Israel’s largest real estate investment firm, Gazit-Globe, has announced strong second quarter earnings for this year. Its Q2 2014 earnings were up from the same period one year ago.
The company reported earnings of $41 million in the second quarter, more than double its income a year ago, despite a net decrease in operating income of 4% from the previous year, which was blamed on the high Shekel as its NOI actually rose 1% or $10 million.
This was offset by a 15% increase in funds from operations.
Roni Soffer, President of Gazit-Globe, said in a press release, “We conclude a positive quarter for the group’s core activity and, notwithstanding material losses recorded by Dori Construction, we saw strong growth in both FFO and FFO per share, while further reducing our LTV, increasing our liquidity, and strengthening our balance sheet. We continue to enhance the quality of our portfolio through capital recycling activity, having recently sold properties in our medical office platform while investing in the Nordic region and Brazil. These steps are aligned with our long-term strategy to focus on our core shopping center operations”
Gazit also announced that an NIS 0.45 ($0.126) per share dividend. Its liquidity totaled NIS 10.9 billion ($3.05 billion). Investments for the quarter totaled NIS 562 million ($163 million).
Its consolidated subsidiary, U. Dori Construction Ltd., reported material deviations in its estimated costs and expected revenues from projects it performed, totaling a net amount of NIS 441 million cumulatively since the fourth quarter of 2012. Gazit-Globe’s board of directors approved the grant to Gazit-Globe Israel (Development) Ltd. of a loan in the amount of up to NIS 200 million that will be used to strengthen the capital structure, liquidity and cash flows of Dori Group.
During the first half of 2014, the Group invested NIS 1.345 million acquiring 3 income-producing properties totaling 49 thousand square meters and adjacent land parcels for future development in a total amount of NIS 734 million ($210 million) and an amount of NIS 611 million ($170 million) in new development and redevelopment projects.
The quarterly report comes three weeks after Gazit announced that it had sold six properties for $205 million. The properties were comprised of approximately 624 thousand square.