Income-producing real estate company Azrieli Group reported another strong quarter today. Net profit was up 9% to NIS 289 million, and the trend in the main figures was positive. Azrieli's profit in the first nine months of the year jumped 30% to NIS 990 million, after benefiting earlier this year from a large upward revaluation of its properties. The group's controlling shareholder and chairperson is Danna Azrieli.
Azrieli is the largest real estate company listed on the Tel Aviv Stock Exchange (TASE). Its share price has responded positively to the group's results and has now risen 50% this year to an all-time high, with a current market cap of NIS 32 billion, the same as technology company NICE Systems, putting it in the TASE's top five, although the share price actually fell today, by 1.91%.
The third quarter again highlighted Azrieli's growing offices activity, to which it devotes a substantial part of its resources. The group currently has 549,000 square meters of offices, 45% of its total space, with numerous additional projects likely to expand this activity in the pipeline. Azrieli's offices accounted for most of the NIS 175 million increase in the value of its properties this year (the group recorded no significant revaluation in the third quarter).
Occupancy of Azrieli's office towers in Sarona in central Tel Aviv and in Rishon Lezion made further progress in the third quarter, increasing its net operating revenue (NOI) from them by 15% to NIS 152 million. NOI was up 16% to NIS 442 in the first nine months of the year.
The growth in office activity, in which the growth rate was faster than in Azrieli's other spheres of activity, supported a 5% rise to NIS 407 million in NOI from all of its properties. Quarterly NOI from same properties grew 4% to NIS 396 million.
On the negative side, Azrieli's NOI from activity in the US was down 21% to NIS 31 million in the third quarter, a trend attributable to changes in occupancy in some of the properties.
Azrieli's funds from operations (FFO) improved 11% to NIS 311 million, mainly due to the contribution of assisted living facilities. Excluding this category, the increase in FFO was 2%.
Published by Globes, Israel business news - en.globes.co.il - on November 20, 2019
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