JERUSALEM, March 26 Gazit-Globe, Israel's largest real estate investment company, reported lower quarterly profit due to higher revaluations of investment properties in the year-earlier quarter.
Gazit-Globe said on Wednesday it earned 204 million shekels ($59 million) in the first quarter, down from 345 million a year earlier. The fair value gain from properties for investment and under development dropped to 25 million shekels from 185 million a year earlier.
Rental income declined 8 percent to 1.23 billion shekels, but was flat excluding the effect of changes in exchange rates. Funds from operation rose 1 percent to 151 million shekels.
Net operating income (NOI), which reflects the group's core business, slipped 7 percent to 817 million shekels but was up 1 percent excluding exchange rate changes.
Gazit-Globe operates in the United States through Equity One and in Canada through First Capital Reality Inc . It is also the largest shareholder in Finland's Citycon and together with Citigroup controls shopping mall developer Atrium European Real Estate.
Gazit-Globe, which has a market value of $2.2 billion, focuses on supermarket-anchored shopping centres in major urban areas, where growth is often double or triple the country's overall rate.
The company believes the best opportunities are in major cities in Europe and in particular, the company is targeting the Nordic region, the Czech Republic and Poland. It is also starting to build operations in southern Brazil.
Gazit-Globe will pay a quarterly dividend of 0.45 shekel a share, representing an annual payout of 1.80 shekels.
Chief Executive Officer Roni Soffer said the company and its subsidiaries enhanced their liquidity and strengthened its balance sheet during the quarter.
"We thereby remain well-positioned to take advantage of opportunities that arise in the global real estate market," he said.
($1 = 3.4795 Israeli Shekels) (Reporting by Steven Scheer)