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With 570 properties in more than 20 countries, Gazit Globe aspires to hold as much as $2 billion in assets in Brazil by 2019.
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Israeli shopping center operator Gazit-Globe Ltd. is negotiating to buy three shopping malls in Sao Paulo Brazil, according to a report in Bloomberg. This comes as the company has been searching for new urban locations in cities around the world and intends to divest itself of suburban malls.
Since 2008, Gazit-Globe has invested $148 million in Brazil, where it already operates four shopping centers. They hope to increase that number to as many as ten over the next three years. It is currently developing a new center in the Morumbi neighborhood of Sao Paulo, due to open at the end of 2015.
With 570 properties in more than 20 countries, Gazit Globe aspires to hold as much as $2 billion in assets in Brazil by 2019.
As Gazit-Globes’s chairman Chaim Katzman put it, “Brazil is our number one growth market today, no doubt. We need to grow our portfolio, and we’d better do it now.”
According to Bank Leumi, Gazit has divested itself of $2 billion in properties to raise the capital needed for the new acquisitions.
Ella Fried, an analyst at Bank Leumi who has a buy rating on Gazit-Globe shares, told Bloomberg, “These are good long-term investments. Brazil fits exactly the profile they are interested in, in a growing emerging market.”
About 25% of Gazit’s more than $22 billion in assets are invested in emerging markets like Brazil. Israel’s Bank Leumi and Psagot Investment House are both highly optimistic about the firm’s latest moves, believing they will lead to an increase in profits once US interest rates rise again.
Shares in Gazit Globe outpaced the Bloomberg Israel-US Equity Index’s 2.4% return, having increased 6.4% in the past three months to $13.54. The stock rose 2% at the start of trading yesterday.
Currently, 7% of Gazit-Globe’s net operating income comes from Israel with another 1% coming from Brazil. 40% of its revenues come from Europe with the other 52% coming from the U.S. and Canada.
