MISSISSAUGA, ON, Nov. 1, 2017 /CNW/ - Morguard Real Estate
Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to
announce its financial results for the three and nine months ended
September 30, 2017. These
results have been prepared in accordance with International
Financial Reporting Standards ("IFRS").
During the quarter ended September 30,
2017, the Trust completed five development projects,
bringing an additional 127,500 square feet of leasable area
onstream.
These projects include retail intensification at three of the
Trust's community strip centres which increase leasable area by
25,500 square feet and the remerchandising of 102,000 square feet
at two of the Trust's regional shopping centres.
All five of these projects are now generating revenue in
addition to the three projects brought onstream during the second
quarter.
The Trust's fully diluted FFO for the three months ended
September 30, 2017, was $25.3 million ($0.36 per unit) versus $26.0 million ($0.39 per unit) for the same three months ended
September 30, 2016. This represents a
decrease of $0.8 million
($0.03 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 diluted
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
September 30, 2017, was $2.4 million versus $2.1
million for the same period ended September 30, 2016.
While the convertible debenture issue negatively impacted
interest expense, as a whole, interest expense was largely
unchanged during the three months ended September 30, 2017, versus the same period ended
September 30, 2016. This was largely
the result of lower scheduled mortgage amortizations ($0.3 million).
Net operating income for the three months ended September 30, 2017, was $37.4 million, versus $38.2 million for the three months ended
September 30, 2016. This is a
decrease of $0.9 million. While the
completion of the Trust's five development projects increased net
operating income $0.8 million, net
operating income was negatively impacted by the performance of the
retail portfolio ($1.4 million).
Overall occupancy in the retail portfolio has decreased 2.0% since
September 30, 2016. This increased
vacancy, combined with rental abatements and lower base rent at a
number of the Trust's enclosed regional centres, resulted in
unfavourable net operating income.
On October 16, 2017, Sears Canada
Inc. ("Sears") announced it has received approval from the Ontario
Superior Court of Justice to proceed with a liquidation.
Sears and certain of its subsidiaries were granted an Initial Order
and protection under the Companies' Creditors Arrangement
Act on June 22, 2017. Sears
accounts for less than 1.0% of the Trust's annual revenue.
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 Q3 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
In connection with a continuous disclosure review by the Ontario
Securities Commission, the Trust has determined to revise the
disclosure presented in its MD&A in respect of the operating
and financial results of the Trust's joint venture arrangements to
present this information in accordance with its reported GAAP
financial results, thereby providing greater prominence to the GAAP
presentation while providing the information required adjust to
proportionate consolidation in later sections of the
MD&A. As a result, the Trust has included revised and
restated disclosure in its current MD&A for the interim periods
ended June 30, 2017, March 31, 2017 and the year ended December 31, 2016 as discussed in further detail
under "Basis of Presentation" in its MD&A.
Conference Call Details:
Date:
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Thursday, November 2,
2017 at 4:00 p.m. (ET)
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Conference Call#:
|
647-427-7450 or
1-888-231-8191
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Conference ID#:
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93217173
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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 48 retail, office and industrial
income producing properties in Canada with a book value of $2.9 billion and approximately 8.6 million square
feet of leasable space.
SOURCE Morguard Real Estate Investment Trust