MISSISSAUGA, ON, May 4, 2016 /CNW/ - Morguard Real Estate
Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to
announce its financial results for the three months ended
March 31, 2016 ("Q1"). These results
have been prepared in accordance with International Financial
Reporting Standards ("IFRS").
The Trust's fully diluted FFO for the three months ended
March 31, 2016 was $27.3 million or $0.41 per unit, down $1.7
million or $0.01 per unit from
the same period in 2015.
Total net operating income for the three months ended
March 31, 2016 was $41.2 million, down $2.3
million from the same period in 2015. This reduction
is partially offset by a decrease in interest expense of
$0.8 million.
The Trust's 2015 disposition program reduced NOI by $0.5 million. The exit of Target Canada
Corporation ("Target"), combined with the bankruptcy of
Everest College, negatively impacted
NOI by $0.6 million. During the
quarter, the Trust received a one-time payment of $0.1 million from Safeway at Shoppers Mall,
Brandon, MB. This payment was made to cancel their lease and
make the space available for redevelopment. This Safeway
space has now been combined with the Target and Everest College space to give the Trust 453,000 SF
for re-development and remerchandising.
The remaining same asset NOI, before lease cancellation fees and
step rent, is unfavourable $0.9
million over the same three months ended 2015.
Performance in the enclosed retail segment is down $1.3 million, offset by improved performance in
the office portfolio of $0.4
million. Reduced performance in the retail segment
derives from a combination of increased non-recoverable operating
costs due to deal restructuring/abatements, a slight increase in
vacancy and reduced percentage rent at the Trust's fashion focused
centres. The remaining reduction in NOI is the result of
reduced step rents and lease cancellation fees.
The Trust's favourable variance in interest expense is the
result of dispositions in 2015, regular amortizations and the
payout of a small number of maturing mortgages during the current
quarter. The Trust will keep these properties unleveraged in
the near term.
While NOI has been challenged by vacancy, the Trust completed in
excess of 400,000 SF of leasing during the quarter. In
addition, after adjusting for the vacancy associated with the area
under development, the Trust closed the quarter with 97% occupancy,
unchanged from the previous quarter.
The 453,000 SF of area under development provides the Trust with
the potential to increase FFO and secure a more stable and
diversified tenant base.
Highlights from Management's Discussion and Analysis
- Funds from operations ("FFO") for the three months ended
March 31, 2016 was $25.5 million, as compared to $27.2 million for the same period in 2015.
- On a per unit diluted basis, FFO for the three months ended
March 31, 2016 was $0.41, as compared to $0.42 for the same period in 2015.
- Net operating income from same assets for the three months
ended March 31, 2016, was
$40.1 million, as compared to
$41.0 million for the same period in
2015.
At March 31, 2016, 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 5.2 years, $148.0 million of 4.85% fixed-rate convertible
debentures and $14.8 million of
utilization of the operating line of credit. The Trust has a
debt to total assets ratio of 45.0%.
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 Q1 2016 Condensed Consolidated
Financial Statements and Management's Discussion and Analysis along
with its 2015 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:
|
Thursday, May 5, 2016
at 4:00 p.m. (ET)
|
Conference
Call#:
|
647-427-7450 or
1-888-231-8191
|
Conference
ID#:
|
83999970
|
About Morguard Real Estate Investment Trust
The Trust is a closed-end real estate investment trust, which
owns a diversified portfolio of 50 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