TORONTO, Aug. 08, 2018 (GLOBE NEWSWIRE) --
Partners Real Estate Investment Trust (the “REIT,” or “Partners”) (TSX: PAR.UN) today announced its results for the three month period ended June 30, 2018 (the “second quarter”).
SECOND QUARTER 2018 HIGHLIGHTS
- Net income of $1.8 million, an increase in earnings of $2.4 million compared to a net loss of $0.6 million in the second quarter of 2017. This increase was a result of lower fair value losses on income producing properties and reduced financing costs, partially offset by increased overhead costs that include the costs of restructuring announced during the first quarter of 2018.
- Revenue from all income producing properties for the second quarter was $12.8 million, a decrease of $0.7 million when compared to $13.5 million in the second quarter of 2017. This reduction in revenue is the result of a property sold during June 2017 and the loss of a Sears tenancy at Cornwall Square.
- Same properties NOI for the second quarter was $7.9 million, a decrease of $0.2 million when compared to the second quarter of 2017, due to the loss of the Sears tenancy in Cornwall, partially offset by contributions from the completed development activities.
- All properties NOI for the second quarter was $7.9 million, a $0.9 million decrease when compared to the second quarter of 2017, due to the sale of a property during June 2017 and the reduction discussed for same properties NOI above.
- FFO and AFFO per unit of $0.08 and $0.06, compared to $0.10 and $0.08, respectively, for the second quarter of 2017.
- ACFO payout ratio of 104.0%, compared to 80.5% for the second quarter of 2017. Excluding the impact of $0.1 million in restructuring costs, the REIT’s second quarter proforma ACFO payout ratio would have been 99.0%.
- Occupancy of 90.9% as at June 30, 2018, compared to a level of 95.3% as at December 31, 2017. The reduction to the REIT’s occupancy is due to the departure of a Sears’ tenancy at a property in Ontario.
- As at June 30, 2018, the REIT had renewed a total of 128,814 square feet, or 74%, of leases that were originally set to expire during 2018.
- Debt to gross book value was 59.5% as at June 30, 2018, a slight increase from 59.4% at the end of 2017.
- During the first quarter, the REIT announced that it is offering for sale up to 11 of its 34 properties, all located in western Canada. The Board of Trustees have determined that successful execution of this strategy would enable the REIT to raise capital on an efficient basis, and at the same time afford the opportunity to simplify the operations of the enterprise. If completed as planned, this strategy will have sourced capital at approximately those properties’ Net Asset Value, rather than at the discounted levels at which the REIT's equity units presently trade. "The sale process of the Western Canadian assets continues to progress in a satisfactory manner." stated Jane Domenico, the REIT's CEO.
- The REIT is considering various options with regard to the best use of proceeds from the anticipated successful completion of the sale of the Western Canada assets. It will also permit management to align its operations to serve a more geographically concentrated portfolio.
| As at and for the three months ended | As at and for the six months ended | |||||||||||||||
| Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2018 | Jun 30, 2017 | |||||||||||||
| Revenues from income producing properties | $ | 12,823,282 | $ | 13,482,928 | $ | 25,798,644 | $ | 27,354,211 | ||||||||
| Net income (loss) | 1,836,018 | (613,827 | ) | (447,868 | ) | 1,534,163 | ||||||||||
| Net income (loss) per unit - basic | 0.04 | (0.02 | ) | (0.01 | ) | 0.04 | ||||||||||
| NOI - same properties(1) | 7,861,816 | 8,089,809 | 15,586,421 | 15,554,521 | ||||||||||||
| NOI - all properties(1) | 7,861,818 | 8,782,442 | 15,586,421 | 16,936,358 | ||||||||||||
| FFO(1)(9) | 3,493,154 | 3,599,959 | 6,729,456 | 6,410,662 | ||||||||||||
| FFO per unit(1) | 0.08 | 0.10 | 0.15 | 0.19 | ||||||||||||
| AFFO(1) (9) | 2,548,879 | 2,762,415 | 4,866,491 | 4,763,859 | ||||||||||||
| AFFO per unit(1) | 0.06 | 0.08 | 0.11 | 0.14 | ||||||||||||
| ACFO(1) | 2,793,407 | 2,667,667 | 5,224,647 | 4,913,766 | ||||||||||||
| Distributions(2) | 2,903,771 | 2,148,765 | 5,790,824 | 4,296,135 | ||||||||||||
| Distributions per unit(2) | 0.06 | 0.06 | 0.13 | 0.13 | ||||||||||||
| ACFO distribution payout ratio(3) | 104.0 | % | 80.5 | % | 110.8 | % | 87.4 | % | ||||||||
| Cash distributions(4) | 2,652,667 | 1,702,296 | 5,293,550 | 3,280,624 | ||||||||||||
| Cash distributions per unit(4) | 0.06 | 0.05 | 0.11 | 0.10 | ||||||||||||
| As at | Jun 30, 2018 | Dec 31, 2017 | Dec 31, 2016 | |||||||||||||
| Total assets | $ | 469,240,048 | $ | 475,045,178 | $ | 514,700,205 | ||||||||||
| Total debt(5) | 280,677,204 | 283,331,535 | 354,556,805 | |||||||||||||
| Total equity | 177,546,225 | 183,347,418 | 151,508,380 | |||||||||||||
| Weighted average units outstanding - basic | 45,909,935 | 39,435,646 | 33,690,649 | |||||||||||||
| Weighted average units outstanding - diluted | 46,157,571 | 39,559,729 | 33,690,649 | |||||||||||||
| Debt-to-gross book value including debentures(5) | 59.5 | % | 59.4 | % | 68.6 | % | ||||||||||
| Debt-to-gross book value excluding debentures(5) | 59.5 | % | 57.8 | % | 57.5 | % | ||||||||||
| Interest coverage ratio(6) | 2.25 | 2.02 | 1.75 | |||||||||||||
| Debt service coverage ratio(6) | 1.33 | 1.25 | 1.14 | |||||||||||||
| Mortgages weighted average effective interest rate(7) | 4.24 | % | 4.10 | % | 4.41 | % | ||||||||||
| Portfolio occupancy(8) | 90.9 | % | 95.3 | % | 95.1 | % | ||||||||||
(1) NOI – same properties and all properties, FFO, AFFO and ACFO are non-IFRS financial measures widely used in the real estate industry. See “Part II – Performance Measurement” for further details and advisories.
(2) Represents distributions to unitholders on an accrual basis. Distributions are payable as at the end of the period in which they are declared by the Board of Trustees and are paid on or around the 15th day of the following month. Distributions per unit exclude the 3% bonus units given to participants in the Distribution Reinvestment and Optional Unit Purchase Plan.
(3) ACFO distribution payout ratio is a non-IFRS financial measure that has a standardized meaning under RealPac. It is calculated as total distributions as a percentage of ACFO (a new measure standardized by RealPac – see Part II Performance Measurement). There is no directly comparable IFRS measure.
(4) Represents distributions on a cash basis, and as such, excludes the non-cash distributions of units issued under the Distribution Reinvestment and Optional Unit Purchase Plan.
(5) Debt-to-gross book value is a non-IFRS financial measure widely used in the real estate industry. See calculation under “Debt-to-Gross Book Value” in “Part IV – Results of Operations”. Management considers debt-to-gross book value to be a valuable metric in assessing the REIT’s overall leverage. Non-IFRS measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other issuers. There is no directly comparable IFRS measure.
(6) Interest coverage ratio and debt service coverage ratio are non-IFRS financial measures widely used in the real estate industry, calculated on a rolling four-quarter basis. See definition under “Mortgages and Other Financing” in “Part IV – Results of Operations”. Management considers the interest coverage and debt service coverage ratios to be valuable metrics in assessing the REIT’s ability to make contractual payments on debt. Non-IFRS measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other issuers. There are no directly comparable IFRS measures.
(7) Represents the weighted average effective interest rate for secured debt excluding debentures and credit facilities.
(8) Portfolio occupancy is calculated as economic occupancy, not physical occupancy. A unit is considered occupied once it is committed to a lease with a minimum one-year term.
Further Information
A more detailed analysis of the REIT's financial results for the first quarter are included in the REIT's Management Discussion and Analysis and Condensed Consolidated Financial Statements, which have been filed on SEDAR and can be viewed at www.sedar.com or on the REITs' website at www.partnersreit.com.
Conference Call
Partners will host a conference call at 9:30 AM Eastern on Thursday, August 9, 2018, at which time Partners’ management will both review the financial results and discuss the REIT’s strategic outlook.
Conference Dial-In Details
Toll Free (North America): (800) 273-9672
Local: (416) 340-2219
Instant Replay Details (Available until August 16, 2018)
Toll Free (North America): 800-408-3053
Passcode: 6852358#
A recording of the conference call will also be available via Partners’ website.
About Partners REIT
Partners REIT is a real estate investment trust focused on the management of a portfolio of 34 retail and mixed-use community and neighbourhood shopping centres. These properties are located in both primary and secondary markets across British Columbia, Alberta, Manitoba, Ontario, and Quebec, and comprise a total of approximately 2.3 million square feet of leasable space.
Disclaimer
Certain statements included in this press release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect," "will" and similar expressions to the extent they relate to Partners REIT. The forward- looking statements are not historical facts but reflect Partners REIT's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including access to capital, regulatory approvals, intended acquisitions and general economic and industry conditions. Although Partners REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein.
For further information, please contact:
Partners REIT Investor Relations
1 (844) 474-9620 ext. 401
investor.relations@partnersreit.com
Partners REIT
Jane Domenico Chief Executive Officer
(416) 855-3313 ext. 401