August 21, 2012 / 8:02 AM / 5 years ago

Israel's Gazit-Globe profit rises as rental income gains

* Q2 net profit 288 mln shekels vs 281 mln

* Q2 rental income up 11 pct to 1.27 bln shekels

* To pay dividend of 0.4 shekel per share

JERUSALEM, Aug 21 (Reuters) - Gazit-Globe, Israel’s largest real estate investment company, posted higher quarterly net profit that was boosted by an increase in rental income and a gain in the value of investment property.

Gazit-Globe said on Tuesday it earned a second-quarter profit of 288 million shekels ($72 million), up from 281 million a year earlier.

Property rental income rose 11 percent to 1.27 billion shekels, while net operating income was up 11 percent to 865 million shekels.

The fair gain from investment property and investment property under development rose to 718 million shekels from 543 million.

During the April-June period, Gazit-Globe acquired 11 income producing properties for 1.86 billion shekels. It also invested 989 million shekels in development and redevelopment projects.

Gazit-Globe’s bottom line was partly weighed down by higher finance expenses.

After the quarter ended, Gazit-Globe completed a deal to take Gazit America unit private. It also sold a majority stake in Royal Senior Care, a subsidiary of senior housing. Gazit-Globe said it would record a gain of $18 million from the deal.

“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,” said Roni Soffer, the company’s president.

“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.”

Gazit-Globe said it would pay a dividend of 0.4 shekels a share, the same as after first-quarter results.

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.

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