Beit Gabay and Sky Center: How Much of Gabay’s Cushion Comes from NOI, and How Much from Appraisal and Future Lease-Up?
Beit Gabay gives Gabay a real NOI-producing asset and stronger collateral, but not all of the NIS 142.2 million value rests on today’s leased building. Sky Center is sharper still: at year-end 2025 the cushion still sits mainly on appraisal, completion, and future lease-up rather than current NOI.
The main article already established that Gabay’s income-producing arm is what holds the story together, but also that recorded value is not the same thing as accessible balance-sheet flexibility. This continuation isolates the two assets that sit closest to that gap: Beit Gabay in Tel Aviv and Sky Center in Yehud.
The short answer is sharp: Beit Gabay gives Gabay real NOI, high occupancy, and collateral that works against debt, but the full NIS 142.2 million value does not rest on today’s leased building alone. Sky Center, by contrast, still belongs mostly to the world of appraisal, completion, and future lease-up. Anyone looking at Gabay’s “cushion” as one uniform block is missing that it is built from two very different layers.
That distinction matters because value backed by current NOI and signed rent is one kind of support. Value backed by discount rates, market rent assumptions, future office sales, and occupancy timing is another. Both are legitimate in the filing. They are simply not equal when the question is how much real room the balance sheet actually has.
| Asset | What is already supported today | What is still future | Why it matters to the cushion |
|---|---|---|---|
| Beit Gabay | NIS 6.082 million of NOI, 96% occupancy, 16 tenants, NIS 7.685 million of signed fixed revenue for 2026 | Part of the value still depends on a future mixed-use redevelopment scenario, a 3-year delay, and betterment levy assumptions | This is real collateral, but not all of the value is free or fully supported by the current building |
| Sky Center | 75.6% engineering completion, some contracted or sold area, bank financing already behind it | Only 25.5% of area was under binding lease contracts, and the value still rests on appraisal, completion, and lease-up assumptions | This adds paper value, but by year-end 2025 it was not yet behaving like an NOI asset |
Beit Gabay: There Is a Real Asset Here, but Not All NIS 142.2 Million Comes from Today’s Rent Roll
In income-property terms, Beit Gabay is the more tangible of the two assets. At year-end 2025 it stood at 96% occupancy, produced NIS 7.474 million of revenue and NIS 6.082 million of NOI, and was spread across 16 tenants. Average occupancy for the year was 91%, so even within 2025 the asset improved. It is also one of the assets inside the Series B collateral pool, and by the publication date the old Series Y lien had already been removed and the Series B mortgage had been updated to first rank. For creditors, this is a real, operating, pledged asset.
But that is still a long way from saying that the full NIS 142.2 million fair value is supported by the current building’s NOI alone. The appraisal breaks that value into three distinct layers. The first is the existing building, leased areas, and parking, worth NIS 113.05 million. The second is additional rights under Plan 3358, worth NIS 12.61 million. Only the third layer, which takes the property to NIS 142.2 million, comes from a broader future scenario of a new mixed-use project under Tel Aviv 5000, after betterment levy, a 3-year delay, and interim-use adjustments.
That chart is the core of the distinction. On a conservative read of the appraisal, roughly four fifths of Beit Gabay’s value is tied to the existing building and parking, while roughly one fifth is tied to rights and future redevelopment uplift. That does not make the appraisal aggressive by itself. It simply means the property should not be read as “a leased building worth NIS 142.2 million.”
That upper layer is also more sensitive than a casual read may suggest. The appraiser shows that a 0.5% rise in the discount rate would cut the value by NIS 12.4 million. The appraisal also rests on a 3-year delay until plan approval, a 60% betterment levy on the uplift, and assumed compensation for early evacuation of tenants whose contracts do not include a building-permit exit clause. Even in Beit Gabay, which is the more proven asset in this pair, part of the cushion still depends on a planning and execution path that has not happened yet.
There is another point worth isolating: the quality of the current leases. The two main tenants each account for more than 20% of the property’s income. Tenant A occupies 34% of the area and its leases end in roughly 2.1 years. Tenant B occupies 18% of the area and its lease ends in roughly 1.3 years. So even the real NOI layer is not locked in for especially long.
This is exactly why Beit Gabay is a real cushion, but not a permanent one. The 2026 rent roll still looks strong. By 2027 it drops sharply, and by 2028 almost nothing remains contractually locked. That means the property gives the group a good near-term base, but the quality of that cushion still depends on renewals and on what rent levels the market will support when those renewals arrive.
For equity holders there is one more filter. The company states explicitly that there is no asset-specific financing attached to Beit Gabay because it sits inside the Series B collateral basket. At year-end 2025 the loan-to-collateral ratio of the bond series stood at about 73% at the pool level. That is not a technical footnote. It means that even in Beit Gabay, value does not sit as free shareholder optionality first. It first functions as collateral inside a secured debt structure.
Sky Center: The Value Is Already Booked, but the NOI Has Not Arrived Yet
If Beit Gabay is a current asset with an added redevelopment layer on top, Sky Center is almost the reverse. At year-end 2025 cumulative cost stood at NIS 230.138 million, fair value at NIS 211.971 million, carrying value at NIS 195.8 million, and the company recorded a NIS 9.167 million revaluation loss. On paper this is still a very large asset. In practice, it was still an asset waiting for its key operating proof point.
The reason is simple. Engineering completion had already reached 75.6%, but the share of area covered by binding lease contracts stood at only 25.5%. Execution moved faster than lease-up.
That chart tells the whole quality story. Between year-end 2024 and year-end 2025, carrying value rose and engineering completion jumped by nearly 30 percentage points. But the area already backed by binding lease contracts rose only from 20.3% to 25.5%. As of year-end 2025, most of Sky Center’s cushion was therefore not yet supported by signed leases, and certainly not by NOI already flowing through the business.
The assumptions supporting the value are also laid out explicitly. For contracted commercial space, the appraisal uses about NIS 92 per sqm for underground retail and about NIS 122 per sqm for above-ground retail. For vacant space, it assumes NIS 150 per sqm for retail and NIS 60 per sqm for offices. Discount rates range from 6.5% to 6.75% for contracted space and 7% for unsigned space. In other words, by year-end 2025 Sky Center relied less on what had already been proven and more on what the company and the appraiser expected would happen once occupancy arrived.
There is also an accounting complication that sharpens the gap between paper value and future NOI. The company states explicitly that the office component is intended for sale, and that in 2025 it sold offices totaling 1,288 sqm. In another note it adds that by year-end it had six contracts to sell about 1,397 sqm and two additional contracts to lease about 507 sqm. At the same time, the carrying value of Sky Center includes both the value of construction services and the value of offices already sold.
The implication is straightforward: Sky Center is not just “an asset that will one day produce NOI.” Its reported value already contains a blend of future leasing, office sales, and construction-service value. That can still be economically valid. It is simply not a clean future-rental buffer in the classic income-property sense.
The filing also leaves a small but telling clue on maturity. In the material-asset table, the estimated completion date is shown as the third quarter of 2026. In the property-rights note for the same project, the planned completion is presented as the second quarter of 2026. That is not a dramatic contradiction, but it is a reminder that timing still sits inside the value. Until occupancy becomes an operating fact, the schedule remains part of the model rather than a fully delivered outcome.
So How Much of the Cushion Really Comes from NOI
If the answer is framed tightly, Beit Gabay is an asset with a real NOI core, but not a full-value core supported only by NOI. Out of NIS 142.2 million, about NIS 113.05 million is tied to the current building, leased space, and parking. Another NIS 29.15 million is tied to additional rights and future redevelopment assumptions. So Beit Gabay clearly has real operating support, but it also contains a layer that is not accessible without planning, time, and execution.
In Sky Center the answer is sharper. As of year-end 2025, the cushion there rested almost entirely on appraisal, completion, and future occupancy rather than current NOI. Even if one looks at the specific debt attached to the asset, NIS 126.19 million, and gets an apparent spread to the NIS 195.8 million carrying value, that is still a spread living inside a completion, leasing, and sales model. It was not yet behaving like the cushion of an operating asset.
That is exactly why Gabay’s cushion looks stronger at the real-estate layer than at the liquidity layer. Beit Gabay gives the group a real base, but not a fully pure one and not a free one for equity. Sky Center adds important paper value, but as of year-end 2025 it was still more appraisal than cash.
So for the coming quarters, the right way to test whether Gabay’s cushion is truly strengthening is to watch two very simple things. First, Beit Gabay: what happens with anchor-tenant renewals, and at what rent levels. Second, Sky Center: how quickly the project moves from execution percentages and appraisal spreadsheets into occupied space that produces real NOI. As long as those two tests remain open, the cushion remains mixed rather than uniform.
Disclosure: Deep TASE analyses are general informational, research, and commentary content only. They do not constitute investment advice, investment marketing, a recommendation, or an offer to buy, sell, or hold any security, and are not tailored to any reader's personal circumstances.
The author, site owner, or related parties may hold, buy, sell, or otherwise trade securities or financial instruments related to the companies discussed, before or after publication, without prior notice and without any obligation to update the analysis. Publication of an analysis should not be read as a statement that any position does or does not exist.
The analysis may contain errors, omissions, or information that changes after publication. Readers should review official filings and primary sources before making decisions.