MISSISSAUGA, ON, Aug. 1, 2018 /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, 2018. These results
have been prepared in accordance with International Financial
Reporting Standards ("IFRS").
The Trust's net income and comprehensive income for the three
months ended June 30, 2018, was
$43.4 million versus $52.4 million for the three months ended
June 30, 2017.
The decrease of $9.0 million is
largely the result of fair value changes. Fair value gains
for the three months ended June 30,
2018, were $22.1 million,
versus an overall gain of $28.2
million for the three months ended June 30, 2017.
Income before fair value gains and net income from
equity-accounted investment was $22.0
million for the three months ended June 30, 2018, compared to $23.2 million for the same period ended
June 30, 2017. The decrease of $1.3 million is largely the result of a decrease
in net operating income.
Net operating income was $36.9
million for the three months ended June 30, 2018, versus $38.0 million for the three months ended
June 30, 2017.
The decrease in net operating income of $1.1 million is largely the result of increased
vacancy and lower base rents in the Trust's office and retail
portfolios. In the retail portfolio, increased vacancy,
including the impact of vacancy tied to the Sears Canada Inc. space
(approximately $0.4 million), and
reduced rental rates were partially offset by increased revenue
from the Trust's development program. Since January 1, 2017, 303,700 square feet of
development activity became income producing. These projects
contributed $1.4 million to revenue
in the second quarter, an increase of $1.0
million from the second quarter of 2017.
The Trust's fully diluted funds from operations ("FFO") for the
three months ended June 30, 2018, was
$24.8 million ($0.36 per unit) versus $26.0 million ($0.38 per unit) for the same three months ended
June 30, 2017. This represents a decrease of
$1.2 million ($0.02 per unit). The decrease in FFO is
largely attributed to the decrease in net operating income.
The Trust continues with its development program and expects an
additional 197,500 square feet of new area under intensification
and remerchandised area to become income producing by the end of
2018. The Trust has secured commitments on 79% of the
remerchandised area and 57% of the area under intensification.
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 2018. 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 2018 Condensed Consolidated Financial Statements
and Management's Discussion and Analysis along with its 2017 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:
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Date:
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Thursday, August 2,
2018 at 4:00 p.m. (ET)
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Conference Call
#:
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416-764-8688 or
1-888-390-0546
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Conference ID
#:
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61098862
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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 8.4 million square
feet of leasable space.
SOURCE Morguard Real Estate Investment Trust