TORONTO, ONTARIO–(Marketwired – May 4, 2016) – Partners Real Estate Investment Trust (the “REIT,” or “Partners”) (TSX:PAR.UN) today announced its results for the three month period ended March 31, 2016 (the “first quarter”).
FIRST QUARTER 2016 HIGHLIGHTS
- Net income of $2.4 million, a significant improvement of $6.5 million when compared to a net loss of $4.1 million during the first quarter of 2015.
- Revenues from income producing properties of $14.4 million, a decrease of $0.1 million when compared to the first quarter of 2015 and a result of a slight reduction in occupancy.
- NOI of $8.4 million, a decrease of $0.1 million when compared to the first quarter of 2015.
- Occupancy of 94.2% as at March 31, 2016, a slight decrease when compared to a level of 94.6% at both December 31, 2015 and March 31, 2015.
- FFO and AFFO are $2.9 million and $2.5 million which translates to $0.09 and $0.07 per unit, respectively. FFO per unit was consistent with the first quarter of 2015, while AFFO decreased by $0.02 per unit due to an increase in the sustaining capex reserve.
- AFFO payout ratio of 84%, an increase from 67% during the first quarter of 2015.
- As at March 31, 2016, the REIT had renewed a total of 310,218 square feet of leases that were originally set to expire during 2016. This represents advance renewals of 81% of the GLA originally set to expire during 2016.
- On January 25, 2016, Partners appointed Paul Harrs to the position of Chief Operating Officer.
- On March 16, 2016, Partners announced its intention to internalize the management of its 25 properties in Ontario, Manitoba, Alberta, and British Columbia over the course of the second quarter of 2016. This internalization is expected benefit the REIT’s annual Adjusted Funds from Operations by approximately $0.5 million. The REIT also announced its intention to consolidate the management of its 11 properties in Quebec under the oversight of a single external property manager.
| As at and for the three months ended | |||||
| Mar 31, 2016 |
Mar 31, 2015 |
||||
| Revenues from income producing properties | $ | 14,403,183 | $ | 14,524,120 | |
| Net income (loss) | 2,379,145 | (4,096,321 | ) | ||
| Net income (loss) per unit – basic | 0.07 | (0.16 | ) | ||
| NOI – all property (1) | 8,345,948 | 8,492,707 | |||
| FFO(1) | 2,887,316 | 2,363,249 | |||
| FFO per unit(1) | 0.09 | 0.09 | |||
| AFFO(1) | 2,507,335 | 2,479,268 | |||
| AFFO per unit(1) | 0.07 | 0.09 | |||
| Distributions(2) | 2,114,508 | 1,666,084 | |||
| Distributions per unit(2) | 0.06 | 0.06 | |||
| Distribution payout ratio – FFO/AFFO(3) | 73% / 84% | 70% / 67% | |||
| Cash distributions(4) | 1,593,669 | 1,342,768 | |||
| Cash distributions per unit – FFO/AFFO(4) | 0.05 | 0.05 | |||
| Cash distribution payout ratio(5) | 55% / 64% | 57% / 54% | |||
| As at | Mar 31, 2016 |
Dec 31, 2015 |
Dec 31, 2014 |
|||
| Total assets | $ | 521,834,399 | $ | 520,970,422 | $ | 542,551,040 |
| Total debt(6) | 365,747,434 | 364,550,117 | 381,967,023 | |||
| Total equity | 149,668,723 | 148,888,084 | 149,036,368 | |||
| Weighted average units outstanding – basic | 33,468,666 | 27,831,288 | 26,206,391 | |||
| Debt-to-gross book value including debentures(6) | 69.7% | 69.5% | 70.0% | |||
| Debt-to-gross book value excluding debentures(6) | 58.8% | 58.6% | 54.2% | |||
| Interest coverage ratio(7) | 1.60 | 1.59 | 1.80 | |||
| Debt service coverage ratio(7) | 1.07 | 1.07 | 1.22 | |||
| Mortgages weighted average effective interest rate(8) | 4.57% | 4.57% | 4.43% | |||
| Portfolio occupancy | 94.2% | 94.6% | 94.3% | |||
- NOI – all property, FFO and AFFO are non-IFRS financial measures widely used in the real estate industry. See “Part II – Performance Measurement” for further details and advisories.
- 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 5% bonus units, or 3% bonus units for distributions with a record date after March 1, 2016, given to participants in the Distribution Reinvestment and Optional Unit Purchase Plan.
- Distribution payout ratio is a non-IFRS financial measure widely used in the real estate industry, calculated as total distributions as a percentage of FFO/AFFO. Management considers the distribution payout ratio a valuable metric to determine the sustainability of the REIT’s distribution. 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.
- 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.
- Cash distribution payout ratio is a non-IFRS financial measure widely used in the real estate industry, calculated as cash distributions as a percentage of FFO/AFFO. Management considers the cash distribution payout ratio a valuable metric to determine the sustainability of the REIT’s distribution. 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 GAAP measure.
- 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.
- 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.
- Represents the weighted average effective interest rate for secured debt excluding debentures and credit facilities.
“Partners’ results for the first quarter of 2016 demonstrates the stabilization our business,” stated Jane Domenico, the REIT’s CEO. “Despite the challenges inherent in the current Canadian retail landscape, our occupancy remained relatively consistent, which serves to highlight the strength of our property portfolio. During the current quarter, we will look to build upon this strength by completing the internalization of the property management function at our properties throughout Ontario and western Canada. We expect that this process will create a meaningful improvement in our results, and anticipate demonstrating this improvement over the balance of 2016.”
RELOCATION OF HEAD OFFICE
The REIT has completed their relocation from Barrie to Toronto. The new corporate head office is located at 36 Toronto Street, suite 1160. The Barrie office will remain a satellite office for the REIT.
Further Information
A more detailed analysis of the REIT’s financial results for the first quarter is 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 8:30 AM Eastern on May 5, 2016, at which time the REIT’s management will both review these financial results and discuss the REIT’s strategic outlook.
Conference Dial-In Details
Toll Free (North America): 866-223-7781
Local: 416-340-2216
Instant Replay Details (Available until May 12, 2016)
Toll Free (North America): 800-408-3053
Passcode: 5816770
A recording of the conference call will also be available via Partners’ website.
About Partners REIT
Partners REIT is a growth-oriented real estate investment trust focused on the expansion and management of a portfolio of 36 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 2.5 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.
