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A view of the skylight at Brookfield Place in Toronto.

© Jumanah El-Heloueh / Reuters/REUTERS

Brookfield Office Properties Inc. , says fourth quarter net income fell nearly 75 per cent from the year-earlier, when residential properties were also included in its portfolio.

The subsidiary of Toronto's Brookfield Asset Management said Friday net income attributable to shareholders was $338-million 58 cents per share, down from $971-million or $1.70 per share in the fourth quarter of 2010.

Funds from operations —net income before taxes, fair value adjustments and other non-cash charges — rose to $151-million or 26 cents per share during the quarter, from $136-million or 25 cents per share.

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Net operating income — the measure the company prefers to use — rose to $305-million from $203-million in the quarter a year earlier.

However, operating expenses also rose to $321-million from $257-million in the quarter of 2010.

Brookfield also booked a loss of $4-million during the quarter for discontinued operations compared to a $38-million gain in the 2010 quarter.

Fair value gains shrank to $302-million from $582-million in the 2010 period.

For the full year, net income was $1.69-billion or $2.92 per share, compared with $1.55-billion or $2.73 per diluted share in 2010.

Funds from operations were up to $605-million or $1.08 per share, from $514-million or 94 cents per share in 2010 on a comparable basis as the company split residential and commercial holdings early in 2011.

"We have built a strong foundation in 2011 upon which to grow, not only through our leasing achievements but through various capital initiatives and preparations to launch selective developments," said Ric Clark, chief executive officer of Brookfield Office Properties.

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Brookfield also said it expects 2012 funds from operations to be in the range of $613-million to $637-million or $1.07 to $1.12 per share.

It expects an increase in occupancy rates from 93.2 per cent to 94 per cent and growth in same property net operating income of about 1.5 per cent.

Brookfield Office Properties Canada owns interests in 28 office properties in the downtown cores of Toronto, Calgary, Ottawa and Vancouver including Brookfield Place in Toronto and Bankers Hall in Calgary.

Brookfield Office Properties Inc., based in New York, has a total of 110 properties in several countries including the Canadian real-estate held through its publicly traded subsidiary.

Both companies are part of the group headed by Brookfield Asset Management Inc., a Canadian multinational conglomerate focused on real-estate, renewable power, natural resources and corporate financing.

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