Israeli real estate group Azrieli Q4 profit rises

JERUSALEM, March 19 Wed Mar 19, 2014 7:59am EDT

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JERUSALEM, March 19 (Reuters) - Real estate developer Azrieli Group on Wednesday reported higher quarterly profit, boosted by a rise in income from office space rentals.

Azrieli, which is controlled by Canadian businessman David Azrieli and has numerous investments in Israel including several shopping malls, earned 407 million shekels ($117.6 million) in the fourth quarter, up from 370 million a year earlier.

Funds from operations (FFO) in its real estate business rose 9 percent in the quarter to 198 million shekels.

Net operating income (NOI), which reflects the group's core business, edged 1 percent higher to 278 million shekels. The gain stemmed from an increase in rent and streamlining measures.

NOI in Israeli retail centres and malls was flat while NOI in income producing properties in the United States slipped 8 percent in the final three months of 2013.

During the quarter, Azrieli invested 326 million shekels in investment properties for a total of 1.04 billion in 2013.

The company plans to build a senior housing facility in central Israel.

"We see this sector as another growth engine and as synergetic with the company's traditional business," said Yuval Bronstein, Azrieli's chief executive.

Azrieli's 4.8 percent stake in Leumi, Israel's second-largest bank, increased in value by 56 million shekels after taxes due to an 8 percent rise in the share price.

Azrieli also owns Granite HaCarmel, which operates in the energy, paint and water sectors. Earlier this month, a source said the firm was in talks to sell its stakes in Granite and its units.

It declared a dividend of 280 million shekels, or 2.31 shekels a share.

This week, David Azrieli said he is donating 5.7 percent of the Azrieli Group, a stake worth some 800 million shekels, to the Azrieli Foundation.

($1 = 3.4606 Israeli Shekels) (Reporting by Steven Scheer)

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