Allied Properties Real Estate Investment Trust Announces Third-Quarter Results
November 12 2012 - 4:54PM
Marketwired Canada
Allied Properties REIT (TSX:AP.UN) today announced results for its third quarter
ended September 30, 2012. "Our results reflect the continued strength of the
urban areas of Canada's major cities," said Michael Emory, President and CEO.
"Our rental portfolio has performed well, our acquisition program has is ahead
of target and our value-creation activities have accelerated and matured
considerably. As a result, we've made very real progress in our effort to
establish the basis for above-average FFO and AFFO per unit growth in the coming
years."
The results for the third quarter are summarized below and compared to the same
quarter in 2011:
(In thousands except for per unit Q3 Q3 %
and % amounts) 2012 2011 Change Change
----------------------------------------------------------------------------
Net income 23,719 15,491 8,228 53.1%
Same-asset NOI 28,952 25,013 3,939 15.7%
Funds from operations ("FFO") 26,777 17,559 9,218 52.5%
FFO per unit (diluted) $ 0.46 $ 0.36 $ 0.10 27.8%
FFO pay-out ratio 72.4% 93.2% (20.8%)
Adjusted FFO ("AFFO") 21,614 13,152 8,462 64.3%
AFFO per unit (diluted) $ 0.37 $ 0.27 $ 0.10 37.0%
AFFO pay-out ratio 89.7% 124.4% (34.7%)
Debt ratio (% of fair value) 39.9% 44.7% (4.8%)
Interest coverage ratio 3.5:1 2.8:1 0.7:1
----------------------------------------------------------------------------
The results for the nine-month period ended September 30, 2012, are summarized
and compared to the same period in 2011:
Nine Nine
(In thousands except for per unit Months Months %
and % amounts) 2012 2011 Change Change
----------------------------------------------------------------------------
Net income 67,801 40,876 26,925 65.9%
Same-asset NOI 79,316 67,106 12,210 18.2%
Funds from operations ("FFO") 74,132 45,385 28,747 63.3%
FFO per unit (diluted) $ 1.34 $ 0.99 $ 0.35 35.4%
FFO pay-out ratio 74.1% 101.4% (27.3%)
Adjusted FFO ("AFFO") 58,277 34,489 23,788 69.0%
AFFO per unit (diluted) $ 1.05 $ 0.74 $ 0.31 41.9%
AFFO pay-out ratio 94.2% 133.4% (39.2%)
Debt ratio (% of fair value) 39.9% 44.7% (4.8%)
Interest coverage ratio 3.3:1 2.7:1 0.6:1
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Allied's financial performance measures for the third quarter and nine-month
period were up significantly from the comparable periods in 2011, reflecting
increased occupancy, portfolio-wide rental growth and accretion from
acquisitions completed in the past 18 months.
Allied leased 1.6 million square feet of space in the first three quarters of
2012. It finished the period with its rental portfolio 92% leased, 95% leased if
upgrade properties are excluded. Over the period, Allied renewed or replaced 78%
of its leases maturing in 2012, resulting in an overall increase of 10% in net
rental income per square foot from the affected space.
With over $300 million in acquisitions thus far in 2012, Allied is ahead of its
annual target. The acquisitions have been evenly spread over Allied's three
operating regions and have included a significant number of value-creation
opportunities. Allied also sold three non-core properties, one in Toronto and
two in Winnipeg, as well as an undivided 50% interest to joint-venture partners
in three Toronto properties.
Allied's value-creation activity accelerated in the first three quarters of the
year, with the addition of a large upgrade opportunity in Montreal, the
acquisition of a redevelopment project in Calgary and the advancement of four
urban intensification opportunities in Toronto. Allied also established two new
and promising avenues of growth. One was the expansion of its telcom and IT
facilities through the long-term lease of space at 250 Front Street West in
Toronto. The other was the initiation of four urban intensification joint
ventures in Toronto, the most recent being a joint venture with RioCan REIT and
Diamond Corp. to redevelop the Globe & Mail Lands.
Allied's balance sheet continued to grow and strengthen through the period. At
September 30, its weighted-average mortgage term was five years, its
weighted-average interest rate 5.1%, its debt ratio 40% and its
interest-coverage ratio 3.3:1. On August 14, Allied completed a $115 million
offering at $30 per unit, once again locking in an all-time low cost of equity.
In addition to funding future growth, Allied intends to use a portion of these
funds to retire higher-rate mortgage indebtedness as it comes due.
FFO and AFFO are not financial measures defined by International Financial
Reporting Standards ("IFRS"). Please see Allied's MD&A for a description of
these measures and their reconciliation to net income and comprehensive income
under IFRS, as presented in Allied's condensed interim consolidated financial
statements for the quarter ended September 30, 2012. These statements, together
with accompanying notes and MD&A, have been filed with SEDAR, www.sedar.com, and
are also available on Allied's web-site, www.alliedreit.com.
NOI is not a measure recognized under IFRS and does not have any standardized
meaning prescribed by IFRS. NOI is presented in this press release because
management of Allied believes that this non-IFRS measure is an important
financial performance indicator. NOI, as computed by Allied, may differ from
similar computations as reported by other similar organizations and,
accordingly, may not be comparable to NOI reported by such organizations.
This press release may contain forward-looking statements with respect to
Allied, its operations, strategy, financial performance and condition. These
statements generally can be identified by use of forward looking words such as
"may", "will", "expect", "estimate", "anticipate", intends", "believe" or
"continue" or the negative thereof or similar variations. Allied's actual
results and performance discussed herein could differ materially from those
expressed or implied by such statements. Such statements are qualified in their
entirety by the inherent risks and uncertainties surrounding future
expectations. Important factors that could cause actual results to differ
materially from expectations include, among other things, general economic and
market factors, competition, changes in government regulations and the factors
described under "Risk Factors" in the Allied's Annual Information Form which is
available at www.sedar.com. The cautionary statements qualify all
forward-looking statements attributable to Allied and persons acting on its
behalf. Unless otherwise stated, all forward-looking statements speak only as of
the date of this press release, and Allied has no obligation to update such
statements.
Allied Properties REIT is a leading owner, manager and developer of urban office
environments that enrich experience and enhance profitability for business
tenants operating in Canada's major cities. Its objectives are to provide stable
and growing cash distributions to unitholders and to maximize unitholder value
through effective management and accretive portfolio growth.
FOR FURTHER INFORMATION PLEASE CONTACT:
Allied Properties REIT
Michael R. Emory
President and Chief Executive Officer
(416) 977-9002
memory@alliedreit.com
www.alliedreit.com
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