MISSISSAUGA, ON, Oct. 31, 2018 /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, 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 September 30, 2018, was
$5.0 million versus a net loss of
$15.2 million for the three months
ended September 30, 2017.
The increase of $20.2 million is
largely the result of fair value changes. Fair value losses
for the three months ended September 30,
2018, were $16.9 million,
versus fair value losses of $38.2
million for the three months ended September 30, 2017.
Income before fair value losses and net (loss)/income from
equity-accounted investment was $22.1
million for the three months ended September 30, 2018, compared to $22.4 million for the same period ended
September 30, 2017. The decrease of $0.4 million is largely the result of a decrease
in net operating income ($0.2
million), combined with an increase in interest expense
($0.1 million) and other expenses
($0.1 million).
Net operating income was $37.2
million for the three months ended September 30, 2018, versus $37.4 million for the three months ended
September 30, 2017.
There are three components contributing to the decrease in net
operating income of $0.2
million. In the retail portfolio, increased vacancy
($1.0 million), including the impact
of vacancy tied to the Sears Canada Inc. ("Sears") space
(approximately $0.4 million),
combined with lower rental rates to reduce the retail net operating
income $1.8 million. This
negative net operating income was offset by revenue generated from
the Trust's completed development projects, which contributed an
additional $0.6 million to retail net
operating income during the three months ended September 30, 2018, compared to the same period
ended September 30, 2017. During the quarter, 136,500
square feet ("SF") of development projects started generating
revenue. Finally, the Trust's office portfolio experienced an
increase in net operating income of $1.1
million during the three months ended September 30, 2018, versus the same period ended
September 30, 2017. This favorable result was largely
due to decreased vacancy costs, coupled with $0.3 million in one-time lease cancellation fees
received in 2018, and $0.4 million in
stepped rents. During the quarter, the Trust completed over
40,000 SF of new leasing in its office portfolio.
The Trust's fully diluted FFO for the three months ended
September 30, 2018, was $24.8 million ($0.35 per unit) versus $25.3 million ($0.36 per unit) for the same three months ended
September 30, 2017. This represents a decrease of
$0.5 million ($0.01 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 53,500 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 Q3 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:
Date:
|
Thursday, November 1,
2018 at 4:00 p.m. (ET)
|
Conference Call
#:
|
416-764-8688 or
1-888-390-0546
|
Conference ID #:
|
46687123
|
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 8.6 million square
feet of leasable space.
SOURCE Morguard Real Estate Investment Trust