MISSISSAUGA, ON, Aug. 2, 2017 /CNW/ - Morguard Real Estate
Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to
announce its financial results for the three and six months ended
June 30, 2017. These results
have been prepared in accordance with International Financial
Reporting Standards ("IFRS").
During the quarter ended June 30, 2017, the Trust completed
three development projects, bringing 137,000 square feet of
leasable area onstream.
All three of these projects are now generating revenue.
At Parkland Mall in Red Deer,
Alberta, the project to introduce Goodlife Fitness into the
mall completed and brought 87,500 square feet of leasable area back
onstream, including 52,000 square feet of new area. As at
June 30, 2017, this project was 86.3% occupied.
At Shoppers Mall in Brandon,
Manitoba, the Trust's $7.1
million project to remerchandise the former Safeway space
completed and brought 37,500 square feet of leasable area back
onstream. As at June 30, 2017, this area was 64.0%
occupied with an additional 22.9% committed.
At The Centre in Saskatoon,
Saskatchewan, a portion (12,000 square feet) of the former
Target Canada Corporation space is now 100.0% occupied.
The Trust's fully diluted FFO for the three months ended
June 30, 2017, was $26.0 million ($0.38 per unit) versus $38.2 million ($0.57 per unit) for the same three months ended
June 30, 2016. This represents a decrease of
$12.2 million ($0.19 per unit). Included in the fully
diluted FFO for the three months ended June
30, 2016, was the income reported from the Target
Corporation settlement of $11.2
million ($0.17 per
unit). Adjusting for this one-time activity, the decrease
quarter-over-quarter was $1.0 million
($0.02 per unit).
The new convertible debenture issue in December 2016, impacted the number of diluted
units outstanding quarter-over-quarter. The impact of the
higher number of diluted units outstanding was to decrease FFO per
unit by $0.01. The issue of
these convertible debentures also has a negative impact on interest
expense, as the Trust received an additional $25.0 million in proceeds. Interest expense
related to convertible debentures for the three months ended
June 30, 2017, was $2.4 million versus $2.1
million for the same period ended June 30, 2016.
While the convertible debenture issue negatively impacted
interest expense, as a whole, interest expense decreased during the
three months ended June 30, 2017,
versus the same period ended June 30, 2016, by $0.3 million. This was largely the result
of scheduled mortgage amortizations ($0.4
million) and increased capitalized interest ($0.2 million). Overall, interest expense
impacted fully diluted FFO by $0.01
per unit.
Net operating income for the three months ended June 30, 2017, was $39.1
million, versus $40.5 million
for the three months ended June 30,
2016. This is a decrease of $1.5
million. While the completion of the Trust's three
development projects increased net operating income $0.3 million, net operating income was negatively
impacted by the performance of the retail portfolio ($1.6 million). Overall occupancy in the
retail portfolio has decreased 3.0% since June 30, 2016.
This increased vacancy, combined with rental abatements and base
rent, at a number of the Trust's enclosed regional centres,
resulted in unfavourable net operating income.
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). The Trust presents
FFO in accordance with the Real Property Association of
Canada white paper on funds from
operations and adjusted funds from operations for IFRS issued
February 2017. FFO is a non-GAAP measure that is widely
accepted as a supplemental measure of financial performance for
real estate entities. In accordance with such white paper,
the Trust defines FFO as net income adjusted for fair value changes
on real estate properties and gains/(losses) on the sale of real
estate properties.
Financial Statements and Management's Discussion and
Analysis
The Trust's Q2 2017 Condensed Consolidated Financial Statements
and Management's Discussion and Analysis along with its 2016 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:
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Thursday, August 3,
2017 at 4:00 p.m. (ET)
|
Conference Call#:
|
647-427-7450 or
1-888-231-8191
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Conference ID#:
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47334681
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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 $3.0 billion and approximately 8.8 million square
feet of leasable space.
SOURCE Morguard Real Estate Investment Trust