Corporate Profile

Financial Management

Melisron and its subsidiaries (the “Company”) owns and manages high-quality income-producing properties situated in the centers of Israel’s big cities.

The Company focuses on retail properties in central locations at the heart of big cities and on office complexes that are mainly marketed to international and Israeli high-tech companies.

As of March 31, 2022, the Company owns and manages 27 income-producing properties spanning approx. 872 thousand sqm of leasable space with high occupancy rates of approx. 98%, and 26 thousand parking spaces in addition thereto.

The Company’s shares are listed on the TA-35 Index, the flagship index of the Tel Aviv Stock Exchange (TASE), which includes the 35 companies with the highest market cap on TASE that meet the Index’s threshold conditions, as well as on the Tel Aviv Real Estate Index and the Tel-Dividend Index.

The Company’s Objectives and Goals

The Company operates and manages its business for the betterment of its properties, for maximum income generation from such properties and in order to bring about the development and growth of the Company’s business. In order to reach these objectives, the Company operates in the following manner:

  • Making frequent investments in the upgrading and appearance of the properties, diversification and adjustment of the mix, improvement of the existing properties and exhaustion of the existing rights therein.
  • Continuing to invest in the development of a strong and effective customer club, “My Ofer”, and creating marketing campaigns in collaboration with the Company’s customers.
  • Infusing the malls’ activities with innovation and creativity, with an emphasis on digitization, while creating additional value for tenants and visitors.
  • Maintaining the financial robustness while extending the average duration of the debt, reducing financing costs and maintaining direct access to the capital market.
  •  Continuing the development and construction of projects according to original schedules.
  •  Implementing the Company’s strategic plan to strengthen and maintain its core business through betterment of the malls and promotion of processes supportive of the core business, alongside development of operations in new areas, both by way of betterment of existing properties through multi use and by way of entry into new real estate segments.

From the CEO

Melisron is ending another quarter with record results, despite the Omicron wave which Israel experienced in the first two months of the year.

The Company has presented an increase in all operating parameters – the NOI increased to an annual rate of approx. ILS 1,170 million, the FFO increased to an annual rate of approx. ILS 850 million, the tenants’ store revenues increased by some 2%, and the occupancy rates in the malls and offices are very high at around 98%. In addition, the average rent increased by some 7% for new contracts signed this quarter.

According to RIS reports, the positive trend strengthened significantly in April 2022, and an average increase of approx. 7% in store revenues of the Company’s malls was recorded, compared with the same period in 2019.

In our office operations, the Company signed a huge contract with respect to around 51 thousand sqm in Tower A of our flagship “Landmark” project in Sarona, Tel Aviv (which is held with a partner in equal shares). The contract is for a total of some ILS 750 million for the first lease period (7 years). With the signing of this contract, some 86% of the area of Tower A, whose construction will be completed in 2023, has already been leased. For the remainder of the space in Tower A there are MOUs in place with potential tenants. In view of the above, the NOI forecast for the project at full occupancy was updated to approx. ILS 324 million, which is an increase of ILS 17 million (approx. 6%) compared with the December 31, 2021 forecast of ILS 307 million.

In the Ofer HaCarmel Park, the construction work is nearing completion and receipt of Form 4 (occupancy permit). During the quarter, the Company signed another contract for an area of some 3,000 sqm, thus bringing the occupancy rate to approx. 47%, with negotiations underway for the rest of the space. In addition, the Company purchased a plot of land of approx. 9,000 sqm adjacent to the Park, as a reserve for future development of the complex.

The Company estimates that the momentum in its business will continue, concurrently with the continued implementation of the strategic plan for the diversification of its sources of revenue and the continuation of its growth and development, including through purchasing land and properties for mixed-use development.

It is emphasized that the CEO’s statement regarding the assessments, forecasts and expectations pertaining to the Company’s continued operations, inter alia, the NOI forecast for the “Landmark” project in Sarona, Tel Aviv, as well as the Company’s purposes and goals which are specified above, are forward-looking information, as such term is defined in the Securities Law, 5728-1968, which is based on the Company’s subjective assessments as of the date of the report, the materialization of which, in whole or in part, is uncertain, or which may materialize in a different manner (including materially), inter alia, due to factors beyond the control of the Company, including changes in market conditions, the amount of time required to approve the building plans for construction, the construction input prices, and the impact of the Covid pandemic, as well as the materialization of risk factors described in Section 31 of Chapter A of the Company’s Periodic Report of March 31, 2022

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