SUMMARY HIGHLIGHTS FOR THE THREE AND NINE MONTH PERIODS ENDED
SEPTEMBER 30, 2020
- RESILIENT PERFORMANCE
FOR THE THREE MONTH PERIOD
ENDED SEPTEMBER 30, 2020
-
- Funds From Operations (FFO) of $0.74 per Trust Unit; an increase of 5.7%
- 1.7% same-property revenue growth
- 0.5% same-property net operating income growth
- FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2020
-
- Funds From Operations (FFO) of $2.07 per Trust Unit; an increase of 6.7%
- Excluding retirement costs, FFO of $2.14 per Trust Unit, an increase of
10.3%
- 2.9% same-property revenue growth
- 4.9% same-property net operating income growth
- SOLID OPERATIONAL RESULTS
-
- Resumption of sustainable rental rate adjustments beginning to
benefit October renewals
- Achieved occupancy of 96.6% for Q3 2020
- Rental collections remain inline with pre-COVID levels
- STRONG AND FLEXIBLE FINANCIAL POSITION
-
- Approximately $286.0 million of
liquidity
- Recently completed CMHC-insured mortgage financings at record
low interest rates between 0.97% and 1.30%
- 99% of Boardwalk's mortgages carry CMHC-insurance
- Net Asset Value of $60.85 per
trust unit, equating to approximately $180,000 per door
- STEADY EXECUTION OF LONG-TERM STRATEGY TO GEOGRAPHICALLY
EXPAND AND HIGH-GRADE PORTFOLIO
-
- Acquisition of two future development sites in prime locations
in Victoria, BC for $26.9 million
- These future developments will add an estimated 432 new rental
units in the high growth market of Victoria
- Sale of non-core 72-unit walk-up community in Regina at a price inline with the Trust's fair
value of the asset
- CONTINUE TO PROVIDE OUR ESSENTIAL SERVICE OF SAFE AND
AFFORDABLE HOUSING THROUGH THE COVID-19 PANDEMIC
-
- Health and safety of our Resident Members and our Associates
remains Boardwalk's top-priority
- DISTRIBUTION OF $1.00 PER
TRUST UNIT ON AN ANNUALIZED BASIS CONFIRMED FOR THE MONTHS OF
NOVEMBER, DECEMBER 2020 AND
JANUARY 2021
CALGARY, AB, Nov. 12, 2020 /PRNewswire/ - Boardwalk Real
Estate Investment Trust (TSX: BEI.UN)
Boardwalk Real Estate Investment Trust ("Boardwalk", the "REIT"
or the "Trust") today announced its financial results for the third
quarter of 2020.
Sam Kolias, Chairman and Chief
Executive Officer of Boardwalk REIT commented: "Grounded on some of
the most affordable rents in Canada and through competitive market
conditions, Boardwalk has continued to outperform. Boardwalk's
third quarter results are a reflection of both the resilience of
the multifamily sector and Boardwalk's competitive advantage in
providing the best product quality, service, and experience to our
resident members. Our performance-focused team, and investment in
our communities through previous competitive conditions experienced
over the last five years in our Western Canadian markets has
allowed the Trust to continue to excel through these unprecedented
times.
Boardwalk's focus has been on increasing retention and with many
of our lease renewals negotiated 30-90 days in advance of lease
expiration, our third quarter results saw limited benefit from the
lifting of rental rate restrictions in August of this year. With
restrictions lifted, Boardwalk's team is seeing success in
negotiating small sustainable rental rate adjustments on renewal,
while aiming to maintain high occupancy through the winter months.
The Trust anticipates this approach to provide steady growth and
recovery of increased non-controllable expenses through the
remainder of the year.
Unchanged since the beginning of the pandemic, Boardwalk's top
priority remains the health and safety of both our Resident Members
as well as Boardwalk's Team of Heroes who everyday are innovating,
performing and delivering our essential service of safe and
affordable housing. Boardwalk's diverse brand and affordable
product offering has allowed the Trust to exceed expectations.
Current record low CMHC insured mortgage rates, with recently
completed mortgage renewals of between 0.97% and 1.30% for four and
five year terms, respectively, are significantly reducing our
interest expense on mortgage maturities which averages 2.66% as of
the end of September. Boardwalk remains in a strong and flexible
financial position to capitalize on opportunities that may arise,
and with our operational focus is well positioned to continue
delivering resilient and sustainable results for all of our
stakeholders on the foundation of strong affordability within our
portfolio of communities across Canada where love always lives™."
THIRD QUARTER & NINE MONTHS FINANCIAL HIGHLIGHTS
|
$ millions, except
per unit amounts
|
Highlights of the
Trust's Third Quarter 2020 Financial Results
|
|
3 Months Sep
30, 2020
|
3 Months Sep
30, 2019
|
%
Change
|
9 Months Sep
30, 2020
|
9 Months Sep
30, 2019
|
%
Change
|
Operational
Highlights
|
|
|
|
|
|
|
|
|
Total Rental
Revenue
|
$
|
116.2
|
$
|
114.7
|
1.3%
|
$
|
349.0
|
$
|
339.9
|
2.7%
|
Same Property Total
Rental Revenue *
|
$
|
114.1
|
$
|
112.2
|
1.7%
|
$
|
342.2
|
$
|
332.5
|
2.9%
|
Net Operating Income
(NOI)
|
$
|
68.2
|
$
|
67.9
|
0.4%
|
$
|
203.4
|
$
|
194.0
|
4.8%
|
Same Property NOI
*
|
$
|
68.3
|
$
|
68.0
|
0.5%
|
$
|
204.1
|
$
|
194.4
|
4.9%
|
Operating
Margin
|
|
58.7%
|
|
59.2%
|
|
|
58.3%
|
|
57.1%
|
|
Same Property
Operating Margin *
|
|
59.9%
|
|
60.6%
|
|
|
59.6%
|
|
58.5%
|
|
|
|
|
|
|
|
|
|
|
Financial
Highlights
|
|
|
|
|
|
|
|
|
Funds From Operations
(FFO)
|
$
|
37.8
|
$
|
35.8
|
5.6%
|
$
|
105.5
|
$
|
98.8
|
6.7%
|
Adjusted Funds From
Operations (AFFO)
|
$
|
32.7
|
$
|
29.8
|
9.7%
|
$
|
90.2
|
$
|
80.8
|
11.5%
|
(Loss) Profit for the
Period **
|
$
|
(31.4)
|
$
|
79.6
|
-139.5%
|
$
|
(8.8)
|
$
|
143.4
|
-106.2%
|
FFO per Unit
(includes $0.07 of retirement costs in YTD 2020)
|
$
|
0.74
|
$
|
0.70
|
5.7%
|
$
|
2.07
|
$
|
1.94
|
6.7%
|
AFFO per Unit
(includes $0.07 of retirement costs in YTD 2020)
|
$
|
0.64
|
$
|
0.58
|
10.3%
|
$
|
1.77
|
$
|
1.59
|
11.3%
|
|
|
|
|
|
|
|
|
|
Net Asset
Value
|
|
|
|
|
|
|
|
|
IFRS Asset Value per
Diluted Unit (Trust & LP B), period end
|
|
|
|
|
$
|
120.01
|
$
|
122.94
|
|
Debt Outstanding per
Diluted Unit, period end
|
|
|
|
|
$
|
(60.79)
|
$
|
(57.99)
|
|
Net Asset Value (NAV)
per Diluted Unit (Trust & LP B), period end
|
|
|
|
|
$
|
59.22
|
$
|
64.95
|
|
Cash per Diluted Unit
(Trust & LP B), period end
|
|
|
|
|
$
|
1.63
|
$
|
0.20
|
|
Total per Diluted
Unit (Trust & LP B), period end
|
|
|
|
|
$
|
60.85
|
$
|
65.15
|
|
|
*Same Property
figures exclude un-stabilized properties and sold
assets
|
** (Loss) Profit
for the period as defined by IFRS includes the changes in assets
and/or liabilities carried at fair value
|
|
NOI, FFO and AFFO
are widely accepted supplemental measures of the performance of a
Canadian Real Estate entity; however, they are non-GAAP financial
measures as they are not measures defined by International
Financial Reporting Standards ("IFRS"). The reconciliation of FFO,
AFFO and other financial performance measures can be found in the
Management Discussion and Analysis ("MD&A") for the three and
nine months ended September 30, 2020, under the section
titled, "Non-GAAP Measures", which is available under the Trust's
profile at www.sedar.com.
|
|
Third Quarter
Highlights (Cont'd); $ millions, except per unit
amounts
|
|
3 Months Sep
30, 2020
|
3 Months Sep
30, 2019
|
%
Change
|
9 Months Sep
30, 2020
|
9 Months Sep
30, 2019
|
%
Change
|
|
Liquidity, Debt
and Distributions
|
|
|
|
|
|
|
|
|
|
|
Cash Position, period
end
|
|
|
|
|
|
$
|
83,100
|
|
|
|
Fundings Subsequent
To End of Quarter
|
|
|
|
|
|
$
|
3,200
|
|
|
|
Line of
Credit
|
|
|
|
|
|
$
|
199,700
|
|
|
|
Total Available
Liquidity
|
|
|
|
|
|
$
|
286,000
|
|
|
|
Liquidity as a % of
Period Total Debt
|
|
|
|
|
|
|
9%
|
|
|
|
Debt (net of cash) as
a % of Reported Asset Value
|
|
|
|
|
|
|
49%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
Outstanding, period end
|
$
|
3,002,166
|
$
|
2,834,314
|
|
$
|
3,002,166
|
$
|
2,834,314
|
|
Interest Coverage
Ratio (Rolling 4 quarters)
|
|
2.78
|
|
2.74
|
|
|
2.78
|
|
2.74
|
|
|
|
|
|
|
|
|
|
|
|
|
Regular Distributions
Declared (Trust Units & LP B Units)
|
$
|
12.8
|
$
|
12.7
|
0.2%
|
$
|
38.3
|
$
|
38.2
|
0.2%
|
Regular Distributions
Declared Per Unit (Trust Units & LP B Units)
|
$
|
0.250
|
$
|
0.250
|
0.0%
|
$
|
0.751
|
$
|
0.751
|
0.0%
|
Regular Payout as a %
FFO
|
|
33.8%
|
|
35.6%
|
|
|
36.3%
|
|
38.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Stabilized Apartment
Units
|
|
|
|
|
|
|
32,682
|
|
32,769
|
|
Un-Stabilized
Units
|
|
|
|
|
|
|
786
|
|
494
|
|
Total Apartment
Units
|
|
|
|
|
|
|
33,468
|
|
33,263
|
|
SOLID OPERATIONAL RESULTS
Portfolio
Highlights for the Third Quarter of 2020
|
|
Sep-20
|
Dec-19
|
|
Sep-19
|
Average Occupancy
(Quarter Average)*
|
96.61%
|
96.19%
|
|
96.62%
|
|
|
|
|
|
|
|
Average Monthly Rent
(Period Ended)
|
$
|
1,138
|
$
|
1,132
|
$
|
1,133
|
Average Market Rent
(Period Ended)
|
$
|
1,332
|
$
|
1,341
|
$
|
1,339
|
Average Market Rent
(Period Ended), net of incentives
|
$
|
1,232
|
$
|
1,248
|
$
|
1,240
|
Average Occupied Rent
(Period Ended)
|
$
|
1,183
|
$
|
1,182
|
$
|
1,170
|
|
|
|
|
|
|
|
Loss -to-Lease
(Period Ended) ($ millions )
|
$
|
56.4
|
$
|
60.8
|
$
|
64.5
|
Loss -to-Lease
(Period Ended) ($ millions ), net of incentives
|
$
|
18.3
|
$
|
24.9
|
$
|
26.5
|
Loss -to-Lease Per
Trust Unit (Period Ended)
|
$
|
1.11
|
$
|
1.19
|
$
|
1.27
|
Loss -to-Lease Per
Trust Unit (Period Ended), net of incentives
|
$
|
0.36
|
$
|
0.49
|
$
|
0.52
|
|
|
|
|
|
*Average occupancy
is adjusted to be on a same-property basis
|
With higher property taxes and rental rate restrictions
affecting the third quarter, Boardwalk's Edmonton and Calgary portfolio saw a slight decrease in
same-property NOI of 1.7% and 4.3%, respectively, as compared to
the same period in 2019. The Trust's Ontario and Quebec markets, which represent over 25% of
the Trust's portfolios, are continuing to deliver stable results
with high occupancy, contributing significant NOI growth of 8.0%
and 8.2%, respectively, in the third quarter of 2020 compared to
the third quarter of 2019. Saskatchewan's market continues to improve
with the Trust's portfolio realizing 2.4% same property NOI growth
in the third quarter versus the same period last year.
Overall, in the third quarter, controllable expense savings
limited operating expense increase to 3.6% and when paired with
revenue growth of 1.7%, resulted in portfolio stabilized NOI growth
of 0.5%, each as compared to the same period in 2019.
Sep 30 2020 - 3
M
|
# of
Units
|
% Revenue
Growth
|
% Operating
Expense
Growth
|
% Net
Operating
Income
Growth
|
% of
NOI
|
Edmonton
|
12,906
|
0.6%
|
3.7%
|
-1.7%
|
37.1%
|
Calgary
|
5,499
|
1.1%
|
11.6%
|
-4.3%
|
19.9%
|
Red Deer
|
939
|
-0.7%
|
8.4%
|
-7.6%
|
2.3%
|
Grande
Prairie
|
645
|
1.8%
|
10.5%
|
-4.5%
|
1.6%
|
Fort
McMurray
|
352
|
-4.1%
|
-13.6%
|
2.6%
|
1.1%
|
Alberta
|
20,341
|
0.6%
|
5.4%
|
-2.8%
|
62.0%
|
Quebec
|
6,000
|
3.0%
|
-6.6%
|
8.2%
|
20.2%
|
Saskatchewan
|
3,756
|
3.1%
|
4.1%
|
2.4%
|
10.9%
|
Ontario
|
2,585
|
6.9%
|
5.5%
|
8.0%
|
6.9%
|
|
32,682
|
1.7%
|
3.6%
|
0.5%
|
100.0%
|
Sep 30 2020 - 9
M
|
# of
Units
|
% Revenue
Growth
|
% Operating
Expense
Growth
|
% Net
Operating
Income
Growth
|
% of
NOI
|
Edmonton
|
12,906
|
2.5%
|
-0.1%
|
4.7%
|
37.4%
|
Calgary
|
5,499
|
2.4%
|
2.5%
|
2.3%
|
20.6%
|
Red Deer
|
939
|
0.6%
|
6.7%
|
-4.5%
|
2.3%
|
Grande
Prairie
|
645
|
4.9%
|
12.3%
|
-1.0%
|
1.6%
|
Fort
McMurray
|
352
|
-1.7%
|
-6.1%
|
1.9%
|
1.0%
|
Alberta
|
20,341
|
2.4%
|
1.1%
|
3.4%
|
62.8%
|
Quebec
|
6,000
|
2.9%
|
-7.8%
|
9.4%
|
19.6%
|
Saskatchewan
|
3,756
|
3.6%
|
2.9%
|
4.1%
|
10.6%
|
Ontario
|
2,585
|
7.0%
|
4.4%
|
8.9%
|
7.0%
|
|
32,682
|
2.9%
|
0.1%
|
4.9%
|
100.0%
|
PROVIDING OUR ESSENTIAL SERVICE OF SAFE AND AFFORDABLE
HOUSING THROUGH COVID-19
The health, safety, and well-being of our Resident Members and
Associates remain our top priority; and as we continue to deliver
homes to our Resident Members through this pandemic, Boardwalk
remains committed to providing transparency and information to its
stakeholders:
- At the end of October 2020;
Boardwalk had collected 98.3% of its rental revenue due in October,
and is generally inline with collection levels pre-COVID
-
- Boardwalk is actively following-up with any of its Resident
Members in arrears or in need of a payment plan
- Boardwalk continues to offer flexible payment options to its
Resident Members who may require payment plans
- Boardwalk's rent collection through COVID to-date has been
strong
- Boardwalk's occupancy within its stabilized portfolio at the
beginning of October 2020 was
96.3%
STEADY EXECUTION OF GEOGRAPHIC EXPANSION AND
HIGH-GRADING
Inline with Boardwalk's long-term strategy of geographic
expansion and high grading of the portfolio, the Trust acquired two
future development sites in Victoria,
British Columbia: the Carlisle Lands in Esquimalt and Eagles Nest in View
Royal.
The Carlisle Lands site is an assembly of 12 single
family homes in the gentrifying municipality of Esquimalt and was acquired for $12.9 million. Located next to the Esquimalt Town
Square development and the Esquimalt Recreation Centre, this
development will provide new rental housing in an undersupplied
market. Boardwalk closed on this assembly on November 2, 2020 and anticipates that it will be
able to develop 185 units upon rezoning.
Eagles Nest is located in the municipality of View Royal
and is under contract for $14.0
million, conditions have been waived and closing is
scheduled for November 23, 2020. This
property is zoned for approximately 247 units and is located near
Victoria General Hospital, a large retail plaza and provides quick
access to both downtown Victoria
and Langford.
Both future development sites provide the opportunity for
Boardwalk to utilize its experience and past success in low-cost,
value enhancing, low-rise development. The timing of these and
Boardwalk's other future developments will be determined in the new
year. The Trust is excited to re-enter the high-growth,
undersupplied Victoria market in
British Columbia with Boardwalk's
brand of affordability in this future low-rise product.
Subsequent to the end of the quarter, Boardwalk has agreed to
the sale of a 72-unit, non-core low rise community in Regina, Saskatchewan for $7.5 million, inline with the Trust's fair value
of this asset. Closing is anticipated for November 16, 2020.
Q3 REGULAR MONTHLY DISTRIBUTION ANNOUNCEMENT
The Trust has confirmed its regular monthly distribution for the
months of November 2020, December 2020 and January
2021 as follows:
Month
|
Per
Unit
|
Annualized
|
Record
Date
|
Distribution
Date
|
Nov-20
|
$
|
0.0834
|
$
|
1.00
|
30-Nov-20
|
15-Dec-20
|
Dec-20
|
$
|
0.0834
|
$
|
1.00
|
31-Dec-20
|
15-Jan-21
|
Jan-21
|
$
|
0.0834
|
$
|
1.00
|
29-Jan-21
|
15-Feb-21
|
In line with Boardwalk's distribution policy of maximum
re-investment, the Trust's payout ratio remains conservative at
33.8% of Q3 2020 FFO; and 37.1% of the last 12 months FFO.
Boardwalk's regular monthly distribution provides a stable and
attractive yield for the Trust's stakeholders.
FINANCIAL AND SUPPLEMENTARY INFORMATION
Boardwalk produces quarterly financial statements, management's
discussion and analysis, and a supplemental information package
that provides detailed information regarding the Trust's activities
during the quarter. Financial and supplementary information is
available on Boardwalk's investor website at
www.bwalk.com/investors.
TELECONFERENCE ON THIRD QUARTER 2020 FINANCIAL
RESULTS
Boardwalk invites you to participate in the
teleconference that will be held to discuss these results tomorrow
morning (November 13, 2020) at
11:00 am Eastern Time. Senior
management will speak to the period's results and provide an
update. Presentation materials will be made available on
Boardwalk's investor website at www.bwalk.com/investors prior to
the call.
Teleconference: The telephone numbers for the conference
are 416-764-8650 (local/international callers) or toll-free
1-888-664-6383 (within North
America).
Note: Please provide the operator with the below Conference Call
ID or Topic when dialing in to the call.
Conference ID: 84873695
Topic: Boardwalk REIT Third Quarter Results
Webcast: Investors will be able to listen to the call and
view Boardwalk's slide presentation by visiting
www.bwalk.com/investors prior to the start of the call.
An information page will be provided for any software needed and
system requirements. The webcast and slide presentation will also
be available at:
Boardwalk REIT Third Quarter Conference Call Webcast Link
Replay: An audio recording of the teleconference will be
available on the Trust's website:
www.bwalk.com/investors
CORPORATE PROFILE
Boardwalk REIT strives to be
Canada's friendliest communities
and currently owns and operates more than 200 communities with over
33,000 residential units totaling over 28 million net rentable
square feet. Boardwalk's principal objectives are to provide its
Residents with the best quality communities and superior customer
service, while providing Unitholders with sustainable monthly cash
distributions, and increase the value of its trust units through
selective acquisitions, dispositions, development, and effective
management of its residential multi-family communities. Boardwalk
REIT is vertically integrated and is Canada's leading owner/operator of
multi-family communities bringing Residents home to properties
located in Alberta, Saskatchewan, Ontario, and Quebec.
Boardwalk REIT's Trust units are listed on the Toronto Stock
Exchange, trading under the symbol BEI.UN. Additional information
about Boardwalk REIT can be found on the Trust's website at
www.bwalk.com/investors.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING
STATEMENTS
Information in this news release that is not current or
historical factual information may constitute forward-looking
statements and information (collectively, "forward-looking
statements") within the meaning of securities laws. Implicit in
these forward-looking statements, particularly in respect of
Boardwalk's objectives for 2020 and future periods, Boardwalk's
strategies to achieve those objectives, as well as statements with
respect to management's beliefs, plans, estimates and intentions,
and similar statements concerning anticipated future events,
results, circumstances, performance or expectations are estimates
and assumptions subject to risks and uncertainties, including those
described in the second quarter Management's Discussion &
Analysis of Boardwalk and the year-end Management's Discussion
& Analysis of Boardwalk under the heading "Risks and Risk
Management", which could cause Boardwalk's actual results to differ
materially from the forward-looking statements contained in this
news release. Specifically, Boardwalk has made assumptions
surrounding the impact of economic conditions in Canada and globally including as a result of
the COVID-19 pandemic, Boardwalk's future growth potential,
prospects and opportunities, the rental environment compared to
several years ago, relatively stable interest costs, access to
equity and debt capital markets to fund (at acceptable costs), the
future growth program to enable the Trust to refinance debts as
they mature, the availability of purchase opportunities for growth
in Canada, general industry
conditions and trends, changes in laws and regulations including,
without limitation, changes in tax laws, mortgage rules and other
temporary legislative changes in light of the COVID-19 pandemic,
increased competition, the availability of qualified personnel,
fluctuations in foreign exchange or interest rates, and stock
market volatility. These assumptions, although considered
reasonable by the Trust at the time of preparation, may prove to be
incorrect. For more exhaustive information on these risks and
uncertainties you should refer to Boardwalk's most recently filed
annual information form, which is available at www.sedar.com.
Forward-looking statements contained in this news release is based
on Boardwalk's current estimates, expectations and projections,
which Boardwalk believes are reasonable as of the current date. You
should not place undue importance on forward-looking statements and
should not rely upon forward-looking statements as of any other
date. Except as required by applicable law, Boardwalk undertakes no
obligation to publicly update or revise any forward-looking
statement, whether a result of new information, future events, or
otherwise.
View original
content:http://www.prnewswire.com/news-releases/grounded-on-some-of-the-most-affordable-rents-in-canada-boardwalk-reit-reports-resilient-results-with-third-quarter-funds-from-operations-per-unit-growth-of-5-7-301172402.html
SOURCE Boardwalk Real Estate Investment Trust