TORONTO and MONTREAL, March 15,
2018 /CNW/ - NEXUS Real Estate Investment Trust (the "REIT")
(TSXV: NXR.UN) announced today its results for the fourth quarter
and year ended December 31, 2017 and
the declaration of the March 2018
distribution.
Highlights
- Net income for the year of $15,688,792, up 50% as compared to 2016 net
income of $10,478,291.
- Total assets increased $273,918,822 or 156% as compared to December 31, 2016, primarily as a result of
accretive acquisitions completed in the year, and fair value
increases of investment property.
- Normalized AFFO per unit for the year increased 8.4% as
compared to 2016 AFFO per unit. AFFO per unit for the quarter of
$0.048 is 6.2% higher than AFFO per
unit of the same quarter of 2016.
- Normalized AFFO payout ratio for the year of 83% is down from
89.1% for the year ended December 31,
2016.
- Conservative debt to total assets ratio of 54%.
- Sandalwood acquisition continues to deliver strong results;
space early terminated in the third quarter was fully leased on
favourable terms subsequent to year end.
- Management of the REIT will host a conference call on
Friday March 16th at
1PM EST to review results and
operations.
"2017 was a transformational year for the REIT. With the
completion of the Nobel merger in April and the purchase of the
Sandalwood portfolio in July, the REIT more than doubled its assets
and market capitalization while continuing to grow our AFFO per
unit." commented Kelly Hanczyk, the
REIT's Chief Executive Officer. "Since the inception of the REIT in
January 2014, we have consistently
reduced our AFFO payout ratio, conservatively managed our debt to
total assets ratio and have proven to be a stable long-term
investment for our unitholders. We have fully integrated both
transactions and are excited about the next phase of our growth. We
will begin to recycle capital and execute on off market
transactions in the very near future, continuing to grow our AFFO
per unit."
Summary of Results
Included in the tables that follow and elsewhere in this news
release are non-IFRS measures that should not be construed as an
alternative to net income / loss, cash from operating activities or
other measures of financial performance calculated in accordance
with IFRS, and may not be comparable to similar measures as
reported by other issuers. Readers are encouraged to refer to the
REIT's MD&A for further discussion of the non-IFRS measures
presented.
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|
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Three months
ended
December
31,
|
Year
ended
December
31,
|
|
2017
|
2016
|
2017
|
2016
|
|
Financial
Results
|
$
|
$
|
$
|
$
|
|
Property
revenue
|
13,135,687
|
3,989,359
|
36,999,083
|
15,407,328
|
|
Net operating
income
|
8,161,267
|
3,341,920
|
25,139,568
|
12,822,691
|
|
Net income
|
12,302,915
|
5,694,279
|
15,688,792
|
10,478,291
|
|
Net income excluding
transaction costs, fair value adjustments, and bargain purchase
gain
|
5,059,897
|
1,800,690
|
15,496,518
|
7,182,350
|
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Three months
ended
December
31,
|
Year
ended
December
31,
|
|
2017
|
2016
|
2017
|
2016
|
|
Financial
Highlights
|
$
|
$
|
$
|
$
|
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FFO
(1)
|
5,353,520
|
2,042,133
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16,066,532
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8,099,254
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Normalized FFO
(1) (4)
|
5,353,520
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2,042,133
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16,066,532
|
7,842,726
|
|
AFFO
(1)
|
4,548,657
|
1,893,760
|
14,168,344
|
7,574,295
|
|
Normalized AFFO
(1) (4)
|
4,548,657
|
1,893,760
|
14,168,344
|
7,317,767
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Distributions
declared (2)
|
3,768,425
|
1,668,306
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12,203,008
|
6,522,392
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|
Weighted average
units outstanding - basic (3)
|
94,213,235
|
41,668,244
|
72,657,067
|
40,669,109
|
|
Weighted average
units outstanding - diluted (3)
|
94,277,656
|
41,668,244
|
72,739,276
|
40,669,109
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Distributions per
unit, basic and diluted (2) (3)
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0.040
|
0.040
|
0.168
|
0.160
|
|
FFO per unit, basic
and diluted (1) (3)
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0.057
|
0.049
|
0.221
|
0.199
|
|
Normalized FFO per
unit, basic (1) (3) (4)
|
0.057
|
0.049
|
0.221
|
0.193
|
|
AFFO per unit, basic
and diluted (1) (3)
|
0.048
|
0.045
|
0.195
|
0.186
|
|
Normalized AFFO per
unit, basic and diluted (1) (3) (4)
|
0.048
|
0.045
|
0.195
|
0.180
|
|
Normalized AFFO
payout ratio, basic(1) (2) (4) (5)
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82.8%
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88.1%
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83.0%
|
89.1%
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Debt to total assets
ratio
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54.0%
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48.7%
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54.0%
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48.7%
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(1)
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Non-IFRS
Measure
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(2)
|
Includes
distributions payable to holders of Class B LP Units which are
accounted for as interest expense in the consolidated financial
statements.
|
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(3)
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Weighted average
number of units includes the Class B LP Units.
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(4)
|
For the year ended
December 31, 2016, FFO and AFFO include $256,528 of other income
relating to the release in the first quarter of 2016 of funds
previously held in an environmental escrow in connection with the
acquisition of ten industrial properties on January 14, 2014. This
is a one-time item which is excluded from normalized FFO and
normalized AFFO for the year ended December 31,
2016.
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(5)
|
33,350,000 REIT units
were issued on June 30, 2017 on the closing of an equity financing
and private placement. These units were eligible to receive
distributions for the month of June 2017. Normalized AFFO payout
ratio, basic and diluted, is calculated excluding $444,556 of June
2017 distributions paid on these units. Normalized AFFO Payout
Ratio for the year ended December 31, 2017 was 86.1% when
unadjusted for distributions paid on these units.
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Revenues and Results from Operations in Line with
Expectations
Net operating income for the fourth quarter of $8,161,267 was $264,807 lower than net operating income of
$8,426,074 for the third quarter. A
lease termination payment of $150,000
was received in the third quarter with respect to space that was
untenanted in the fourth quarter, combined with the impact of
seasonal costs such as utilities and snow removal. Subsequent to
year end, the terminated space was fully leased.
General and administrative expense for the quarter of
$987,470 was $286,027 higher than general and administrative
expense for the third quarter of $701,443. 2017 Annual bonuses paid to officers
and employees of the REIT in 2018 were accrued and expensed in the
fourth quarter, accounting for the increase, partially offset by
other lower expenses. It is anticipated that bonuses will be
accrued and expensed quarterly vs. annually going
forward.
Other income for the quarter of $315,717 was $189,965 higher than $125,752 for the third quarter due to
construction management fees earned in the fourth quarter.
Earnings Call
Management of the REIT will host a conference call at
1:00 PM Eastern Standard Time on
Friday March 16, 2018 to review the financial results
and operations.
To participate in the conference call, please dial 416-915-3239
or 1-800-319-4610 (toll free in Canada and the US) at least five minutes prior
to the start time and ask to join the Nexus REIT conference
call.
A recording of the conference call will be available until
April 15, 2018. To access the
recording, please dial 604-674-8052 or 1-855-669-9658 (toll free in
Canada and the US) and enter
access code 2098.
March Distribution
The REIT will make a cash distribution in the amount of
$0.01333 per unit, representing
$0.16 per unit on an annualized
basis, payable April 16, 2018 to
unitholders of record as of March 30,
2018.
The REIT's current distribution per unit continues to be
$0.01333 per month. The REIT's
distribution reinvestment program ("DRIP") entitles eligible
unitholders to elect to receive all, or a portion of the cash
distributions of the REIT reinvested in units of the REIT. Eligible
unitholders who so elect will receive a bonus distribution of units
equal to 4% of each distribution that was reinvested by them under
the DRIP.
About Nexus REIT
Nexus is a growth oriented real estate investment trust focused
on increasing unitholder value through the acquisition, ownership
and management of industrial, office and retail properties located
in primary and secondary markets in North
America. The REIT currently owns a portfolio of 62
properties comprising approximately 3.5 million square feet of
rentable area. The REIT has approximately 88,882,000 units issued
and outstanding. Additionally, there are approximately 5,440,000
Class B LP units of subsidiary limited partnerships of the REIT
issued and outstanding.
Forward Looking Statements
Certain statements contained in this news release constitute
forward-looking statements which reflect the REIT's current
expectations and projections about future results. Often, but not
always, forward-looking statements can be identified by the use of
words such as "plans", "expects" or "does not expect", "is
expected", "estimates", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or state that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the REIT to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements. Actual results and
developments are likely to differ, and may differ materially, from
those expressed or implied by the forward-looking statements
contained in this news release. Such forward-looking statements are
based on a number of assumptions that may prove to be
incorrect.
While the REIT anticipates that subsequent events and
developments may cause its views to change, the REIT specifically
disclaims any obligation to update these forward-looking statements
except as required by applicable law. These forward-looking
statements should not be relied upon as representing the REIT's
views as of any date subsequent to the date of this news release.
There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements. The factors identified above are not
intended to represent a complete list of the factors that could
affect the REIT.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Nexus Real Estate Investment Trust