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Gazit-Globe Reports Second Quarter 2012 Financial Results

FFO for the Quarter Grew by 45% Totaling NIS 138 Million

Same Property NOI for the Period Grew by 3.8

TEL-AVIV, Israel, Aug. 21, 2012 (GLOBE NEWSWIRE) -- Gazit-Globe (TASE:GLOB) (NYSE:GZT), one of the world's leading multi-national real estate companies focused on acquisition, development and redevelopment of supermarket-anchored shopping centers announced today its financial results for the three months (the "quarter") and six months (the "period") ended June 30, 2012.

References to the "Group" relate to Gazit-Globe's consolidated statements. References to the "Company" relate to Gazit-Globe's stand-alone financial statements. Unless otherwise stated, financial information included in this press release relates to the "Group".

Highlights:

  • NOI for the quarter increased by 11% to NIS 865 million compared to NIS 780 million for the same quarter last year
  • FFO for the quarter increased by 45% to NIS 138 million (NIS 0.84 per diluted share) as compared to NIS 95 million (NIS 0.61 per diluted share) for the same quarter last year
  • Investments during the quarter totaled NIS 1,836 million, compared to NIS 1,364 million the same quarter last year. Investments during the period totaled NIS 2.85 billion, compared to NIS 4.74 billion the same period last year
  • Net income attributable to the Company's shareholders for the quarter totaled NIS 288 million (NIS 1.70 per diluted share) compared to NIS 281 million (NIS 1.80 per diluted share) for the same quarter last year
  • Total Same-Property NOI for the period grew by 3.8% compared to the same period last year and occupancy rate as of June 30, 2012 increased to 94.5% compared to 94.1% as of June 30, 2011
  • Shareholders' equity as of June 30, 2012 totaled NIS 7,906 million (NIS 48.0 per share), compared to NIS 6,253 million (NIS 40.5 per share) on June 30, 2011 and NIS 7,310 million (NIS 44.4 per share) as of December 31, 2011
  • EPRA NAV per share as of June 30, 2012 was NIS 56.2 compared to NIS 42.5 per share as of June 30, 2011 and NIS 49.4 as of December 31, 2011
  • As of June 30, 2012, the Group had cash on hand and unutilized revolving credit facilities of NIS 8.5 billion, of which NIS 2.1 billion are at the Company's level
  • As of June 30, 2012, net debt to total assets (LTV) was 57.5%, compared to 60.6% on June 30, 2011and 58.0% on December 31, 2011
  • Subsequent to June 30, 2012, the Company announced the completion of the transaction to take Gazit America private. The Company acquired the outstanding common shares of Gazit America not already owned by it and First Capital Realty acquired its medical office and retail properties. As part of the arrangement, FCR allocated approximately 4 million of its shares to Gazit-Globe 
  • Subsequent to June 30, 2012, the Company's private subsidiary Royal Senior Care (60%) completed the transaction to sell the majority of its wholly-owned senior housing properties in the U.S. The properties were sold for a total gross consideration of US$ 230 million of which the Company's portion is US$ 138 million. Royal Senior Care will continue to own its joint venture interest in two senior housing properties, one fully-owned senior housing community and a tract of land held for future development. As result of this transaction, Gazit-Globe will record a gain of approximately US$ 18 million and net proceeds of approximately US$ 70 million, all after transactions costs and before taxes

Roni Soffer, President of Gazit-Globe: "We have concluded another strong quarter in which we see the positive impact that  the substantial investments we have made over the last few years have had, among other things, on the rental income, NOI and FFO, all of which have shown impressive growth. Recently we announced two transactions, taking Gazit America private and selling the majority of our senior housing facilities in the U.S. Both of these transactions will have an immediate positive effect on operations and show the group's ability to acquire, manage and develop properties and operations and successfully recycle capital while creating substantial cash flow. These transactions are part of our strategic plan to direct management's attention to our core business while improving efficiencies and taking advantage of opportunities in the global real estate market."

Financial Highlights for the three months ended June 30, 2012:

  • Rental income increased by 11% to NIS 1,268 million compared to NIS 1,146 million in the second quarter of 2011
  • NOI increased by 11% to NIS 865 million compared to NIS 780 million in the second quarter of 2011
  • Proportional consolidated NOI increased by 17% to NIS 539 million, compared to NIS 459 million in the second quarter of 2011
  • FFO increased by 45% to NIS 138 million (NIS 0.84 per diluted share) as compared to NIS 95 million (NIS 0.61 per diluted share) in the second quarter of 2011 
  • Net income attributable to the Company's shareholders for the quarter totaled NIS 288 million (NIS 1.70  per diluted share) compared to NIS 281 million (NIS 1.80 per diluted share) for the same quarter last year
  • Cash flow from operating activities totaled NIS 283 million, compared to a negative cash flow of NIS 20 million in the second quarter of 2011
  • The fair value gain from investment property and investment property under development was NIS 718 million compared to NIS 543 million in the second quarter of 2011

Financial Highlights for the six months ended June 30, 2012:

  • Rental income increased by 10% to NIS 2,527 million compared to NIS 2,289 million in the same period last year
  • NOI increased by 11% to NIS 1,705 million compared to NIS 1,534 million in the same period last year
  • FFO increased by 48% to NIS 272 million (NIS 1.65 per diluted share) as compared to NIS 184 million (NIS 1.19 per diluted share) in the same period last year 
  • Net income attributable to the Company's shareholders for the period totaled NIS 546 million (NIS 3.24  per diluted share) compared to NIS 267 million (NIS 1.71 per diluted share) for the same period last year

Acquisition, Development and Redevelopment Activities

During the quarter, the Group acquired 11 income-producing properties totaling 110 thousand square meters and adjacent land parcels for future development for the aggregate amount of NIS 1,862 million. The Group also invested an amount of NIS 989 million in development and redevelopment projects.

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