MISSISSAUGA, ON, Feb. 17, 2016 /CNW/ - Morguard Real Estate
Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to
announce its 2015 annual financial results. These results have been
prepared in accordance with International Financial Reporting
Standards ("IFRS").
The Trust's fully diluted FFO for the three months ended
December 31, 2015 of $0.45 is up $0.01
from the same period ended 2014. The Trust's fully diluted
FFO for the year ended December 31,
2015 of $1.67 is unchanged
from the same year ended 2014.
During the quarter the Trust benefited from reduced interest
expense of $0.5 million and reduced
general and administrative expense of the same amount. These
reductions were sufficient to offset a decrease in net operating
income of $0.4 million and a decrease
in other income of $0.1 million.
Lower interest expense is largely the result of properties sold
during the year and regular amortizations on outstanding
mortgages. The reduction in general and administrative
expense derives from additional compensation costs in 2014 compared
to the same three months ended 2015.
The Trust's net operating income continued to be challenged by
the exit of Target Canada Corporation ("Target") from Canada ($0.8
million) and the bankruptcy of Everest
College ($0.2 million).
During the quarter the Trust made a strategic decision to redevelop
the former Target space at Cambridge Centre, The Centre @ Circle
& 8th, Brandon Shoppers Mall and Prairie Mall, as well as the
former Everest College space at St. Laurent Centre. The Trust
now classifies these spaces as under development.
After adjusting net operating income for the space under
development as well as other one-time non-recurring items, net
operating income for the three months ended December 31, 2015 was $43.3 million which is up $0.7 million from the same period ended
2014. Increases in the Trust's same asset net operating
income ($1.2 million) and properties
under development ($0.1 million) were
offset by decreases to net operating income due to dispositions
($0.6 million).
The favourable result in same asset net operating income was
largely due to improved performance within the enclosed regional
centres as a result of operating efficiencies. The
recognition of these efficiencies in the fourth quarter allowed the
Trust to accelerate the recovery of capital expenditures made in
previous quarters.
Occupancy levels improved during the quarter (excluding the area
under development) with the Trust completing over 278,000 square
feet of leasing.
The Trust's ability to close the year ended December 31, 2015 with fully diluted FFO equal to
the same period ended December 31,
2014 demonstrates its strength. The challenges
provided by Target and Everest College
were overcome through a determined effort to improve operating
efficiencies which have allowed for the accelerated recovery of
capital expenditures and improvements in same asset net operating
income. A strategic disposition program brought in additional
funds ($29.6 million), which the
Trust used to repurchase just over 1.3 million units ($20.0 million) and complete the revitalization
project at St. Laurent Centre. As at December 31, 2015 the Trust had $26.3 million of cash available to:
repurchase additional units, reinvest in the development projects
or reduce debt levels.
Highlights from Management's Discussion and Analysis
- Funds from operations ("FFO") for the three months and the year
ended December 31, 2015 was
$28.7 million and $106.4 million, respectively, as compared to
$28.2 million and $106.5 million, respectively, for the same
periods in 2014.
- On a per unit diluted basis, FFO for the three months and the
year ended December 31, 2015 was
$0.45 and $1.67, respectively, as compared to $0.44 and $1.67,
respectively, for the same periods in 2014.
- Net operating income from same assets for the three months and
the year ended December 31, 2015, was
$42.7 million and $163.6 million, respectively, as compared to
$41.5 million and $162.5 million, respectively, for the same
periods in 2014.
- Acquisitions of Citadel West and 301 Laurier Avenue in 2014 add
$0.1 million and $0.8 million, respectively, to net operating
income for the three months and the year ended December 31, 2015.
- Dispositions of 5591-5631 Finch and 20-24 Lesmill completed in
the second quarter of 2015, 350 Sparks and 361 Queen in
February 2015 and Cedar Pointe
Business Park in July 2014, reduces
net operating income by $0.6 million
and $3.2 million, respectively,
during the three months and the year ended December 31, 2015.
At December 31, 2015, the Trust's
debt consisted of $1.2 billion of
fixed-rate debt with weighted average interest rate of 4.1% and
weighted average term to maturity of 5.3 years and $147.7 million of 4.85% fixed-rate convertible
debentures. The Trust has a debt to total assets ratio of
45.7%.
Net Operating Income, Funds from Operations
This press release and accompanying financial information make
reference to net operating income and funds from operations on a
total and per unit basis. Net operating income is defined as
income from property operations after operating expenses have been
deducted, but prior to deducting interest expense, general and
administrative expenses and fair value gains/(losses). Funds
from operations is defined as net income prior to extraordinary
items, valuation adjustments, and certain other non-cash items, if
any. Funds from operations is not a term defined under IFRS
and may not be comparable to similar measures used by other Trusts.
Financial Statements and Management's Discussion and
Analysis
The Trust's 2015 Consolidated Financial Statements and
Management's Discussion and Analysis along with its 2014 Annual
Report are available on the Trust's website at www.morguard.com and
have been filed with SEDAR at www.sedar.com
Conference Call Details:
Date:
|
February 18, 2016 at
4:00 p.m. (ET)
|
Conference
Call#:
|
647-427-7450 or
1-888-231-8191
|
Conference
ID#:
|
34507496
|
About Morguard Real Estate Investment Trust
The Trust is a closed-end real estate investment trust, which
owns a diversified portfolio of 49 retail, office and industrial
income producing properties in Canada with a book value of $2.9 billion and approximately 8.8 million square
feet of leasable space.
SOURCE Morguard Real Estate Investment Trust