year-end 2025, net assets there stood at ILS 246.1 million. After ILS 55.1 million of non-controlling interests, roughly ILS 191.0 million remained for Limassol Mall shareholders. Half of that is about ILS 95.5 million, almost exactly what sits on Dorsel's balance sheet as the equity-method investment. Put differently, anyone stopping at ILS 571.9 million is stopping two floors too early.
The report does provide evidence that Cyprus is not fully trapped value. In September 2025, a refinancing was signed with Bank of Cyprus: a EUR 70 million facility, EUR 65 million drawn by the report date, repayment of the prior EUR 58 million loan, and at the same time an EUR 8 million dividend. The company's disclosed share of that dividend was about EUR 4 million, and another EUR 2 million was distributed after the balance-sheet date.
That is an important proof point, because it shows that cash can move upstream from the asset. But it also shows how that happened: the first meaningful extraction came alongside a refinancing, not as a parent-level free-cash stream already built into the structure. The non-recourse nature of the loan cuts both ways as well. It protects Dorsel on the downside, but it also underlines that value remains concentrated at the property, pledge, and subsidiary-distribution layer below the public company.
Larnaca and the residential rights are option value, not accessible cash
Cyprus is not just the mall. The segment also includes land inventory that has not yet generated recognized revenue, and this is where Larnaca matters. The Larnaca land was acquired in 2022 for about EUR 5 million plus VAT and was financed by a shareholder loan. The presentation says the 75%-owned subsidiary has residential rights of 4,687 square meters, with a current plan for 54 units and estimated sale prices of EUR 6,000 to EUR 7,000 per square meter.
| Project | What already exists | What still has to happen before this becomes accessible value |
|---|---|---|
| My Mall residential rights | About 4,000 square meters of rights, an initial permit application, a 100-unit concept, and estimated sale prices of EUR 3,500 to EUR 4,000 per square meter | Permit, execution, sales, and conversion of planning value into cash |
| Larnaca | Land acquired in 2022, cost of about EUR 5 million, 4,687 square meters of rights, and a 54-unit plan | Project advancement, financing, execution, and actual sales |
Both can clearly add value later on, but as of year-end 2025 they still sit in the expectation layer. The presentation itself warns about dependence on Cyprus market trends, macro conditions, and local bank credit policy. So two separate statements must be kept apart: Cyprus does carry meaningful planning upside, but there is still no proof that all of that upside will roll into cash that is actually accessible to Dorsel shareholders.
What will decide the next reading
Cyprus produced three different outcomes for Dorsel in 2025. The first was moderate but real operating improvement at My Mall. The second was a much sharper accounting jump in value. The third was a first proof that some of that value can move upward, but on a much smaller scale than the revaluation headline.
That is the central point: anyone reading Cyprus as a profit engine is right. Anyone reading it as if all of that value is already accessible to shareholders is getting ahead of the evidence.
From here, three things matter. First, whether Cyprus can produce further distributions that do not rely mainly on another refinancing round. Second, whether the residential rights at My Mall and Larnaca move into permits, execution, and sales. Third, whether NOI and rents on new leases keep rising without another big jump in leverage or another outsized revaluation. If that happens, the gap between paper value and accessible value will start to narrow. If not, Cyprus will remain a very good asset with only a partial translation to the shareholder layer.
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