AZRIELI GROUP LTD TEL AVIV, Israel, Nov. 22, 2017 /PRNewswire/ --
Financial Highlights
-- NOI increased by 6%, and totaled NIS 349 million, compared with NIS 328
million in the same quarter last year.
-- Like-for-like Property NOI from assets in Israel grew by 4% compared
with the same quarter last year.
-- FFO attributed to the real estate activities grew by 14% excluding
senior housing and totaled NIS 246 million, compared with NIS 215
million in the same quarter last year. FFO for the entire real estate
activity grew by 3% and totaled NIS 251 million, compared with NIS 244
million in the same quarter last year. This represents the current
investment phase for our senior housing operation. FFO in the
corresponding quarter included a high one-time revenue of NIS 16 million
for apartments that were populated with first-time tenants in Palace
Raanana.
-- During the quarter, the Group invested NIS 178 million in investment
property, in development, the construction of new properties and the
betterment and improvement of existing properties. The total investments
from the beginning of the year totaled NIS 837 million.
-- Net profit in the quarter totaled NIS 263 million, compared with NIS 279
million in the same quarter last year. Comprehensive income in the
quarter totaled NIS 291 million compared with NIS 292 million in the
same quarter last year. The slight decline mainly derives from a
first-time revaluation of the Azrieli Town land in the same quarter last
year.
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Yuval Bronstein, CEO of Azrieli Group (TASE: AZRG): "I am proud to announce another impressive quarter for Azrieli Group which reveals the continued strength of its assets. There has been much recent discussion globally about the future prospects for the retail sector, but with our properties in Israel, we are continuing to experience a growing malls business. We believe that this reflects the footprint of our well located assets in the country, the quality of their management and the attractive tenant composition. Our office segment continues to experience high levels of demand. The leasing out of our new flagship project, Sarona Tower, is ahead of our original expectations - we anticipate that the positive financial impact from the development will first be materially visible toward the end of calendar 2018. Turning to our new development pipeline, we have received approval from the District Planning Committee for our plan to construct the fourth tower in the Azrieli Tel Aviv project which will result in expansion of the space from around 69 thousand sqm to around 150 thousand sqm. We have also recently purchased land for the development of a large project in Petach Tikva. Finally, I recently announced my desire to look to embark on new challenges after 11 years at the Group. I would like to thank all of the investors for their confidence, throughout the years. I believe that my replacement, Eyal Hankin, is the right person to lead the Group to new successes over the coming years.
Highlights:
-- The NOI rose by 6% compared with the same quarter last year.
-- The Same Property NOI in Israel recorded a rise of 4% as a result of a
real rise in income from rent in the malls and offices segments and from
continued lease-up of new projects.
-- The Same Property NOI which includes the office buildings overseas
recorded a rise of 2%. Part of the rise was offset due to the
strengthening of the shekel.
-- 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).
-- September this year had significantly fewer trading days due to the
Jewish High Holidays compared with last year in which the High Holidays
were in October. The 9 month figures for our malls business were
consequently below trend. However, we saw a marked rebound in October,
and have no reason to believe that September was any more than a
challenging comparison due to restricted trading days. In order to
illustrate this further, we are additionally presenting a four-month
period which is a good representation of the comparison vis-à-vis the
same period last year. During the four months July-October 2017,
increases in revenues were recorded in Azrieli's malls at a rate of 5.6%
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 1.2% in revenues compared with the same period last
year. Since the beginning of the year (January-October), increases in
revenues have been recorded of 5.5% in Azrieli malls, and net of the
effect of Azrieli Rishonim mall, an increase in revenues of around 2.1%
has been recorded.
Development Pipeline
-- Azrieli Sarona - the process of habitation of the building is moving
ahead as planned. There are a few last remaining blocks of space for
lease in the building, while as of the date of release of the report,
90% of the office space in the building, including options, has been
leased. In addition, the Company is in the process of advanced drafts of
contract with respect to areas which, if signed, will bring the total
lease-up rate to 95%.
-- Azrieli Rishonim - the Company has been gradually populating the office
space since the second quarter. Thus far, 85% of the office space has
been leased. In addition, the Company is in the process of advanced
drafts of contract which, if signed, will bring the lease-up rate in the
office building to 90%.
-- Petach Tikva - the Company has engaged in an agreement for the purchase
of land in Petach Tikva of an area of around 19,000 sqm for NIS 91
million. The land is situated in the eastern part of the Kiryat Aryeh
Industrial Zone, near an existing office project owned by Azrieli Group.
The land includes building rights for around 53,000 sqm as well as
parking basements. The Company intends to build a combined office and
retail project on the land, similarly to other projects that it has
built.
-- The fourth tower in the Azrieli Tel Aviv project - the Company received,
after the end of the quarter, the approval of the Tel Aviv District
Planning and Building Committee for the construction of the fourth tower
in the Azrieli Tel Aviv project. The committee approved the Company's
full plan, which includes expansion of the space from around 69 thousand
sqm to around 150 thousand sqm of offices, retail, hotel space,
residences and senior housing. The Company intends to build a tower with
mixed uses with retail space at its base which shall be seamlessly
connected to the Azrieli mall, as well as to the light rail station.
Summary of the NOI and the FFO for Q3 and the first nine months of 2017:
NIS in Millions
---------------
Q3 2017 Q3 2016 Change 1-9/2017 1-9/2016 Change
------- ------- ------ -------- -------- ------
NOI 349 328 6% 1,027 965 6%
--- --- --- --- ----- --- ---
Malls and retail centers 213 196 9% 618 579 7%
------------------------ --- --- --- --- --- ---
Offices 97 92 5% 287 275 4%
------- --- --- --- --- --- ---
Offices in the U.S. 29 32 (9%) 91 91 -
------------------- --- --- --- --- --- ---
Senior housing 10 8 25% 31 20 55%
-------------- --- --- --- --- --- ---
FFO from real estate activity(1) 251 244 3% 762 704 8%
FFO from the real estate activity excluding senior housing 246 215 14% 721 665 8%
---------------------------------------------------------- --- --- --- --- --- ---
(1) For details regarding the manner of calculation of the FFO, see Section 1.3.5 of the Board of Directors' report.
Balance Sheet (extended standalone) as of September 30, 2017
-- The Group has cash, deposits and short-term investments in the amount of
NIS 1,333 million.
-- Net debt totaled NIS 7.4 billion.
-- The value of investment property and investment property under
construction totaled NIS 24.8 billion.
-- Equity to assets ratio is 55% and net debt to assets ratio is 25%.
-- Unmortgaged properties amount to NIS 20.5 billion.
-- EPRA NAV per share was NIS 156 per share, compared with NIS 145 per
share on September 30, 2016.
For further details:
Adi Molcho-Weinstein
Head of Investor Relations, Azrieli Group
Office: +972-3-6081781
Mobile: +972-54-5608014
adim@azrieli.com
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SOURCE Azrieli Group
