Ms. Rachel Lavine reports

GAZIT-GLOBE REPORTS THIRD QUARTER 2015 FINANCIAL RESULTS

Gazit-Globe Ltd. has released its financial results for the third quarter ended Sept. 30, 2015.

Highlights:

• Net operating income for the quarter increased by 27 per cent to 1,066 million shekels ($272-million (U.S.)) compared with 840 million shekels ($214-million (U.S.)) in the same quarter last year. The increase is mainly due to the consolidation of Atrium's financial reports and the acquisition of Sektor.
• Funds from operations for the quarter increased by 5 per cent to 158 million shekels ($40-million (U.S.)), or 0.89 shekel per share (23 U.S. cents), compared with 150 million shekels ($38-million (U.S.)), or 0.85 shekel per share (22 U.S. cents) in same quarter last year. Excluding the effect of exchange rates fluctuations the FFO for the quarter increased by 21 per cent and FFO per share increased by 19 per cent.
• Investments during the quarter totalled 6.8 billion shekels ($1.73-billion (U.S.)) and included the acquisition of Sektor, Norway's second largest commercial real estate company, for consideration amounting to approximately 1.5 billion euros; the amount was paid both in cash (approximately 571 million euros) and assumption of debt.
• Same-property NOI for the first nine months, excluding the effect of exchange rates fluctuations, decreased by 0.5 per cent (increase of 2.7 per cent excluding Russia), compared with same period last year. The occupancy rate as of Sept. 30, 2015, remained high at a level of 95.5 per cent compared with 95.6 per cent as of Sept. 30, 2014.
• Shareholders' equity as of Sept. 30, 2015, totalled 7,123 million shekels ($1,816-million (U.S.)), or 39.9 shekels per share ($10.2 (U.S.) per share), compared with 7,853 million shekels ($2,002-million (U.S.)), or 44.6 shekels per share ($11.4 (U.S.) per share), as of Sept. 30, 2014. The decrease in shareholders' equity was mainly due to exchange rates fluctuations.
• EPRA net asset value per share as of Sept. 30, 2015, was 55.6 shekels ($14.2 (U.S.)) compared with 58.3 shekels per share ($14.9 (U.S.)) as of Sept. 30, 2014.
• As of Sept. 30, 2015, the group had liquid assets and unutilized revolving credit facilities in the amount of 11.0 billion shekels ($2.8-billion (U.S.)) of which 3.2 billion shekels ($820-million (U.S.)) was at the company level.
• As of Sept. 30, 2015, net debt to total assets (LTV) was 51.6 per cent, compared with 51.5 per cent as of Sept. 30, 2014.
• The company declared a quarterly cash dividend of 0.46 shekel per share payable on Dec. 29, 2015, to shareholders of record as of Dec. 15, 2015, which represents an annualized dividend per share of 1.84 shekels.

Rachel Lavine, chief executive officer of Gazit-Globe, said: "We conclude a very positive quarter with growth in both FFO and FFO per share, as well as an improvement in our operational parameters.

"After examining the various strategic opportunities available to the company, I am very positive about our business prospects and believe that together with the management team, Gazit-Globe will move forward, further developing its business and extracting more value from its operations."

Financial highlights for third quarter 2015:

• Rental income increased by 29 per cent to 1,547 million shekels compared with 1,201 million shekels in the same quarter last year. The increase is mainly due to the consolidation of Atrium's financial reports and the acquisition of Sektor.
• NOI for the quarter increased by 27 per cent to 1,066 million shekels compared with 840 million shekels in the same quarter last year. The increase is mainly due to the consolidation of Atrium's financial reports and the acquisition of Sektor.
• FFO for the quarter increased by 5 per cent to 158 million shekels, or 0.89 shekel per share, compared with 150 million shekels, or 0.85 shekel per share, in same quarter last year. Excluding the effect of exchange rate fluctuations, FFO for the quarter increased by 21 per cent and FFO per share increased by 19 per cent.
• Loss attributable to the company's shareholders totalled 92 million shekels, or 0.52 shekel per share, compared with a loss of 13 million shekels, or 0.08 shekel per share, in the same quarter last year. The loss was mainly attributable to non-recurring items relating to the reorganization in FCR, transaction costs in CTY, mortgage prepayment penalty in ProMed and losses relating to the construction activity in Dori construction.
• Occupancy rate as of Sept. 30, 2015, remained high at 95.5 per cent compared with 95.6 per cent as of Sept. 30, 2014. By region, occupancy rates as of Sept. 30, 2015, were: 94.7 per cent in Canada; 95.6 per cent in the United States; 96.7 per cent in Northern Europe; and 96.3 per cent in central and Eastern Europe.
• The net fair value of investment property and investment property under development remained stable compared with a gain of 88 million shekels in the same quarter last year.
• Shareholders' equity as of Sept. 30, 2015, totalled 7,123 million shekels, or 39.9 shekels per share, compared with 7,853 million shekels, or 44.6 shekels per share, as of Sept. 30, 2014. The decrease in shareholders' equity was mainly due to exchange rates fluctuations.
• Cash flow from operating activities totalled 673 million shekels, compared with 265 million shekels in third quarter 2014. The increase is mainly due to the consolidation of Atrium's financial reports and the acquisition of Sektor.

Financial highlights for the first nine months of 2015:

• Rental income increased by 26 per cent to 4,588 million shekels compared with 3,654 million shekels in the same period of 2014. The increase is mainly due to the consolidation of Atrium's financial reports and the acquisition of Sektor.
• NOI increased by 26 per cent to 3,137 million shekels compared with 2,489 million shekels in the same period of 2014. The increase was mainly results from the consolidation of Atrium's financial reports and the acquisition of Sektor.
• Same-property NOI for the first nine months, excluding the effect of exchange rate fluctuations, decreased by 0.5 per cent, compared with same period last year as a result of an increase of 5.1 per cent in the same-property NOI from Canada, a 4.1-per-cent increase in same-property NOI from the United States, a 0.6-per-cent increase in same-property NOI from Northern Europe, and a 12.0-per-cent decrease in same-property NOI from central and Eastern Europe.
• FFO for the period increased by 4 per cent to 481 million shekels, or 2.69 shekels per share, compared with 463 million shekels, or 2.63 shekels per share, in the same period of 2014. Excluding the effect of exchange rate fluctuations, FFO for the period increased by 13 per cent and FFO per share increased by 11 per cent.
• Net income attributable to the company's shareholders totalled 414 million shekels, or 2.30 shekels per share, compared with 290 million shekels, or 1.63 shekels per share, in the same period of 2014.
• Cash flow from operating activities totalled 1,170 million shekels, compared with 722 million shekels in the same period of 2014. The increase is mainly due to the consolidation of Atrium's financial reports and the acquisition of Sektor.

Acquisition, development, redevelopment and capital-recycling activities:

• During the first nine months of 2015, the group invested 8.55 billion shekels (including the acquisition of Sektor) which included 26 income-producing properties totalling 478,000 square metres for a total amount of 7.02 billion shekels, as well as 1.53 billion shekels in development and redevelopment projects.
• As of Sept. 30, 2015, the group had eight properties under development with a gross leasable area of 191,000 square metres with a total investment of 2.3 billion shekels and 20 properties under redevelopment with a gross leasable area of 335,000 square metres with a total investment of 4.2 billion shekels. The additional cost to complete the properties under development and redevelopment totalled 2.3 billion shekels.
• Subsequent to the quarter-end, the company announced that it has reached a 5-per-cent stake in BR Malls, the leading Brazilian shopping centre company.
• Subsequent to the quarter-end, the company entered into an agreement with Gazit Israel, providing a credit facility in the amount of up to 120 million shekels for a period of 30 months, which will be provided to Dori Group and will be used to purchase the shares of Rom Geves, a private company owned by Dori Construction as well as for general corporate purposes, including a Dori Group bonds buyback.

Financing activities:

• During the first nine months of 2015, the group raised 2.3 billion shekels in equity. In addition, the group raised approximately 5.6 billion shekels through debenture offerings.
• The average nominal annual cost of debt during the first nine months of 2015 was 4.3 per cent, compared with 4.7 per cent in the first nine months of 2014.
• The company declared a quarterly cash dividend of 0.46 shekel per share payable on Dec. 29, 2015, to shareholders of record as of Dec. 15, 2015, representing an annualized dividend per share of 1.84 shekels.

                                  CONSOLIDATED STATEMENTS OF INCOME
                             (In millions of shekels, except per share)

                                            Nine months ended Sept. 30,  Three months ended Sept. 30,
                                                   2015           2014          2015            2014

Rental income                                     4,588          3,654         1,547           1,201
Property operating expenses                       1,451          1,165           481             361
Net operating rental income                       3,137          2,489         1,066             840
Revenues from sale of buildings,
land and construction work performed                940          1,014           278             411
Cost of buildings sold, land and
construction work performed                       1,022          1,278           328             427
Gross (loss) from sale of buildings,
land and construction work performed                (82)          (264)          (50)            (16)
Total gross profit                                3,055          2,225         1,016             824
Fair value gain from investment property
and investment property under
development, net                                    480            354             -              88
General and administrative (expenses)              (608)          (442)         (230)           (146)
Other income                                         22              8            15               3
Other (expenses)                                   (630)           (49)         (126)            (28)
Company's share in earnings of
equity-accounted investees, net                     120            199            37              87
Operating income                                  2,439          2,295           712             828
Finance (expenses)                               (1,427)        (1,483)         (554)           (591)
Finance income                                      724            254            31              30
Income before taxes on income                     1,736          1,066           189             267
Taxes on income (tax benefit)                       110            252           (13)             66
Net income                                        1,626            814           202             201
Attributable to
Equityholders of the company                        414            290           (92)            (13)
Non-controlling interests                         1,212            524           294             214
                                                  1,626            814           202             201
Net earnings (loss) per share
attributable to equityholders of the
company
Basic net earnings (loss)                          2.32           1.65         (0.52)          (0.08)
Diluted net earnings (loss)                        2.30           1.63         (0.52)          (0.08)

We seek Safe Harbor.