Blue Square Real Estate first quarter reported a 29% increase in income to NIS 105 million

Blue Square Real Estate concludes the first quarter of 2022 with an increase in rental income and an improvement in indices. However, the rise in inflation has led to a sharp increase in financing expenses and contributed to a decrease in net profit.
Blue Square Real Estate, controlled by Moti Ben Moshe, reported a 29% increase in income to NIS 105 million. The increase in income is due to an 11% increase in rental income, which amounted to NIS 92 million in the first quarter and a recognition of income of NIS NIS 9 million from the "EAST & TLV" project, on Tozeret Ha'aretz Street in Tel Aviv, near the Hashalom train station.
The company's financing expenses rose to NIS 67 million, compared with NIS 22 million in the corresponding quarter last year, following a 1.35% increase in the consumer price index. The increase in expenses led to a net profit in the first quarter of 2022 falling by about 19%, reaching NIS 45 million.
The NOI (net operating income) in the first quarter of 2022 increased by 9% and reached NIS 82 million, compared with NIS 75 million in the corresponding quarter in 2021. The FFO (net cash flow profit) in the first quarter of the year rose to NIS 51 million, compared with NIS 41 million in the same period last year, despite the increase in financing expenses.
Blue Square reported an improvement in the results of the TLV Mall, a significant asset of the company that is worth about NIS 1.71 billion in the books. The company reported that the average rent in the quarter rose to NIS 235 per square meter, while the average rent in new contracts signed rose to NIS 357 per square meter - compared to NIS 318 per square meter at the end of 2021. The company also reported that 16 agreements were signed from the beginning of 2022. Rent regarding about 2,500 square meters at an average rent of about NIS 360 per square meter, and that she is negotiating a rent of an additional 3,000 meters in the mall.
At the Jabotinsky Central Junction, corner of Yitzhak Rabin Road in Petah Tikva, it will include two 32- and 34-story towers. As part of the project, Blue Square Real Estate will pay NIS 377 million for about 37,000 square meters and 161 parking spaces.
The company's equity stands at about NIS 2.29 billion and constitutes about 30% of its balance sheet. Blue Square Real Estate holds cash balances worth about NIS 2.4 billion, including securities and short-term deposits. The value of the company's assets is about NIS 6.5 billion, of which non-encumbered assets are about NIS 3.4 billion.
Blue Square Real Estate CEO Miki Zisman said: "During the first quarter, the company raised a debt of about NIS 1 billion at a negative average interest rate. This gives the company maximum financial flexibility, and places it at a convenient point for continued growth, in line with the forecasts we presented with the publication of the results of 2021. "