TEL AVIV, Israel, July 27, 2021 /PRNewswire/ -- Gav Yam Land Corporation Ltd. (TASE: GVYM) one of Israel's largest and longest established real estate companies, specializing in the initiation, planning, development, construction, leasing, maintenance and management of hi-tech, logistics, and industrial parks and centers throughout Israel, today reported its results for the second quarter and first half of 2021.
- Ongoing strength and stability across all financial parameters and accelerated growth in its real estate development activity, which includes 12 projects, with a total area of ~400,000m² (of which the Company's share is ~340,000m²) with a total investment of about NIS 2.5bn (the Company's share). ~40% of the areas in these projects have already been marketed.
- Net income attributed to shareholders amounted to ~NIS 460 million in the first half of 2021, compared with NIS 125 million in the same period last year with the growth mainly due to an increase in income from the appreciation in the fair value of real estate compared to the corresponding period last year.
- Cash flow from operating activities amounted to ~NIS 232 million in the first half of the year, an increase of 17% compared with the corresponding period last year.
- Rental income in the first half of 2021 amounted to ~NIS 269 million, similar to that of the corresponding period last year.
- NOI in the first half of the year amounted to ~NIS 259 million, unchanged from last year.
- EBITDA in the first half of 2021 amounted to ~NIS 242 million, similar to that of the corresponding period last year.
- FFO attributed to shareholders amounted to ~NIS 124 million in the first half of 2021, similar to that of the corresponding period last year.
Avi Jacobovitz, CEO of Gav-Yam, commented, "We are seeing demand from global technology companies for the establishment of new development centers in Israel. This demand is strongly driving the income-producing real estate industry in Israel ahead and provides accelerated growth in the office rental market.
"High-tech companies, within the context of Israel as a leading technological power, show continued growth and leads the trends in the market.
"The Tel Aviv office market, in particular, is at the forefront and is expected to strengthen and expand in the coming years. High-tech companies have chosen to be an integral part of the Tel Aviv metropolitan area and lead the demand as part of this structural process. Gav Yam continues to show strength and meet this demand in all its compounds across the country
"In the second quarter of 2021, the Company signed 58 lease agreements, with an average real increase in rents of ~12.4% (in existing properties). In the first half of 2021, the Company signed 78 leases, with an average real increase in rents of ~9.7%.
"We are experiencing very strong demand in the Gav-Yam complexes in Herzliya Pituach, North of Tel Aviv. Among the contracts signed in the first half of the year, 6 contracts were signed in Gav-Yam Park Herzliya North, with a real increase of ~16%. Gav-Yam's complexes in Herzliya, which include about 260,000m², are attractive to the leading global tech companies. The Company is in the process of planning the expansion of the O2 campus in Herzliya, with a total area of about 45,000m².
"The Company showed continued stability across all operational parameters as well as financial strength, which is reflected in cash balances of approximately NIS 1.5bn, leverage of 50.5%, an AA debt rating by Maalot (S&P's Israel affiliate), and 100% of the Company's assets are unmortgaged. The Company continues its trend of stability in occupancy levels and an increase in rents. "
Financial Results Summary
Gav-Yam published its financial reports for the second quarter and the first half of 2021. It continues on a very clear path of intensive activity, which includes a significant accumulation of 12 projects, amounting to ~400,000m² (of which the Company's portion is ~340,000m²), with a total investment of ~NIS 2.5bn, and expected revenue of ~NIS 208m, which is an addition to ~NIS 127m to the FFO attributed to shareholders. About 40% of the areas in these projects have already been marketed. After the completion and population of the projects initiated, at the end of 2024, the Company's assets will stand are expected to stand at approximately 1,380,000 m², with annual revenues of approximately NIS 775m. This represents a significant growth in activity, which places Gav-Yam in a new position
At the same time, the Company is in the process of planning and licensing seven projects with a total area of about 160,000m² (of which the Company's share is 134,000m²), in addition to the planning process of two server farms in Haifa and Jerusalem.
Gav-Yam has properties covering ~1,030,000m², with a diverse spread, both geographically and across sectors, covering 19 cities throughout Israel, including 22 parks and high-tech centers, offices, logistics, industry and commerce. The Company's properties are located in high demand areas in Israel adjacent to main road arteries, premium buildings, with high LEED (Leadership in Energy and Environmental Design) standards. In addition, the Company maintains available building rights in reserve, amounting to ~490,000 square meters.
Gav-Yam has ~440 customers, including large international and top-tier companies including the largest technology corporations in the world. As at year-end 2020, the Company's backlog of signed lease agreements amounted to NIS 2.3bn for income-producing properties, and NIS 2.75bn including signed lease agreements for construction projects. The average lease agreement is ~4.4 years.
The Company also has strategic partnerships with the leading academic institutions in Israel. This is for future developments, and brings the highest quality in terms of technology and manpower. Gav-Yam significantly deepens these activities and collaborations, which include, among others, the Hebrew University of Jerusalem, Ben-Gurion University of the Negev and the Weizmann Institute.
Gav-Yam has set itself the goal of broadening its activities in the field of industry and logistic centers, an market segment which is in its growth phase in Israel. Gam Yam believes it provides a stable anchor with great demand and it is one of the areas in which the Company intends to focus on. Gav-Yam is currently initiating four projects in this field, with a total volume of approximately 75,000m², of which 65% has already been marketed.
Gav-Yam Land Corporation Ltd. is one of Israel's largest, longest established real estate companies.
The company specializes in the initiation, planning, development, construction, leasing, maintenance, and management of hi-tech, logistics, and industrial parks and centers nationwide, as well as in the construction of dedicated complexes planned for long-term leasing. Through a wholly owned subsidiary, Gav-Yam also provides a variety of maintenance management services to tenants throughout the leasing period.
Gav-Yam was founded in 1928, and has been listed on the Tel Aviv Stock Exchange since 1978. Today, the company's shares are included among the leading indices of real estate (Tel-Bond 60) and large companies (TA-125). In addition, the company's debentures are rated AA by S&P Maalot and Aa2 by Midroog.