Melisron and its subsidiaries (the “Company”) owns and manages high-quality income-producing properties situated in the centers of Israel’s big cities.
The property portfolio 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 June 30, 2020, the Company owns and manages 24 income-producing properties spanning approx. 833 thousand sqm of leasable space with high occupancy rates of approx. 97%, and 26 thousand parking spaces in addition thereto.
The Company is listed on the TA-35 Index, the flagship index of the Tel Aviv Stock Exchange (TASE), which includes the 35 shares of the companies with the highest market cap on TASE that meet the Index’s threshold conditions, and on the Tel-Dividend Index.
The Company’s Objectives and Goals
The Company operates and manages its business to generate value over time by producing a stable cash flow and by a constant increase in the value of its properties. To accomplish such goals, the Company acts as follows:
- Active management of all properties to generate high store sales for the tenants, which will serve as a driver of continued growth in rent levels.
- Enhancement of the properties’ operational efficiency.
- A proactive approach on the improvement of the malls’ store mix, according to consumer preferences and their changing needs.
- Expansion of the property portfolio by way of mergers, acquisitions, development and construction of new properties.
- Frequent investments in the renovation and appearance of the properties, improvement of existing properties and exhaustion of existing rights therein.
- Focus on offices and commercial income-producing real estate.
- Preservation of financial soundness and direct capital market accessibility.
From the CEO
Due to the COVID-19 crisis, and in accordance with the Emergency Regulations, the Company’s malls were closed (other than business establishments the operations of which were defined as essential) from mid-March to May 6, 2020. Outdoor shopping centers were reopened several days earlier (on April 27, 2020).
Since the reopening of the malls, the Company has focused on several aspects:
- Resumption of regular business in all stores.
- Protection of the health of visitors and employees of the Company’s malls, adhering to the Purple Badge rules.
- Grant of relief and concessions to tenants with the aim of addressing the high rent-to-sales ratio.
- Marketing and advertising of the malls, with various marketing campaigns, such as the offer of coupons given out on the My Ofer app.
- Continued formulation of the right store mix for the Company’s malls and adjustment thereof to the times and to customer tastes.
Since the reopening of the malls and until June 30, 2020, the traffic of shoppers has improved on a daily basis, and, overall, an increase of approx. 6.9% was recorded in store sales in the Company’s malls compared with the same period last year, with an increase of approx. 9.2% recorded in May and an increase of approx. 4.8% recorded in June.
(The increase in store sales was measured from the reopening date, May 7, 2020, compared with the same period last year, excluding the sales of the cinemas, which are still closed, and excluding the coffee shops and restaurants which were more adversely affected by COVID-19 and their sales dropped by 27% compared with the same period last year).
During the quarter, the Company signed agreements for the sale of its malls in Ashdod and Eilat (with the exception of one store that faces the boulevard and is separate from the mall), for approx. ILS 231 million and approx. ILS 67 million, respectively, having exhausted their betterment potential.
The Company simultaneously continues to develop projects under construction in the office segment.
The malls’ business operations will continue to be affected in the near future by the effects of COVID-19 on the health of the public in Israel. The more the infection rate is reduced and the better the crisis is managed on the national level, so the malls’ economic operations will regain strength.