May 26, 2016 / 9:12 AM / 2 years ago

Israel real estate developer Gazit-Globe moves to Q1 loss

JERUSALEM, May 26 (Reuters) - Gazit-Globe, Israel’s largest real estate development company, swung to a net loss in the first quarter due to a revaluation of the company’s financial derivatives.

Gazit-Globe said on Thursday it lost 278 million shekels ($72.5 million) in the January-March period, compared with a 376 million gain a year earlier.

The revaluation alone accounted for a loss of 302 million shekels, it said, adding its bottom line also was hurt by a net loss from the sale of shares in real estate and construction company Dori Group and the reduction in the value of its capital note.

Rental income grew 0.8 percent to 1.54 billion shekels, while net operating income (NOI) increased 2.3 percent to 1.05 billion. Excluding foreign currency fluctuations - mainly an appreciation of the shekel - NOI rose 7.9 percent.

The company said the fair value gain from investment property and property under development was 249 million shekels versus 107 million in the first quarter of 2015.

Gazit-Globe said it will pay a quarterly dividend of 0.35 shekel per share, down from 0.46 shekel in the fourth quarter. It had previously said it would start paying a quarterly dividend of 0.35 shekel a share from the second quarter to reflect an annual dividend of 1.51 shekels a share in 2016.

Gazit-Globe operates in the United States through Equity One and in Canada through First Capital Reality Inc . It is the largest shareholder in Finland’s Citycon , controls shopping mall developer Atrium European Real Estate and is expanding in Brazil.

$1 = 3.8347 shekels Reporting by Steven Scheer

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