Follow-up to Turgeman: Mol Hahof and what value is actually accessible
Mol Hahof's appraisal puts the complex at ILS 1.61 billion, but not every layer of that value is equally reachable. The stabilized retail box carries most of the current economics, while a large part of the spread above the specific debt still depends on office lease-up, near-complete space, unused rights, and income streams the bank does not count like rent.
What This Follow-up Is Isolating
If the main article showed that financing still runs Turgeman's story, this follow-up isolates the next question: how much of Mol Hahof's value is already accessible, and how much still sits in layers that need time, lease-up, or permits before they become operating value you can really lean on.
It is easy to get pulled into the headline appraisal: ILS 1.61 billion of rights in the asset against ILS 827.5 million of asset-specific debt. On first read that looks like a cushion of roughly ILS 783 million. But it is not a uniform cushion. Inside that number there is a built and leased retail box, partially leased offices, a commercial floor that was still near completion at the appraisal date, unused building rights, and a management and utilities layer that the appraiser capitalizes but the bank does not treat like rent receipts.
Three points matter immediately:
- The hard debt cover sits in the built retail box. The appraisal assigns ILS 1.001 billion to the built retail area, more than the specific debt on the complex.
- The office layer is not stabilized yet. During 2025 leases were signed and NOI rose, but average occupancy still fell to 76% because the new supply opened faster than it was leased.
- Not every unit of value helps the financing tests in the same way. The financing agreement measures property receipts through a narrower definition that excludes, among other things, electricity income and management-company profit.
Mol Hahof's Appraisal Is a Stack, Not a Single Number
The appraisal itself gives the right way to read the asset. It does not price the whole complex as if every square meter were already operating on the same footing. It capitalizes income from signed leases and uses estimated market rent for the remaining vacant space. In other words, the appraisal total already contains layers of different quality.
The breakdown is unusually clear:
| Component | Value (ILS m) | What it rests on |
|---|---|---|
| Built retail area | 1,000.8 | Active leases and stabilized retail space |
| Floor A, near completion | 166.0 | Space close to delivery, with a 0.97 haircut until Form 4 and final completion certificate |
| Building A | 18.2 | Mix of leased area and self-use or management area |
| Building B | 327.2 | Mix of leased space, self-use area, and 16,023 sqm still vacant and marketed |
| Unused building rights | 77.4 | Planning option, not current rent |
| Management and electricity or gas income | 21.2 | Separate stream from the core real estate itself |
That is the heart of it. Roughly 62% of the ILS 1.61 billion headline sits in the built retail box alone. That means the economic anchor of Mol Hahof is not the future tower and not the planning option. It is the retail core that is already operating.
That also drives the more conservative read of the value above the debt. If you look at the built retail component by itself, it still exceeds the asset-specific debt by about ILS 173 million. So anyone looking for the hard value layer should start there. The offices, the near-complete floor, the unused rights, and the management layer matter, but they do not carry the same degree of certainty.
Note 24 reinforces the same point from the segment angle. The company does not separate the stabilized mall, the offices, and the under-construction elements in its operating disclosure. It keeps them together inside one offices-and-retail investment-property segment. At the end of 2025 that segment carried ILS 1.676 billion of assets and ILS 828.7 million of liabilities. That is useful for scale, but it does not tell the reader how much of that value is already hard rent and how much still needs execution.
2025 Opened New Inventory; It Did Not Fully Stabilize It
Anyone reading only the appraisal line can miss the central 2025 paradox. Operationally the asset still improved: total revenue rose to ILS 105.5 million, NOI rose to ILS 83.4 million, adjusted NOI rose to ILS 89.8 million, and actually leased area rose to 58.6 thousand sqm. At the same time, average occupancy fell to 76% from 99% in 2024.
That is not necessarily a deterioration in the retail core. It is mostly what happens when new office and commercial inventory enters faster than the leasing curve can catch up.
Building B makes the point especially well. The appraiser assigns it ILS 327.15 million, but that total is not one clean office block. It contains roughly ILS 145.5 million for leased upper floors, ILS 57.7 million for leased third and fourth floors, about ILS 3.1 million for self-use or management area, and ILS 137.3 million for vacant shell space. That vacant part is then haircut by a 0.88 factor because lease-up still lies ahead. After the factor, that is about ILS 120.9 million of value that has not yet turned into signed contracts.
Floor A belongs in the same category of value that has been created but not fully converted. The appraiser valued it at ILS 166 million after a 0.97 reduction because Form 4 and final completion were still pending at the appraisal date. The annual report later states that Form 4 for that floor was received on February 24, 2026, one day after the appraisal date. That is an important step forward, but it still does not replace the next required step: turning that floor into actual rent.
You can see the bridge from value to access in the signed-contract schedule versus the financing tests:
| Period | Signed lease income (ILS m) | Minimum property receipts in the financing agreement (ILS m) | Read-through |
|---|---|---|---|
| 2026 | 87.5 | 77.0 | Clears on paper |
| 2027 | 79.9 | 81.0 | Still needs more leasing or a better mix |
That is not a one-for-one comparison because the signed-contract table and the bank's definition of receipts are not the same thing. But it does show the direction. The bank does not ask for value. It asks for receipts. That is why office lease-up and the commercialization of Floor A are not a nice upside option. They are part of the path through which appraisal value becomes real accessibility.
Where Value Gets Stuck On The Way Up
The most important test here is not whether the appraiser can justify ILS 1.61 billion. It is which part of that number actually enters the pipe the lender cares about. The Mol Hahof financing package shows an LTV of about 52% at year-end 2025 against a 75% ceiling, so from a collateral-value perspective the asset does not look stressed. But that is only the first layer.
The second layer is receipt quality. From late December 2026 the property must generate at least ILS 77 million of receipts over the trailing twelve months, and from late December 2027 that floor rises to ILS 81 million. The interesting detail is the definition: property receipts exclude electricity income and management-company profit or loss, and they also exclude rent not actually paid because of discounts or grace periods approved for tenants.
That is where the gap between created value and accessible value comes from. The appraisal adds ILS 21.2 million for the management and electricity or gas layer, but the bank's receipts definition explicitly excludes at least electricity income and management-company profit, so that value layer does not map cleanly into the receipts test. It adds ILS 77.4 million for unused building rights, but rights do not pay interest. It gives value to 16,023 sqm of vacant office shell in Building B, but that area only starts to work once it becomes contracted space.
Put differently, a large part of the apparent cushion above the specific debt is not the stabilized retail box. Once you strip out the vacant office shell in Building B, the near-complete commercial floor, the unused rights, and the management or utilities layer, roughly half of the headline spread above the debt still has to pass through lease-up, execution, or a narrower financing definition before it becomes value you can truly rely on.
And that is before the question of moving value up the structure. Even the financing agreement's own language makes payments to shareholders or related parties subject to the commitment framework. So even when value is created inside Amiri Zichron, it does not automatically become free cash at the parent level.
Conclusion
Mol Hahof is indeed the dominant value driver in Turgeman. On the appraisal numbers, the built retail box already carries most of the value and by itself exceeds the asset-specific debt. That matters because it means the story does not depend only on a planning option.
But what is accessible today is narrower than what has been created on paper. The office layer is still in the middle of lease-up, Floor A has only just moved one step closer to stabilization, ILS 77.4 million sits in unused rights, and the management and utilities layer is not counted by the bank the way hard rent is. The right way to read Mol Hahof is therefore not as one ILS 1.61 billion number, but as a stabilized retail core surrounded by several layers of value that still need to become receipts and financing flexibility.
The next proof points are straightforward. If 2026 and 2027 bring office leasing, commercialization of Floor A, and comfortable compliance with the receipts tests, those conditional layers will start to count like real operating value. If not, they will remain mostly the explanation for why Mol Hahof can look very valuable on paper without all of that value being truly free to shareholders.
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