Omer Engineering: How Much of the Investment-Property Platform Already Produces Rent, and How Much Is Still in Build-Out
At year-end 2025, Omer Engineering carried ILS 251.4 million of investment property, but only ILS 72.1 million was already classified as income producing. Most of the value still sits in assets that are under construction, in planning, or before activation, so the platform is still more future-value heavy than cash-rent heavy.
The main article already argued that Omer's next test is not just reported profit, but the conversion of its investment-property platform into real rent. This follow-up isolates that question: how much of the balance sheet is already working, and how much is still sitting in the build-out layer.
The headline number, ILS 251.4 million, looks substantial. But the more important number is the split inside it. Only ILS 72.1 million, 28.7% of the platform, is already classified as income-producing investment property. ILS 179.3 million, 71.3%, is still classified as investment property under construction. Put differently, the build-out bucket is still about 2.5 times the size of the current rent-producing bucket.
That is not just a balance-sheet distinction. In the segment report, the income-producing real-estate segment generated ILS 8.0 million of revenue and ILS 6.5 million of segment profit in 2025, while the same segment recorded ILS 35.5 million of investment-property fair value gain. The investment-property note tells a similar story: of the ILS 33.3 million fair value gain booked in 2025, ILS 28.7 million came from property under construction, while only ILS 4.6 million came from already-yielding assets.
What Is Already Working
The rent layer did expand. Income-producing investment property rose to ILS 72.1 million from ILS 63.3 million, up 14.0% year over year. In the segment report, revenue increased to ILS 8.0 million from ILS 7.2 million and segment profit increased to ILS 6.5 million from ILS 5.9 million. That is real progress, but it is still small relative to a balance sheet that carries more than a quarter-billion shekels of investment property.
That chart gets to the heart of the issue. Rent is rising, but gradually. What really jumped in 2025 was the valuation line. A reader who looks only at the platform's size on the balance sheet could easily assume this is already a mature rental engine. That would be too aggressive a read.
The composition of the income-producing bucket points in the same direction. It consists of five holdings: rights in the Hachsharat Hayishuv tower in Bnei Brak, an industrial building in Aseret, rights in the ITS office building in Kfar Saba, rights in B.S.R CITY, and part of the MILESTONE project. Two details matter. First, B.S.R CITY is only partly occupied and leased. Second, MILESTONE did move from the construction bucket into the yielding bucket in 2025, but part of the asset was leased to a subsidiary and reclassified into property, plant and equipment. So even when construction is completed, not every completed square meter automatically becomes external rent.
Where The Future Value Sits
The key question is not just how much remains under construction, but what kind of under construction it is. Note 12 shows that the ILS 179.3 million under-construction bucket is not one homogeneous pool.
| Layer | 2025 carrying value | What the filing actually says | Why it matters |
|---|---|---|---|
| Hatenufa complex, Jerusalem | 10.8 | Construction is complete and tenants have started fit-out work toward occupancy and operation | This is the closest asset to turning into current rent |
| Bazel Park, Beit Shemesh, Migdalei Atid | 68.4 | Advanced construction stages, active build-out, or a project that is under construction | This is mainly execution, completion, and lease-up risk |
| Hod Hasharon, Pardes Hanna, Techno Park Ashdod | 100.1 | Rezoning, land with rights, or a project approaching the start of construction | This is first a planning and timeline risk, and only after that a rent risk |
That decomposition matters because it shows where the real activation bottleneck sits. Only ILS 10.8 million, 6.0% of the under-construction bucket, is attached to an asset where construction is already complete and tenants are in fit-out. By contrast, ILS 100.1 million, 55.8% of the bucket, still sits in assets that depend mainly on planning, rezoning, or the start of execution. That is not yet a lease-up problem. It is still a maturation problem.
The clearest example is Hod Hasharon. The rights there are carried at ILS 73.5 million at year-end 2025, versus ILS 48.0 million a year earlier, and the company explicitly describes the asset as agricultural land that is still going through planning procedures for a change in land designation and the receipt of building rights. That can be highly valuable, but it is not rent, and it is not an asset that is on the verge of occupancy.
Beit Shemesh, at ILS 51.3 million, is a different case. There the company says it has already started building an industrial structure for lease. That is less a planning story and more an execution story. Techno Park Ashdod, carried at ILS 6.2 million, is even earlier, with construction described as only nearing its starting point. So inside the same balance-sheet line, there are really three different economics: an asset close to occupancy, an asset in active construction, and an asset still dependent on planning and early-stage execution.
What Actually Moved Into Activation In 2025, and What Did Not
It is easy to overread 2025 as a major activation year because MILESTONE was completed and moved from the construction bucket into the yielding bucket. But the numbers tell a more precise story. During the year, ILS 8.6 million was removed from investment property under construction because of that transfer, yet the under-construction balance still grew 24.0% to ILS 179.3 million. What left the bucket was smaller than what was added and revalued inside it.
The valuation assumptions point the same way. The average completion rate used for investment property under construction at year-end 2025 was only 40%, versus 41% a year earlier. That is a small but important datapoint. Even after MILESTONE left the bucket, the portfolio that remained under construction was still not especially close to the finish line on average.
That is why the reader needs to separate two kinds of value. Omer does already have a real rent-producing platform, but it is still relatively limited. Sitting on top of it is a much larger future-value platform, part of which depends on active construction and part of which still depends on planning, rezoning, and getting into execution. As long as that gap remains this large, Omer's investment-property read should stay cautious: less a mature rental engine, more a pipeline of assets on the way.
Bottom Line
At year-end 2025, Omer holds an investment-property platform that looks large on the balance sheet, but only a minority of it is already working as a rent layer. ILS 72.1 million already supports a real yielding base, while ILS 179.3 million still sits in the build-out layer, and most of the year's fair value uplift came from that layer.
That means the next trigger in the story is not another revaluation line. It is activation. The market needs to see income-producing segment revenue start growing faster, assets such as the Hatenufa complex actually move into occupancy, and large positions such as Hod Hasharon, Beit Shemesh, and Techno Park progress in a way that gives the balance-sheet value the shape of rent rather than only future optionality.
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