Israeli real estate group Azrieli posts Q4 profit fall
JERUSALEM, March 22 (Reuters) - Azrieli Group (AZRG.TA), one of Israel's largest real estate groups, reported a drop in fourth-quarter profit, citing lower valuations for investment properties, higher interest expenses and a growth in overseas debt for data centre investments.
Azrieli on Wednesday reported a profit for the October-December period of 323 million shekels ($88 million), down from 2.2 billion a year earlier.
Net operating income (NOI) rose 13% to 511 million shekels, boosted by its acquisition of Mall Hayam in southern Israel and from rent increases in malls and offices.
Same property NOI increased by about 7%, while funds from operations were flat at 362 million shekels. The value of its investment properties stood at 427 million shekels in the fourth quarter, down from 1.7 billion a year earlier.
"The development of the data centre business, which is one of our growth engines, is making huge progress," CEO Eyal Henkin said.
"We recently reported a significant transaction for the construction of a data centre campus for TikTok, which is a significant step forward in the development of the business and in the expansion of our presence in Europe," he said.
The TikTok transaction is expected to produce an average annual NOI of roughly $79 million at full operating capacity, Azrieli said.
The company reported an average occupancy rate of 99% in malls, 97% in office spaces in Israel, and 98% in seniors housing.
($1 = 3.6564 shekels)
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