Income producing property company Azrieli Group Ltd. (TASE: AZRG) reported strong results for the second quarter of 2017. Net profit in the quarter totaled NIS 641 million, up 263% from NIS 244 million in the corresponding quarter last year. Profit from revaluation of the real estate properties, net of tax, totaled NIS 409 million (totaled NIS 531 million before tax).
NOI was up 7% to NIS 343 million, compared with NIS 321 million in the corresponding quarter last year. Same Property NOI from properties in Israel grew by 2% compared with the same quarter last year. FFO attributed to real estate activity grew by 11% and totaled NIS 258 million, compared with NIS 232 million in the same quarter last year.
Azrieli Group CEO Yuval Bronstein said, "The key event at the Group occurred towards the end of the quarter when we received the approval for lease-up of the Group's flagship project, Azrieli Sarona tower, and the entry of the first tenant last month. This project is tangible testimony to the extraordinary development capabilities of the Azrieli Group. It is the tallest tower in Israel with the largest office space in a single building. Despite the complexity of the project, we completed it earlier than planned in order to allow the first tenant to enter the building already last month."
He added, "The project is continuing to attract considerable interest among leading international companies, and recently we signed several contracts with companies of this type, including the mega corporations Facebook, which has leased five floors in the building at the initial stage, and Amazon which has leased seven floors at the initial stage. Azrieli Group is continuing the development momentum and is currently developing several projects at the same time, which include the addition of office space and senior housing above some of the malls which are situated in the centers of the large cities in Israel."
During the quarter, the Group invested NIS 405 million in investment property, in development, the construction of new properties and the betterment and improvement of existing properties.
The occupancy rate in Israel in the malls segment was 97% and in the offices segment was 99% (discounting the office space in Sarona, the 2 buildings at phase B in Azrieli Holon center and the office tower in Azrieli Rishonim center, which are at lease-up stages). In the second quarter of 2017 increases in revenue were recorded in Azrieli's malls at a rate of 5.8% compared with the same period last year. Discounting Rishonim mall, which was opened at the end of the first quarter of this year, a rise was recorded of 1.6% in revenue compared with the same quarter last year.
Published by Globes [online], Israel business news - www.globes-online.com - on August 16, 2017
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