Azrieli Group Reports Q3/2023 Results - Seite 2

"In these times, the Group’s commitment to continue to develop and build Israel, as we have done throughout the years, is even greater, and remains a core principle of the Group’s business. We will continue acting on this commitment while maintaining financial strength and responsible conduct in these challenging times, which create both a complex business environment and opportunities.”

Eyal Henkin, CEO of Azrieli Group, said: “As we mobilize and provide resources, Azrieli Group is closing another good quarter with continued growth in all parameters. The Group’s operations in the malls and offices segments presented good results and high occupancy rates. The malls segment is operating fully, with more than 99% of the stores open, opening hours are almost back to normal, as is the visitor traffic. Obviously the results of the malls segment in Q4 will be affected by the war, although to a relatively moderate degree, and our financial strength enables us to successfully address this impact.

"The data centers segment continues to gather momentum in the subsidiary Green Mountain, as a growth engine.

"All of us at Azrieli Group send our heartfelt condolences to the families of the victims and the fallen soldiers, wish all the injured a swift recovery, support our armed forces and hope for the speedy return of all of the hostages and missing persons.”

Occupancy Rates and Store Revenues

• The average occupancy rate (excluding properties under lease-up) was 99% in malls, 98% in offices in Israel, and 97% in senior housing.
• Store revenues – In January-September 2023, a 5.8% increase was recorded in store revenues year-over-year (the increase does not include store revenues of Mall Hayam in Eilat and the retail space in Azrieli Town Tel Aviv). In July-September 2023, a 1.5% increase was recorded in store revenues year-over-year.

Recent Business Developments

After the balance sheet date, at the beginning of October, the Group closed the transaction for the sale of its minority holdings in the U.S. company Compass. In June 2023, Azrieli’s partners announced that they had entered into an agreement for the sale of their holdings in Compass in an amount reflecting an enterprise value of $5.7 billion, and an equity value of $2.7 billion. In accordance with the mechanisms set forth in the agreement with the partners, the Company joined the sale transaction. The transaction reflects a value of approx. NIS 3.2 billion for Azrieli Group’s share. Upon the closing of the transaction, the net cash flow (after a provision for tax and transaction expenses) will be approx. NIS 2.7 billion, and the estimated accounting profit will be approx. NIS 0.9 billion. The sale of the Group’s minority holdings in Compass reflects a gross yield of x2.5 on the investment (in total, Azrieli Group invested in Compass approx. NIS 1.3 billion) with a duration of 2.3 years. The accounting effect of the transaction will be reflected in the Q4/2023 reports. The operating results of Compass are not included in the current quarter.