MONTREAL, Nov. 9, 2022
/CNW/ - PRO Real Estate Investment Trust ("PROREIT" or the "REIT")
(TSX:PRV.UN) today reported its financial and operating results for
the three-month period (or "third quarter" or "Q3") ended
September 30, 2022.
Third Quarter 2022 Highlights
- Property revenue up 23.0% in Q3 2022, compared to Q3 2021
- Net operating income* up 22.4% in Q3 2022, compared to
Q3 2021
- Same Property NOI* up 3.6%, compared to Q3 2021
- Net income and comprehensive income up $15.5 million in Q3 2022, compared to Q3
2021
- Fair value gains on investment properties of $11.6 million in Q3 2022 and $52.7 million year-to-date
- AFFO* increase of 21.0% in Q3 2022, compared to Q3 2021
- AFFO Payout Ratio – Basic* of 85.7% in Q3 2022 and 82.8% in Q3
2021
- Debt to Gross Book Value* of 49.8% at September 30, 2022, compared to 58.2% at same
date last year
- 85.5% of 2022 gross leasable area ("GLA") renewed at 14.9%
average spreads and 21.0% of 2023 GLA renewed at average spread of
50.3%
- Occupancy rate of 97.9% at September 30,
2022
"We achieved consistent operating results in the third
quarter, while maintaining an improved balance sheet,
highlighting the strength of our business," said Jim Beckerleg, President and CEO, PROREIT.
"The increases in almost all our key metrics is evidence that
our operating efficiency continues to improve. Notably, we continue
to generate recurring organic growth with solid Same Property NOI*
increases in our industrial segment, but also in our retail
segment, which were up 7.2% and 3.3%, respectively, in Q3.
"We are maintaining a strategic focus on the defensive aspects
of our portfolio as well as the mark to market opportunities in the
industrial sector, which now accounts for 80% of our total GLA.
Despite the increasing interest rate environment in which we
find ourselves, increasing rental rates as well as our maturing and
new leases are offsetting some upward movement in capitalization
and discount rates in our portfolio.
"Through our capital allocation reviews, risk and cost
management, we have successfully executed on the disposition of 10
non-core retail assets since the beginning of the year, which
helped us achieve our target of reducing our Debt to Gross Book
Value* below 50% in the quarter.
"We are particularly pleased with the results flowing from our
joint venture with Crestpoint Real Estate Investments Ltd. and its
affiliates in Dartmouth, Nova
Scotia. Completed during the current quarter, this accretive
transaction makes us one of the largest landlords in the local
Halifax industrial market, which
uniquely positions us to continue to capture rent growth in this
strategic location, while providing us with the flexibility to grow
further externally.
"We remain mindful of the heightened macro-economic uncertainty
and market volatility. We have $32.5
million available under our credit facilities, lower
leverage and are well-positioned and view this as a time
opportunity to focus on operating results. We will have
opportunities to perform and grow sustainably, underpinned by
financial discipline, to the benefit of all our stakeholders,"
Mr. Beckerleg concluded.
* Measures followed by the suffix "*" in this press release
are non-IFRS measures. See "Non-IFRS Measures".
Financial Results
Table 1- Financial
Highlights
(CAD $ thousands except
unit, per unit amounts and unless otherwise stated)
|
3 Months
Ended
September 30
2022
|
3 Months
Ended
September 30
2021
|
9 Months
Ended
September 30
2022
|
9 Months
Ended
September 30
2021
|
Financial data
|
|
|
|
|
Property
revenue
|
$
24,086
|
$
19,588
|
$
72,140
|
$
54,742
|
Net operating income
(NOI) (1)
|
$
14,808
|
$
12,100
|
$
43,158
|
$
32,924
|
Same Property NOI
(1)
|
$
11,072
|
$
10,686
|
$
26,279
|
$
26,132
|
Net income and
comprehensive income
|
$
19,547
|
$
4,068
|
$
78,038
|
$
16,803
|
Total assets
|
$
1,040,368
|
$ 769,085
|
$
1,040,368
|
$ 769,085
|
Debt to Gross Book
Value (1)
|
49.82 %
|
58.19 %
|
49.82 %
|
58.19 %
|
Interest Coverage Ratio
(1)
|
2.7x
|
2.7x
|
2.8x
|
2.7x
|
Debt Service Coverage
Ratio (1)
|
1.6x
|
1.6x
|
1.6x
|
1.6x
|
Debt to Annualized
Adjusted EBITDA Ratio (1)
|
9.5x
|
9.9x
|
9.9x
|
11.2x
|
Weighted average
interest rate on mortgage debt
|
3.69 %
|
3.50 %
|
3.69 %
|
3.50 %
|
Net cash flows provided
from operating activities
|
$
10,975
|
$
833
|
$
19,904
|
$
9,034
|
Funds from Operations
(FFO) (1)
|
$
6,845
|
$
6,349
|
$
22,790
|
$
15,009
|
Basic FFO per unit
(1)(2)
|
$
0.1132
|
$
0.1315
|
$
0.3770
|
$
0.3323
|
Diluted FFO per unit
(1)(2)
|
$
0.1111
|
$
0.1284
|
$
0.3703
|
$
0.3244
|
Adjusted Funds from
Operations (AFFO) (1)
|
$
7,931
|
$
6,556
|
$
23,606
|
$
17,719
|
Basic AFFO per unit
(1)(2)
|
$
0.1312
|
$
0.1358
|
$
0.3905
|
$
0.3923
|
Diluted AFFO per unit
(1)(2)
|
$
0.1287
|
$
0.1325
|
$
0.3835
|
$
0.3829
|
AFFO Payout Ratio –
Basic (1)
|
85.7 %
|
82.8 %
|
86.4 %
|
86.0 %
|
AFFO Payout Ratio –
Diluted (1)
|
87.4 %
|
84.9 %
|
88.0 %
|
88.1 %
|
(1)
|
Non‑IFRS measure. See
"Non‑IFRS Measures".
|
(2)
|
Total basic units
consist of trust units of the REIT ("Units") and Class B LP Units
(as defined herein). Total diluted units also include deferred
trust units and restricted trust units issued under the REIT's
long‑term incentive plan.
|
PROREIT owned 132 investment properties at September 30, 2022, including a 50% ownership
interest in 42 investment properties, compared to 104 properties
owned at 100% at the same time last year. Total assets amounted to
$1.04 billion at September 30, 2022, compared to $769.1 million as at September 30, 2021, an increase of $271.3 million, or 35.3%. During the
twelve-month period ended September 30,
2022, PROREIT acquired a 100% interest in 16 investment
properties, acquired a 50% interest in 21 investment properties,
sold a 50% interest in 21 investment properties and sold a 100%
interest in nine non-strategic retail properties.
For the third quarter ended September
30, 2022:
- Property revenue amounted to $24.1
million, an increase of $4.5
million, or 23.0%, compared to $19.6
million for the same prior year period, mainly driven by
incremental revenues from net acquisition activity over the last
twelve-month period.
- Same Property NOI* reached $11.1
million, an increase of $0.4
million, or 3.6%, compared to the same prior year period.
The increase was a result of increased occupancy in the industrial
and retail asset classes, contractual rent increases and high
rental rates on lease renewals in the industrial segment, partially
offset by the decrease in office occupancy in the sector in two of
our eight office segment properties. As of November 1, 2022, subsequent to quarter-end, a
new six-year term lease will provide an additional $90 thousand of gross quarterly rent once
occupied.
- Net operating income* amounted to $14.8
million, compared to $12.1
million in the same period in 2021, an increase of
$2.7 million, or 22.4%, mainly driven
by the impact of the net property acquisition activity over the
last twelve-month period.
- AFFO* totaled $7.9 million, an
increase of $1.4 million, or 21.0%,
compared to $6.6 million for the same
prior year period, mainly driven by the impact of the net
acquisition activity over the last twelve-month period.
- AFFO Payout Ratio – Basic* stood at 85.7% compared to 82.8% for
the same prior year period. This year-over-year change is mainly
due to maintenance capital expenditures, leasing costs, and general
and administrative expenses resulting from the REIT's growth,
partially offset by the impact of the net acquisition activity over
the last twelve-month period.
For the nine-month period ended September
30, 2022:
- Property revenue was $72.1
million, an increase of $17.4
million, or 31.8%, compared to the same period last year,
primarily due to incremental revenues from the net property
acquisitions completed in the twelve-month period ended
September 30, 2022.
- Same Property NOI* was $26.3
million, an increase of $0.1
million, or 0.6%, compared to the same period last year. The
increase was a result of increased occupancy in the retail asset
class, contractual rent increases and high rental rates on lease
renewals in the industrial segment, partially offset by the
decrease in office occupancy in the office sector.
- Net operating income* was $43.2
million, an increase of $10.2
million, or 31.1%, compared to the same period last year.
This increase results primarily from the favorable impact of the
net property acquisitions in the twelve-month period ended
September 30, 2022.
- AFFO* totaled $23.6 million, an
increase of $5.9 million, or 33.2%,
mainly driven by the impact of the net acquisition activity over
the last twelve-month period.
- AFFO Payout Ratio – Basic* stood at 86.4%, compared to 86.0%
for the same period last year. This change is mainly due to
maintenance capital expenditures, leasing costs, and general and
administrative expenses resulting from the REIT's growth, partially
offset by the impact of the net acquisition activity over the last
twelve-month period.
TABLE 2- Reconciliation of net operating income to net income
and comprehensive income
(CAD $
thousands)
|
|
3 Months
Ended
September 30
2022
|
3 Months
Ended
September 30
2021
|
9 Months
Ended
September 30
2022
|
9 Months
Ended
September 30
2021
|
Property
revenue
|
|
$
24,086
|
$
19,588
|
$
72,140
|
$
54,742
|
Property operating
expenses
|
|
9,278
|
7,488
|
28,982
|
21,818
|
Net operating
income(1)
|
|
14,808
|
12,100
|
43,158
|
32,924
|
General and
administrative expenses
|
|
1,274
|
1,064
|
3,800
|
3,195
|
Long‑term incentive
plan expense
|
|
(75)
|
349
|
(351)
|
2,220
|
Depreciation of
property and equipment
|
|
103
|
86
|
291
|
260
|
Amortization of
intangible assets
|
|
93
|
93
|
279
|
279
|
Interest and financing
costs
|
|
5,843
|
4,408
|
15,359
|
12,333
|
Distributions ‑ Class B
LP Units
|
|
159
|
166
|
477
|
499
|
Fair value adjustment ‑
Class B LP Units
|
|
(650)
|
(325)
|
(1,511)
|
994
|
Fair value adjustment ‑
investment properties
|
|
(11,573)
|
2,576
|
(52,707)
|
(4,541)
|
Other income
|
|
(382)
|
(664)
|
(1,521)
|
(1,782)
|
Other
expenses
|
|
195
|
279
|
730
|
967
|
Debt settlement
costs
|
|
274
|
-
|
274
|
1,697
|
Net income and comprehensive
income
|
|
$
19,547
|
$
4,068
|
$
78,038
|
$
16,803
|
(1)
Non‑IFRS measure. See "Non‑IFRS Measures".
|
For the three months ended September 30,
2022, net income and comprehensive income amounted to
$19.5 million, compared to
$4.1 million during the same prior
year period. The $15.5 million
increase mainly relates to the $14.1
million favorable impact in the non-cash fair market value
adjustment on investment properties, combined with the $2.7 million favourable impact in net operating
income, partially offset by the $1.4
million increase in interest and financing costs for the
third quarter of 2022, compared to the same prior year period.
PROREIT updated independent external appraisals for 23 properties
during the third quarter of 2022, contributing to the fair market
value gain of $11.6
million.
For the nine months ended September 30,
2022, net income and comprehensive income amounted to
$78.0 million, compared to
$16.8 million during the same prior
year period. The $61.2 million
increase mainly relates to the $57.2 million favourable impact in the
non-cash fair value adjustment on investment properties, combined
with the $10.2 million increase in
net operating income, partially offset by the $3.0 million increase in interest and financing
costs, compared to the same prior year period. During the first
nine months of 2022, PROREIT updated independent external
appraisals for 37 properties, contributing to the fair market value
gain of $52.7 million.
Solid Balance Sheet
PROREIT remains committed to steadily improving its balance
sheet, including its Debt to Gross Book Value* ratio, and its cash
position and sources of funds available. PROREIT continues to
maintain diversified debt maturities appropriate for the overall
debt level of its portfolio.
Debt to Gross Book Value* was 49.8% at September 30, 2022, down from 58.2% at the same
date last year. Weighted average interest rate on mortgage debt was
3.7% at September 30, 2022, compared
to 3.5% at the same date last year.
At September 30, 2022, PROREIT had
$32.5 million available on its credit
facility.
Portfolio Transactions
On August 5, 2022, PROREIT
announced the closing of its accretive transaction with Crestpoint
to jointly own an industrial-focused portfolio of 42 properties
located in Atlantic Canada. Under
the transaction, PROREIT and Crestpoint each acquired a 50%
interest in 21 primarily industrial properties owned by a third
party, for a total purchase price of $228.0
million (before closing costs). In conjunction with the
acquisition, PROREIT sold a 50% interest in 21 of its owned
properties to Crestpoint, having a total value of $227 million, for a total consideration to
PROREIT of $113.5 million (before
closing costs). As sole property manager for the entire portfolio,
PROREIT collects industry standard fees.
PROREIT's acquisition of the 50% interest in the 21 properties
amounted to a cost to PROREIT of approximately $114.0 million (excluding closing costs),
financed from the proceeds of a 50% interest in approximately
$148.0 million in new fixed-rate
mortgages. The $40 million balance
was satisfied with cash on hand, including cash from the proceeds
of the sale of a 50% interest in existing properties to
Crestpoint.
PROREIT's sale of a 50% interest in 21 of its currently owned
properties resulted in a consideration of approximately
$49.0 million in cash received from
Crestpoint (before closing costs), with Crestpoint also assuming a
50% interest in approximately $129.0
million of fixed-rate mortgages held by PROREIT. The
balance of the proceeds to PROREIT resulting from the sale, net of
the acquisition payment, was used to partially repay PROREIT's
credit facility.
On September 27, 2022, PROREIT
announced that it had completed the sale of a portfolio of nine
non-core retail properties for gross proceeds of $18.8 million (excluding closing costs), totaling
approximately 94,000 square feet of GLA located in Western Canada. Proceeds of the sale were used
to repay approximately $14.1 million
in related mortgages maturing in January
2023, with the balance used to partially repay a term
loan.
On November 3, 2022, subsequent to
quarter-end, PROREIT completed the sale of a non-strategic retail
property in Alberta, totaling
approximately 11,000 square feet of GLA, for gross proceeds of
$5.4 million (before closing costs).
Proceeds of the sale were used to pay out a term loan of
approximately $3.4 million, with the
balance being used for general trust purposes.
Operating Performance
At September 30, 2022, PROREIT's portfolio totaled 132
investment properties, including a 50% ownership interest in 42
investment properties, aggregating 6.5 million square feet of GLA
with a weighted average lease term of 4.2 years. The occupancy rate
of the portfolio remains strong at 97.9% as at September 30, 2022.
PROREIT continues to benefit from a solid operating environment,
with approximately 85.5% of leases maturing in 2022 renewed at a
positive average spread of 14.9%, and approximately 21.0% of leases
maturing in 2023 renewed at a positive average spread of 50.3%.
CEO Succession
On October 4, 2022, PROREIT
announced that Gordon G. Lawlor will
succeed James W. Beckerleg as
President and Chief Executive Officer of the REIT and will join the
REIT's Board of Trustees, effective April 1,
2023, at which time Mr. Beckerleg will be named Vice Chair
of the Board and Co-Founder, as part of the REIT's CEO succession
plan. Mr. Beckerleg has been President and Chief Executive Officer
and a Trustee of PROREIT since 2013. The REIT also announced that
Alison Schafer will be appointed
Chief Financial Officer and Secretary of the REIT concurrently with
these changes.
Distributions
Distributions to unitholders of $0.0375 per trust unit of the REIT were declared
monthly during the three months ended September 30, 2022, representing distributions of
$0.45 per unit on an annual
basis. Equivalent distributions are paid on the Class B limited
partnership units of PRO REIT Limited Partnership ("Class B LP
Units"), a subsidiary of the REIT.
Investor Conference Call and Webcast Details
PROREIT will hold a conference call to discuss its third quarter
2022 results on November 10, 2022, at 9:00 a.m. Eastern. There will be a question
period reserved for financial analysts. To access the conference
call, please dial 888-664-6383. A recording of the call will be
available until November 17, 2022 by
dialing 888-390-0541 Access code: 503379#
The conference call will also be accessible via live webcast on
PROREIT's website at www.proreit.com or at
https://app.webinar.net/6b4MK2LJ9Yx
About PROREIT
PROREIT (TSX:PRV.UN) is an unincorporated open-ended real estate
investment trust established pursuant to a declaration of trust
under the laws of the Province of Ontario. Founded in 2013, PROREIT owns a
portfolio of high-quality commercial real estate properties in
Canada, with a strong industrial
focus in robust secondary markets.
Non-IFRS Measures
PROREIT's consolidated financial statements are prepared in
accordance with International Reporting Standards ("IFRS"), as
issued by the International Accounting Standards Board. In addition
to reported IFRS measures, industry practice is to evaluate real
estate entities giving consideration, in part, to certain non-IFRS
financial measures, non-IFRS ratios and other specified financial
measures (collectively, "non-IFRS measures"). Without limitation,
measures followed by the suffix "*" in this press release are
non-IFRS measures.
As a complement to results provided in accordance with IFRS,
PROREIT discloses and discusses in this press release (i) certain
non-IFRS financial measures, including: adjusted earnings before
interest, tax, depreciation and amortization ("Adjusted EBITDA");
annualized adjusted earnings before interest, tax, depreciation and
amortization ("Annualized Adjusted EBITDA"); adjusted funds from
operations ("AFFO"); funds from operations ("FFO"); gross book
value ("Gross Book Value"); net operating income ("NOI"); Same
Property NOI; and (ii) certain non-IFRS ratios, including: AFFO
Payout Ratio – Basic; AFFO Payout Ratio – Diluted; Basic AFFO per
Unit; Diluted AFFO per Unit; Basic FFO per Unit; Diluted FFO per
Unit; Debt to Gross Book Value; Debt Service Coverage Ratio;
Interest Coverage Ratio; Debt to Annualized Adjusted EBTIDA Ratio.
These non-IFRS measures are not defined by IFRS and do not have a
standardized meaning under IFRS. PROREIT's method of calculating
these non-IFRS measures may differ from other issuers and may not
be comparable with similar measures presented by other income
trusts. PROREIT has presented such non-IFRS measures and ratios as
management believes they are relevant measures of PROREIT's
underlying operating and financial performance. For information on
the most directly comparable IFRS measures, composition of the
non-IFRS measures, a description of how PROREIT uses these measures
and an explanation of how these measures provide useful information
to investors, refer to the "Non-IFRS Measures" section of PROREIT's
management's discussion and analysis for the three months ended
September 30, 2022, dated
November 9, 2022 (the "Q3 MD&A"),
available on PROREIT's SEDAR profile at www.sedar.com, which is
incorporated by reference into this press release. As applicable,
the reconciliations for each non-IFRS measure are outlined below.
Non-IFRS measures should not be considered as alternatives to net
income, cash flows provided by operating activities, cash and cash
equivalents, total assets, total equity, or comparable metrics
determined in accordance with IFRS as indicators of PROREIT's
performance, liquidity, cash flow, and profitability.
Reconciliation of Same Property NOI to net operating income
(as reported in the consolidated financial statements)
(CAD $
thousands)
|
3 Months
Ended
September 30
2022
|
3 Months
Ended
September 30
2021
|
9 Months
Ended
September 30
2022
|
9 Months
Ended
September 30
2021
|
Property
revenue
|
$
24,086
|
$
19,588
|
$
72,140
|
$
54,742
|
Property operating
expenses
|
9,278
|
7,488
|
28,982
|
21,818
|
NOI (net operating
income) as reported in the financial statements
(1)
|
14,808
|
12,100
|
43,158
|
32,924
|
Straight-line rent
adjustment
|
(21)
|
(129)
|
(244)
|
(374)
|
NOI after
straight-line rent adjustment (1)
|
14,787
|
11,971
|
42,914
|
32,550
|
|
|
|
|
|
NOI (1)
sourced from:
|
|
|
|
|
Acquisitions
|
(3,329)
|
(799)
|
(15,432)
|
(4,684)
|
Dispositions
|
(386)
|
(486)
|
(1,203)
|
(1,734)
|
Same Property NOI
(1)
|
$
11,072
|
$
10,686
|
$
26,279
|
$
26,132
|
Number of same properties
|
89
|
89
|
71
|
71
|
(1) Non-IFRS
measure. See "Non‑IFRS Measures".
|
The following is the Same Property NOI by asset class for the
three and nine month periods ended September
30, 2022 and 2021:
(CAD $
thousands)
|
3 Months
Ended
September 30
2022
|
3 Months
Ended
September 30
2021
|
9 Months
Ended
September 30
2022
|
9 Months
Ended
September 30
2021
|
Industrial
|
$
6,741
|
$
6,288
|
$
13,763
|
$
13,159
|
Retail
|
3,122
|
3,021
|
9,123
|
8,821
|
Office
|
1,209
|
1,377
|
3,393
|
4,152
|
Same Property NOI
(1)
|
$
11,072
|
$
10,686
|
$
26,279
|
$
26,132
|
(1)
|
Non‑IFRS measure. See
"Non‑IFRS Measures".
|
(2)
|
As of January 1, 2022,
the REIT reclassified one of its Office assets to Industrial assets
to be more consistent with the asset's use. The comparative period
has been updated to reflect this adjustment.
|
Reconciliation of AFFO and FFO to net income and
comprehensive income
(CAD $ thousands except
unit, per unit amounts and unless otherwise stated)
|
3 Months
Ended
September 30
2022
|
3 Months
Ended
September 30
2021
|
9 Months
Ended
September 30
2022
|
9 Months
Ended
September 30
2021
|
Net income and comprehensive income for the
period
|
$
19,547
|
$
4,068
|
$
78,038
|
$
16,803
|
Add:
|
|
|
|
|
Long‑term incentive
plan
|
(731)
|
(229)
|
(1,786)
|
975
|
Distributions ‑ Class B
LP Units
|
159
|
166
|
477
|
499
|
Fair value adjustment ‑
investment properties
|
(11,573)
|
2,576
|
(52,707)
|
(4,541)
|
Fair value adjustment ‑
Class B LP Units
|
(650)
|
(325)
|
(1,511)
|
994
|
Amortization of
intangible assets
|
93
|
93
|
279
|
279
|
FFO (1)
|
$
6,845
|
$
6,349
|
$
22,790
|
$
15,009
|
Deduct:
|
|
|
|
|
Straight‑line rent
adjustment
|
$
(21)
|
$
(129)
|
$
(244)
|
$
(374)
|
Maintenance capital
expenditures
|
(282)
|
(335)
|
(793)
|
(521)
|
Stabilized leasing
costs
|
(387)
|
(220)
|
(1,225)
|
(626)
|
Add:
|
|
|
|
|
Long‑term incentive
plan
|
656
|
578
|
1,435
|
1,245
|
Amortization of
financing costs
|
846
|
313
|
1,369
|
1,289
|
Debt settlement
costs
|
274
|
-
|
274
|
1,697
|
AFFO (1)
|
$
7,931
|
$
6,556
|
$
23,606
|
$
17,719
|
Basic FFO per unit
(1)(2)
|
$
0.1132
|
$
0.1315
|
$
0.3770
|
$
0.3323
|
Diluted FFO per unit
(1)(2)
|
$
0.1111
|
$
0.1284
|
$
0.3703
|
$
0.3244
|
Basic AFFO per unit
(1)(2)
|
$
0.1312
|
$
0.1358
|
$
0.3905
|
$
0.3923
|
Diluted AFFO per unit
(1)(2)
|
$
0.1287
|
$
0.1325
|
$
0.3835
|
$
0.3829
|
Distributions declared per Unit and Class B LP
unit
|
$
0.1125
|
$
0.1125
|
$
0.3375
|
$
0.3375
|
AFFO Payout Ratio – Basic
(1)
|
85.7 %
|
82.8 %
|
86.4 %
|
86.0 %
|
AFFO Payout Ratio – Diluted
(1)
|
87.4 %
|
84.9 %
|
88.0 %
|
88.1 %
|
Basic weighted average number of units
(2)(3)
|
60,447,230
|
48,287,486
|
60,447,230
|
45,169,392
|
Diluted weighted average number of units
(2)(3)
|
61,625,646
|
49,466,041
|
61,549,406
|
46,272,319
|
(1)
|
Non‑IFRS measure. See
"Non‑IFRS Measures".
|
(2)
|
FFO and AFFO per unit
is calculated as FFO or AFFO, as the case may be, divided by the
total of the weighted number of basic or diluted units, as
applicable, added to the weighted average number of Class B LP
Units outstanding during the period.
|
(3)
|
Total basic units
consist of Units and Class B LP Units. Total diluted units also
includes deferred trust units and restricted trust units issued
under the REIT's long‑term incentive plan.
|
Reconciliation of Adjusted EBITDA to net income and
comprehensive income
(CAD $
thousands)
|
3 Months
Ended
September 30
2022
|
3 Months
Ended
September 30
2021
|
9 Months
Ended
September 30
2022
|
9 Months
Ended
September 30
2021
|
Net income and
comprehensive income
|
$
19,547
|
$
4,068
|
$
78,038
|
$
16,803
|
Interest and financing
costs
|
5,843
|
4,408
|
15,359
|
12,333
|
Depreciation of
property and equipment
|
103
|
86
|
291
|
260
|
Amortization of
intangible assets
|
93
|
93
|
279
|
279
|
Fair value adjustment ‑
Class B LP Units
|
(650)
|
(325)
|
(1,511)
|
994
|
Fair value adjustment ‑
investment properties
|
(11,573)
|
2,576
|
(52,707)
|
(4,541)
|
Distributions ‑ Class B
LP Units
|
159
|
166
|
477
|
499
|
Straight‑line
rent
|
(21)
|
(129)
|
(244)
|
(374)
|
Long‑term incentive
plan expense
|
(75)
|
349
|
(351)
|
2,220
|
Debt settlement
costs
|
274
|
-
|
274
|
1,697
|
Adjusted EBITDA (1)
|
$
13,700
|
$
11,292
|
$
39,905
|
$
30,170
|
(1)
Non‑IFRS measure. See "Non‑IFRS Measures".
|
Calculation of Debt to Annualized Adjusted EBITDA
Ratio
(CAD $
thousands)
|
3 Months
Ended
September 30
2022
|
3 Months
Ended
September 30
2021
|
9 Months
Ended
September 30
2022
|
9 Months
Ended
September 30
2021
|
Debt, excluding
unamortized financing costs
|
$
492,225
|
$
420,752
|
$
492,225
|
$
420,752
|
Credit facility,
excluding unamortized financing costs
|
27,500
|
28,000
|
27,500
|
28,000
|
Total Debt and Credit
facility, excluding unamortized financing costs
|
$
519,725
|
$
448,752
|
$
519,725
|
$
448,752
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
$
13,700
|
$
11,292
|
$
39,905
|
$
30,170
|
Annualized Adjusted
EBITDA (1)
|
$
54,800
|
$
45,168
|
$
52,410
|
$
40,227
|
Debt to Annualized Adjusted EBITDA Ratio
(1)
|
9.5x
|
9.9x
|
9.9x
|
11.2x
|
(1) Non‑IFRS measure. See
"Non‑IFRS Measures".
|
Calculation of the Interest Coverage Ratio
(CAD $
thousands)
|
3 Months
Ended
September 30
2022
|
3 Months
Ended
September 30
2021
|
9 Months
Ended
September 30
2022
|
9 Months
Ended
September 30
2021
|
Adjusted EBITDA
(1)
|
$
13,700
|
$
11,292
|
$
39,905
|
$
30,170
|
Interest expense
|
$
5,020
|
$
4,112
|
$
14,006
|
$
11,073
|
Interest Coverage Ratio
(1)
|
2.7x
|
2.7x
|
2.8x
|
2.7x
|
(1) Non‑IFRS measure.
See "Non‑IFRS Measures".
|
Calculation of the Debt Service Coverage Ratio
(CAD $
thousands)
|
3 Months
Ended
September 30
2022
|
3 Months
Ended
September 30
2021
|
9 Months
Ended
September 30
2022
|
9 Months
Ended
September 30
2021
|
Adjusted EBITDA
(1)
|
$
13,700
|
$
11,292
|
$
39,905
|
$
30,170
|
Interest expense
|
5,020
|
4,112
|
14,006
|
11,073
|
Principal
repayments
|
3,352
|
2,787
|
10,507
|
7,730
|
Debt Service Requirements
|
$
8,372
|
$
6,899
|
$
24,513
|
$
18,803
|
Debt Service Coverage Ratio
(1)
|
1.6x
|
1.6x
|
1.6x
|
1.6x
|
(1) Non‑IFRS measure. See
"Non‑IFRS Measures".
|
Calculation of Gross Book Value and Debt to Gross Book
Value
(CAD $ thousands unless
otherwise stated)
|
September 30
2022
|
September 30
2021
|
Total assets, including
investment properties stated at fair value
|
$ 1,040,367
|
$
769,085
|
Accumulated
depreciation on property and equipment and intangible
assets
|
2,838
|
2,046
|
Gross Book Value
(1)
|
1,043,205
|
771,131
|
Debt, excluding
unamortized financing costs
|
492,225
|
420,752
|
Credit facility,
excluding unamortized financing costs
|
27,500
|
28,000
|
Total Debt and Credit
facility, excluding unamortized financing costs
|
$
519,725
|
$
448,752
|
Debt to Gross Book Value
(1)
|
49.82 %
|
58.19 %
|
(1) Non‑IFRS measure. See
"Non‑IFRS Measures".
|
Forward-Looking Statements
This press release contains forward-looking statements and
forward-looking information (collectively, "forward-looking
statements") within the meaning of applicable securities
legislation, including statements relating to certain expectations,
projections, growth plans and other information related to REIT's
business strategy and future plans. Forward-looking statements are
based on a number of assumptions and are subject to a number of
risks and uncertainties, many of which are beyond PROREIT's
control, that could cause actual results and events to differ
materially from those that are disclosed in or implied by such
forward-looking statements.
Forward-looking statements contained in this press release
include, without limitation, statements pertaining to the execution
by PROREIT of its growth strategy and the future financial and
operating performance of PROREIT. PROREIT's objectives and
forward-looking statements are based on certain assumptions,
including that (i) PROREIT will receive financing on favourable
terms; (ii) the future level of indebtedness of PROREIT and its
future growth potential will remain consistent with the REIT's
current expectations; (iii) there will be no changes to tax laws
adversely affecting PROREIT's financing capacity or operations;
(iv) the impact of the current economic climate and the current
global financial conditions on PROREIT's operations, including its
financing capacity and asset value, will remain consistent with
PROREIT's current expectations; (v) the performance of PROREIT's
investments in Canada will proceed
on a basis consistent with PROREIT's current expectations; and (vi)
capital markets will provide PROREIT with readily available access
to equity and/or debt.
The forward-looking statements contained in this news release
are expressly qualified in their entirety by this cautionary
statement. All forward-looking statements in this press release are
made as of the date of this press release. PROREIT does not
undertake to update any such forward-looking information whether as
a result of new information, future events or otherwise, except as
required by law.
Additional information about these assumptions and risks and
uncertainties is contained under "Risk Factors" in PROREIT's latest
annual information form and "Risk and Uncertainties" in PROREIT's
management's discussion and analysis for the three months ended
September 30, 2022, which are
available under PROREIT's profile on SEDAR at www.sedar.com.
SOURCE PROREIT