Good morning or good afternoon, and thank you for joining the Azrieli Group's conference call to review the second quarter of 2026. I am very pleased to be with you this afternoon.

We are wrapping up a strong quarter for the Azrieli Group. Our operating results were solid, with real growth across all key business segments.

The NOI increased this quarter compared to last year, but the financial statements do not reflect the full impact, as exchange rates negatively affected shekel-denominated revenue from the data center business, which continued to grow in constant currencies by approximately 4%. In our offices segment, we saw a certain decline, which reflects the one-time termination payment we received last year following Meta's departure from the Azrieli Sarona Tower.

Excluding this one-time payment, our NOI increased by 4% compared with the corresponding quarter last year. In our malls segment, we recorded growth of 9%.

Importantly, we are seeing growth in the malls even when neutralizing the effects of the war last year. The data centers' activity continues to be strong, and we recently signed two new agreements that will contribute to continued growth in this segment.

During the quarter, we continued to invest in expanding and enhancing our portfolio in Israel and in the data center segment overseas. Since the beginning of the year, these investments have totaled more than 1.7 billion shekels.

As always, everything we do is carried out while maintaining strict financial discipline. During the quarter, we completed an issuance of a new bond series, and maintaining high financial strength, together with conservative and responsible financial management, continues to be a central pillar of our strategy.

The results are a clear expression of the Azrieli Group's strength and stability. At the same time, many components of our growth engines are not yet fully reflected in the results, including the data centers' activity, where the combination of signed and income-generating agreements represent potential annual NOI of more than 1 billion shekels, or approximately €315 million.

FFO remained stable compared with the corresponding quarter last year. It was affected by a certain increase in general and admin expenses related to continued investment in our growth engines, especially in data centers.

Eyal will expand on the drivers of NOI and FFO in his remarks. I will now go into more detail in our main operating segments.

In our offices segment, NOI for the quarter was strong and stable, increasing by 4% compared with last year, excluding the one-time lease termination payment of approximately 90 million shekels received in the corresponding quarter from Meta following its departure from the Azrieli Sarona Tower. As a reminder, the space vacated by Meta has been fully leased at better rates, and this is reflected in the results for the quarter.

The Spiral Tower, which is expected to open in about 2 years, is progressing according to plan. The core of the tower has reached already the 80th floor of the 91 stories that we're expecting to build.

The main floor plates have reached already up to the 68th floor of construction, and the aluminum is already at the 55th floor. There is no doubt that the tower will become a unique icon in Israel, and we are seeing interest in the tower both from large international and local companies, and we believe it will be a very significant addition to our portfolio.

Our new campus in Glilot is in the final stages of construction. As previously announced, SolarEdge will occupy approximately 60% of the building, and we are in the process of marketing the remaining space.

This area is becoming a new center of interest, and in our view, the campus is very attractive to both high-tech and other industries, in particular those companies that are looking for unique and large floor plates, where we offer almost 3,000 meters all on one floor. This is a very unique product.

In our mall segment, this was a very good quarter. NOI increased by approximately 9%, and tenant sales also showed strong growth of approximately 8%.

The increase was partly offset by the significant works being carried out to connect the Azrieli Tel Aviv Mall with the adjacent Spiral Tower. As I mentioned last quarter, in order to connect the Azrieli Mall with the Spiral Tower, we removed approximately 3,000 square meters from the mall's leasable area due to the construction works and the future connection to the Spiral Tower.

This is a long-term investment that is expected to significantly upgrade the mall, and ultimately, we will add approximately 16,000 square meters of retail space. We continue to maintain very high occupancy levels while investing consistently in the quality of our portfolio.

Our malls remain a core pillar of the group's business, and we manage them accordingly, continuously refreshing the tenant mix so that our assets stay relevant, engaging, and well-managed. The visitor experience remains front and center, because that is ultimately what drives foot traffic, tenant demand, and rental growth.

In our senior housing sector, we have very active homes, and we continue to maintain very high occupancy with continued NOI growth supported, among other things, by a very great contribution from the medical facilities. We see the medical department as an important complementary product to our senior housing, providing an important service to our customers.

Our new Palace home, the fifth, is in Rishon LeZion, recently opened in June. Approximately 40% of the 274 units have already been sold, and occupancy is currently underway.

The home also includes a medical department and approximately 3,000 square meters of retail space, most of which has been leased. The Azrieli Group's FFO has already benefited this quarter from contribution of the first units delivered from Palace Rishon LeZion, and the impact of this new home on the FFO figure will become more significant as we progress with sales and occupancy of the units.

In our data centers, it's become clear that this activity is a significant component of the group's NOI mix. Excluding the impact of foreign exchange rates, NOI for the quarter increased by 3% compared with the corresponding quarter last year.

Last week, we announced a new data center services agreement in London at our operating campus in Romford, East London. The agreement covers 13.6 megawatts of contracted capacity over an 8-year term, with extension options of up to two additional years.

We expect it to contribute an annual NOI of approximately £25 million, equivalent to roughly 101 million shekels at the current exchange rates, with NOI recognition beginning in the first quarter of next year, 2027. In the earnings report published earlier today, we also announced a data center services agreement at our INAP campus in Norway.

The agreement is with a large international technology company for 5 megawatts over a 15-year term, with a customer option to extend for an additional 15 years. We expect average annual NOI from the transaction to be approximately 24 million shekels.

Together with these new agreements, our contracted NOI now stands at more than 1 billion shekels, or approximately €315 million. We are also advancing construction at our data centers in Mainz, Germany, and in Uvdal, Norway.

Mainz will begin generating income next year, ramping up towards full contribution as capacity will be delivered. As you can see in the images included in our investor presentation on our website, we have made significant progress at Uvdal, where we are developing an 80-megawatt facility.

As a reminder, construction at the site commenced only at the beginning of this year, which makes the pace of this progress particularly notable. We continue to work on additional transactions, as well as on expanding our powered land bank, which today stands at approximately 1 gigawatt.

We are moving forward with determination in developing and expanding this activity in Norway and in additional European countries. We see substantial opportunity in the ongoing AI infrastructure ramp-up, and we are confident in our ability to sustain the momentum in this segment.

The same holds for our real estate activities in Israel, where we are looking ahead to 2027 and preparing for the opening of Lot 10 in Modi'in and the Glilot campus. I will now hand the call over to Eyal for a review of our financial parameters.

Thank you, Danna. We will now review the key financial parameters of the financial statements.

NOI totaled 651 million shekels this quarter, up 3 million shekels versus the same quarter last year. Excluding the impact of foreign exchange rate changes, NOI increased by around 23 million shekels, reflecting an increase of about 4%.

The retail segment recorded an increase of around 22 million shekels in NOI versus the same quarter last year. The increase mainly derives from a real increase in rents, the impact of the CPI, as well as from the impact of provision of recorded in the same quarter last year following Operation Roaring Lion, partially offset by the impact of connecting the Spiral Tower to Azrieli Center.

The offices segment recorded a decrease of around 10 million shekels in NOI versus the same quarter last year. The decrease mainly derives from one-time termination payment of around 90 million shekels received in the same quarter last year from Meta (Facebook) in the Sarona project.

Taking into account the spaces that were vacant in Sarona project in the same quarter last year, the net impact between the quarters totaled around 16 million shekels. This impact was partially offset by real increase in rents and the impact of increase in the CPI.

Data centers decreased by around 12 million shekels, mainly due to the changes in the exchange rate during the period, with an impact of around 16 million shekels. This impact was partially offset by the commencement of income generation from a 4.8-megawatt project in the third quarter of last year.

Senior housing increased by around 4 million shekels, mainly as a result of higher revenues and occupancy rates at Palace Tel Aviv, Palace Ra'anana, and Palace Lehavim, as well as an increase in the occupancy rate of the medical departments, which exceeded the 95% mark. Same-property NOI in Quarter 1 totaled in Quarter Quarter 2 totaled 649 million shekels, compared with 648 million shekels in the same quarter last year.

Excluding the impact of changes in foreign exchange rate, same-property NOI increased by 3%. In calculating the same-property NOI, we excluded the income from Semel Dahari retail properties totaling around 2 million shekels.

The FFO excluding senior housing totaled 411 million shekels this quarter, down 1% versus the same quarter last year. The FFO including senior housing totaled 426 million shekels, up 1 million shekels versus the same quarter last year.

The increase this quarter in FFO including senior housing mainly derives from a decrease of around 4 million shekels in financing expenses and an increase of around 7 million shekels in the senior housing deposits. Conversely, the increase was partially offset by increase of around 6 million shekels in the G&A expenses, mainly due to the expansion of company data centers operations.

Excluding the impact of foreign exchange rate changes, FFO including senior housing totaled around 430 million shekels, representing an increase of 1%. Moving on to the balance sheet.

As of the end of the quarter, investment property and investment property under construction totaled around 53 billion shekels, up around 778 million shekels during the report period. The increase was driven mainly by ongoing investments in properties and fair value adjustments, partially offset by foreign exchange rate impact and the classification of the hotel component in the Spiral Tower as a property, plant, and equipment in the amount of around 349 million shekels following the signing of an MOU with an international hotel chain.

On the investment side, during the period, we invested around 645 million shekels in income-producing properties under construction, mainly in the Spiral Tower, the Glilot campus, SolarEdge, Modi'in North Lot 10, and completion of the Palace Rishon LeZion senior housing project. We also continue investing in the group existing income-producing properties.

In the data center segment, we invested around 969 million shekels during the period, mainly in Uvdal project in Norway with a capacity of 80 megawatts. During the quarter, we completed the acquisition of a full ownership right in the land of Romford data center project in London with a capacity of 21 megawatts, which had previously been held under leasehold.

Completion of the acquisition increased the investment property item by around 140 million shekels. Conversely, foreign exchange rate changes led to a decrease of around 844 million shekels in the balance investment property and investment property under construction.

In the report period, we recorded income from fair value adjustments of investment property totaling around 243 million shekels, mainly driving from impact of a lower cap rate on data centers projects. Conversely, a negative impact from the fair value adjustment was recorded in the retail properties, mainly in respect of Modi'in North Lot 10 project, which is under construction, expected investments, and the removal of leasable areas from the Azrieli Tel Aviv Mall following its connection to Spiral Tower.

We also recorded a fair value gain of around 43 million shekels in respect of the company data center project in Germany, which is included under the share in the results of companies accounted for using the equity method item. The weighted IRR of each of the income-producing property segments, retail and offices on one hand and income-producing data centers on the other hand, is around 6.8%.

The gross financial debt is around 30.4 billion shekels. The company net financial debt is around 24.1 billion shekels, comprising around 37% of the total assets.

Gross financial debt increased by around 1.6 billion shekels compared with the end of 2025. The increase mainly derives from the net increase of around 1 billion shekels in bonds.

During June, we completed an issuance of around 2 billion shekels of Series K bonds with an average duration of 15 years, while during the report period, we repaid around 1.2 billion shekels in Series D and E bonds. In addition, CPI-linked debt was impact by increase in the known CPI totaling around 0.3 billion shekels, the issuance of commercial paper in May totaling around 500 million shekels, and loans taken by Semel Dahari totaling around 138 million shekels to finance projects under construction, and the first-time inclusion of a loan of around 177 million shekels secured against the land acquired for the Romford project.

Conversely, the increase was partially offset by impact of around 273 million shekels deriving from foreign exchange rate changes. The company average effective interest rate in the report period is 3%, with an average duration of 6.5 years, while the average interest rate on debt in Israel during the period is around 2.2%.

To conclude, we will briefly review the financial statements results. Net income in the quarter totaled 155 million shekels versus 320 million shekels in the same quarter last year.

The decrease in net income in the report period mainly derives from the impact of fair value adjustments of investment property, with a loss of around 35 million shekels recorded in the current quarter, compared with a gain of around 193 million shekels in the same quarter last year. In addition, financing expenses increase, mainly as a result of a higher average debt balance during the period, as well as one-time financing income recorded in the same period last year following restructuring of a loan in the U.S.

Conversely, this impact were partially offset by an increase in the company share in the results of associate companies accounted for using the equity method, among other things, due to the revaluation of the data center project in Germany, the inclusion of the results of associate companies from Semel Dahari operation, as well as by decrease in G&A expenses compared with the same quarter last year. Comprehensive income in the quarter amounted to a loss of 548 million shekels, compared with a profit of around 258 million shekels in the same quarter last year.

Comprehensive income in the quarter was impact, among other things, by a loss net of tax of around 65 million shekels from the holding of Bank Leumi shares, a loss of around 20 million shekels on interest rate hedging instrument in the in the data center sector, and a loss of around 680 million shekels from translation differences. The loss mainly resultant resulted from the change in the shekel by around 7.4% against the Norwegian krone and by around 6.6% against the euro.

In the same quarter last year, we recorded a loss of around 402 million shekels from translation differences, mainly due to strengthen the strengthening of shekel by 5% against Norwegian krone and by around 9.3% against the U.S. dollar.

We will now hold a Q&A session.

Yes, good afternoon. Two questions from my side on data centers.

The first one is, how much better are the TikTok expansion economics versus the original contract? Going through your report, it sounds like there's upside to the negotiation in terms of pricing.

Then the second question is in terms of the 275 megawatts of contracted in data centers across your Green Mountain portfolio, what is the timing for or the phasing for getting to that stabilized level? Thank you.

Can you repeat the first question, please?

It was on the TikTok negotiation. I'm mindful it's probably quite confidential, but any insight in terms of the potential upside would be very helpful.

Thank you.

Potential upside on—

Could you just say the whole question again, please, Charles? I didn't hear the whole thing.

I was just referring to the TikTok negotiation that was mentioned in the report, where I think it alluded to some upside versus the—

We are negotiating at the moment on 60 megawatts with TikTok, yes, to expand

that

project, yes. The specification of the project and other items are now under discussion.

We believe that we will be able to report something in the next few months. We will see.

Anyhow, it's under negotiation. We believe that the income per kilowatt will be better than the previous one, because a negotiation was in 2022, now we are in 2026, the price should be different.

We cannot add anything above this information, since everything is under negotiation. Once we will have something to report, we will report, but the terms will be different.

The 275 megawatts? Okay.

On your second question, I would like just to understand what do you mean by—

Sure.

On— When we will reach the 275? So— Yes.

Yeah. Okay.

Let's talk about England, yes, the one that we reported just now, 13.6 megawatts. In the beginning of 2027, this will be delivered.

Uvdal project, yes, will be delivered mainly in 2027, yes, and the last phase will be mainly 2027, and the rest in the beginning of 2028. In the next maximum 2 years, everything will be delivered.

KMW, the partially of the first phase will be completed at the end of this year, and the last phase will be completed by 2029. Actually, we are talking about 2, 2.5 years ahead in KMW.

This is a project that we have now in our pipeline, yes. UK, 13.6, it will be to happen in the beginning of 2027.

So 2027, UK, Uvdal till the mid of 2028, and KMW it will be along 2027, 2028, and the last phase, beginning of 2029.

Okay. Just is everything secured in terms of permits, power delivery on this 275, and that's just essentially Green Mountain doing the construction, but everything externally is generally approved and there's no or limited execution risk that's not in your control?

At this moment, as far as we're concerned, we've done everything in our power, and it seems to us that we have mitigated all of the execution risks as far as we can tell. We have everything on track and online with regard to permitting, power, and every aspect, and all the properties, and we believe, according to the best of our knowledge and the best of our abilities, we have everything on track, absolutely.

I would like

just to mention, Charles, that always in construction and development you have some risk, and you need to take it into consideration. Things can change along the way.

We, with our professional background and the ability of our team and our experience till today, we will know how to deliver the project on time, yes, with the right quality. Of course, nothing is 100% certain, yes, and things can be change and, of course, you need to take it into consideration.

Great. Thank you very much.

Okay. Thank you for your interest in the Azrieli Group.

We had a very good quarter. Our portfolio is strong, our development pipeline continues to advance, and we continue to develop our key growth engines in Israel and in our data centers in Europe.

These results reflect the hard work and dedication of our people across Azrieli Group, with amazing teams, and I want to thank everyone for their commitment, professionalism, and everything they do for the company. Thank you again.

Enjoy the rest of the summer, and we look forward to speaking with you again next quarter.