Azrieli again reports strong profits

Azrieli Center Photo: Eyal Yitzhar

Azrieli Group made a NIS 1.2 billion net profit, despite unfavorable property revaluations.

Israeli income-producing real estate company Azrieli Group Ltd. (TASE: AZRG) today reported another successful year, despite unfavorable revaluations of properties, with a NIS 1.2 billion net profit. The results included improvement in its major operational parameters.

Azrieli emphasizes that its annual net profit from activity, excluding property revaluations, profit on holdings in shares in Bank Leumi (TASE: LUMI) and Leumi Card, and other influences, grew 10% to NIS 962 million.

Azrieli's fourth quarter net profit surged 50% to NIS 459 million, supported by revaluations, while its fourth quarter profit from current activity rose 11% to NIS 240 million. The trend in its regular parameters was positive, and the company's continued expansion supported 10% growth in net operating income (NOI) to NIS 1.5 billion, together with a 23% increase on the year in funds from operations (FFO) to NIS 1.25 billion.

Same property NOI, on the other hand, rose by a moderate 1% to NIS 1.33 billion, with support from an increase in the company's proportion of properties in the US. Figures for Azrieli's shopping malls dipped 1% to NIS 780 million, while its results were unchanged in offices and residential housing.

Azrieli divides its activity into five areas: commercial centers and shopping malls (17 properties and 335,000 square meters of rental space), offices (14 properties with 548,000 square meters of rental space), income-producing properties in the US (eight office buildings with 246,000 square meters - some with partners), assisted housing facilities (three buildings with 800 housing units, plus two projects in development for construction of 600 more housing units), and activity by Granite Hacarmel, which own Supergas, water and sewage treatment company GES, and others.

Azrieli Group CEO Eyal Henkin said, "We are summarizing a strong year with growth in all of the operating parameters. The office sector is seeing keen demand and its increasing contribution to results is expected to continue. Last quarter we signed a 10-year lease agreement with Bezeq for around 20,000 sqm of office space in the Hamanor Holon project. In the retail and malls sector, the company continued to demonstrate strong performance with impressive growth in store revenues. Over the course of the year, we continued the significant investments in the existing properties, and in strengthening the mix in the Group's malls, while expanding the entertainment and leisure offerings."

He added, "In the last quarter of 2018, we launched the Palace Modi'in project, the first senior housing project that we have developed and built from the ground up, and since its launch it is quickly being populated. We are continuing to vigorously develop several projects in parallel, and have invested around NIS 1.9 billion this year in development, in the purchase of new properties and in the upgrade and improvement of existing properties."

Published by Globes, Israel business news - en.globes.co.il - on March 20, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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Azrieli Center Photo: Eyal Yitzhar
Azrieli Center Photo: Eyal Yitzhar
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