| Nadav Berkowitz, Real Estate Analyst, IBI Investment House
The Azrieli Group (TASE 🙂 this morning announced the fourth quarter of 2021, which includes a huge revaluation of NIS 2.2 billion in the quarter and a total of NIS 2.4 billion this year, and a reduction in the discount rate to 6.8%. In addition, Azrieli also reports a dividend of NIS 650 million to be distributed in May.
In terms of operating results, as expected Azrieli presents compared to 2020 which included closures, while in 2021 the new acquisitions were added, which include the Green Mountain company and a mall facing the sea in Eilat.
In the field of trading, the NOI has not yet returned to the levels of 2019, when in 2021 it was closed at the beginning of the year, so the NOI in trading amounted to only NIS 665 million, but the annual rate for the fourth quarter already amounts to NIS 780 million. The period is 1.8% compared to 2019 (February to December).
In the field of offices, the company shows a steady improvement to a rate of NIS 744 million per year, and the activity of the data centers also jumped to NIS 30 million NOI in the last quarter.
The company’s FFO expectations after the completion of short-term projects have risen to NIS 1.555 billion, while, as always, the forecast does not take into account the expected improvement in the field of data centers.
This means that Azrieli’s shares are currently trading at a multiplier of 20 according to the annual rate of the last quarter, a multiplier of 18-19 according to the company’s short-term forecast and a multiplier of 17 according to our estimates, which include an addition to initiated assets.
We’re in the IBI. Maintaining a target price of NIS 335 for the Azrieli share and the “excess return” recommendation.
Revaluations: A quarter that includes a huge revaluation of NIS 2.2 billion and a total of NIS 2.4 billion this year.
The capitalization rate decreased from 7.1% to 6.8%
The occupancy rate remains at a high level of 99% in commerce and offices. In properties in the sand, occupancy remained relatively low at 76%.
| Active results
The NOI increased by 31% to NIS 1.59 billion, compared with NIS 1.214 billion in the corresponding period.
The NOI from identical assets increased by 23% to NIS 1.490 billion, compared with NIS 1.216 billion, while the share of offices increased to NIS 620 million, compared with NIS 597 million in the corresponding period.
The FFO without sheltered housing rose to NIS 1.152 billion, compared with NIS 878 million. With sheltered housing, the FFO amounted to NIS 1.318 billion, compared with NIS 999 million (an increase of 32%) in the corresponding period and similar to the level in 2019.
The results of operations
| Divided into sectors
The NOI in the field of trade amounted to NIS 665 million, compared with NIS 425 million in the corresponding period.
The office sector amounted to NIS 702 million, compared with NIS 601 million, an improvement of 17%. The improvement is due to the opening of Azrieli Town and the manor in Holon.
Azrieli’s real estate in the United States fell slightly due to the dollar exchange rate and amounted to NIS 122 million, compared with NIS 129 million in the corresponding period.
The author is a real estate analyst at the IBI Investment House. With respect to information.IBI, the review writers and its editors are not responsible for the reliability of the information, its completeness, the accuracy of the data contained in it or any omission, error or other defect in it.This review does not constitute investment advice and does not constitute Therefore, the information contained therein should not be relied upon and is not subject to independent discretion and the receipt of professional advice that takes into account the data and special needs of each person. In review.