Partners Real Estate Investment Trust, (TSX VENTURE: PAR.UN)
announced today solid growth for the three months ended March 31,
2011. Effective November 3, 2010, the name of Charter Real Estate
Investment Trust was changed to Partners Real Estate Investment
Trust. All references to "Partners Real Estate Investment Trust",
"Partners REIT", the "REIT" and similar references in this press
release refer to Charter Real Estate Investment Trust prior to the
name change. In addition, effective January 1, 2011 the REIT
adopted International Financial Reporting Standards ("IFRS").
Please refer to the REIT's Management Discussion and Analysis and
the condensed consolidated financial statements for the three
months ended March 31, 2011 for a comprehensive description of the
changes arising from the transition.
FIRST QUARTER HIGHLIGHTS:
-- Occupancies up significantly to 97.6% from 92.0% last year
-- NOI rises 25% on contribution from acquisitions and stable same property
performance
-- New debt reduces average effective interest rate from 5.93% to 5.24%
-- Strong leasing activities during and subsequent to quarter
-- Acquisition of six properties in Manitoba and Quebec strengthens
portfolio
-- $28.75 million 8% unsecured subordinated debentures offering completed
-- First B.C. acquisition completed subsequent to quarter end
-- Renewed credit facility on improved terms subsequent to quarter end
-- Focus on growing Unitholder value through accretive acquisitions and
enhanced property performance continues
Solid Operating Performance
Weighted average occupancy at March 31, 2011 increased
significantly to 97.6% from 92.0% at the same time last year and
from 95.7% at December 31, 2010. The increase is due to strong
occupancies at the recently acquired Wellington Southdale Plaza and
six retail properties occupied primarily by Shoppers Drug Mart,
which had occupancies of 97.2% and 100.0% upon acquisition,
respectively, as well as increased occupancy rates at a number of
the REIT's other properties. In addition, leasing activities were
successful in offsetting lease expiries in the fourth quarter of
2010 and the first quarter of 2011. As of June 13, 2011 the REIT
had renewed or signed new leases representing 92% of lease expiries
for 2011.
Net Operating Income ("NOI") increased 25% to $3.0 million in
the first quarter of 2011 from $2.4 million in the same prior-year
period due primarily to the contribution from recent acquisitions
and stable same property NOI.
Funds from Operations ("FFO") rose to $1.1 million ($0.04 per
unit) in the first quarter of 2011 from $0.9 million ($0.04 per
unit) in the first quarter of the prior year. The increase is due
primarily to the contribution from acquisitions in the period. Per
unit amounts were impacted by the 67.2% increase in the number of
units outstanding resulting from a rights offering in July 2010 and
a bought-deal public offering of units in December 2010.
"We continue to meet our portfolio growth objectives, acquiring
seven high quality properties during and subsequent to the first
quarter of 2011. These purchases significantly enhance our
portfolio, extend our presence in current and new urban markets,
and will make a solid and accretive contribution to our FFO though
the balance of 2011 and going forward," commented Adam Gant, Chief
Executive Officer. "Looking ahead, our near-term goal is to further
expand our portfolio geographically across western Canada in the
Winnipeg, Edmonton, Vancouver and Victoria markets."
Solid Financial Position
The changes to the REIT's balance sheet at March 31, 2011
compared to December 31, 2010 were due primarily to acquisitions
and financings completed in the first quarter of 2011. As at March
31, 2011 the REIT's ratio of debt to gross book value was 67.4%
compared to 60.0% at December 31, 2010. Interest coverage and debt
service coverage ratios remained a conservative 1.71 times and 1.35
times respectively.
During the first quarter of 2011 the REIT assumed first
mortgages aggregating $17.2 million on the six Shoppers Drug Mart
properties acquired on March 17, 2011 (see discussion below). The
mortgages have a weighted average interest rate, adjusted to
market, of 4.9% and mature between 2015 and 2021.
Overall, the REIT's mortgage portfolio incurs a weighted average
effective interest rate of 5.24%, down from 5.93% as at March 31,
2010 with a weighted average term to maturity of approximately
seven years.
Key Developments
In March 2011 the REIT completed an offering of $28.75 million
aggregate principal amount of 8.0% extendible convertible unsecured
subordinated debentures, including an over-allotment option, at a
price of $1,000 per $1,000 principal amount of debentures. The
debentures mature on March 31, 2016 and bear interest at an annual
rate of 8.0% payable semi-annually, in arrears, on March 31 and
September 30 in each year commencing on September 30, 2011. The
debentures are convertible at the option of the holder into REIT
units at a conversion price of $2.20 per unit.
The proceeds of the debentures were used in part to purchase a
portfolio five properties in Manitoba and one in Quebec aggregating
approximately 104,000 square feet of gross leaseable area. The
properties are 100% occupied, primarily by Shoppers Drug Mart. The
total aggregate purchase price was approximately $32.9 million
satisfied by the assumption of existing mortgages of approximately
$17.2 million with the balance in cash. The purchase closed on
March 17, 2011. The properties currently generate NOI of
approximately $2.3 million on an annualized basis and are expected
to generate annual incremental Funds From Operations of
approximately $600,000.
On May 16, 2011 the REIT acquired the majority of the retail
units totalling approximately 32,500 square feet of the Centuria
Urban Village, a food and drug store anchored high-rise mixed use
retail and residential property located in Kelowna, British
Columbia. The purchase price as approximately $8.9 million and was
satisfied with cash from the proceeds of the recently completed
Convertible Unsecured Subordinated Debenture Offering and the
REIT's line of credit. The properties on an annualized basis
currently generate NOI of approximately $650,000 and will generate
approximately $550,000 in incremental Funds From Operations.
On May 16, 2011 the REIT renewed its Operating Credit Line
through May 15, 2013 for an amount of $5.8 million, with upward
expansion, replacing the prior facility. The new facility bears
interest at a rate equal to the Bank's prime rate plus 2.25% per
annum, or the Bank's Acceptance stamping fee plus 3.25% per annum,
an improvement from the previous rates of 3.50% and 4.50%
respectively. On May 16, 2011 $2.25 million was drawn on the
facility to patially fund the purchase of Centuria Urban
Village.
"We have been very active in both the debt and capital markets
this year, strengthening our liquidity and financial position and
providing us with the resources and the flexibility to act on
future accretive growth opportunities," Mr. Gant concluded.
Investor Conference Call
A conference call to discuss the recent operating and financial
results, as well as recent acquisitions, will be hosted by Adam
Gant, Chief Executive Officer and Patrick Miniutti, President and
Chief Operating Officer, on Thursday June 16, 2011 at 11:00 am ET.
The telephone numbers for the conference call are:
Local: (416) 915-8110 and North American Toll Free: (866)
838-1265.
The telephone numbers to listen to the call after it is
completed (Instant Replay) are local (416) 915-1035 or North
American toll free (866) 245-6755. The Passcode for the Instant
Replay is 933991#. A recording of the call will also be archived on
the REIT's website at www.partnersreit.com.
2010 Annual Meeting of Unitholders
The REIT will hold its 2010 Annual and Special Meeting of
Unitholders on Tuesday, June 14, 2011 at 10:00 am ET at The
National Club, 333 Bay Street, Toronto, Ontario. Management will
make a presentation on the REIT's recent results and its business,
and Unitholders will have the opportunity to ask questions.
Partners REIT cordially invites all Unitholders to attend the
meeting.
Financial Highlights
----------------------------------------------------------------------------
----------------------------------------------------------------------------
($ and units in 000s, except per unit amounts)
----------------------------------------------------------------------------
For the three months ended March 31, 2011 2010
----------------------------------------------------------------------------
Revenues 4,960 4,101
Portfolio Occupancy 97.6% 92.0%
Net Operating Income (NOI) 3,006 2,400
Funds from Operations (FFO) 1,108 855
FFO per Unit $0.04 $0.04
Net Income 1,068 625
Net Income per Unit $0.03 $0.03
Distributions Declared 1,239 741
Distributions Declared per Unit $0.04 $0.04
Cash Distributions (1) 1,178 679
Cash Distributions per Unit (1) $0.04 $0.04
Weighted avg units outstanding 30,928 18,489
Debt to Gross Book Value 67.4% 63.5%
Interest Coverage Ratio(2) 1.71 1.78
Debt Service Coverage Ratio(2) 1.35 1.46
Weighted Average Interest Rate (3) 5.24% 5.93%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1. Represents distributions to unitholders net of the distribution
reinvestment plan.
2. Calculated on a rolling four quarter basis
3. Represents the weighted average effective interest rate for secured debt
excluding the bank credit facility with a floating rate of interest.
For the complete first quarter 2011 financial statements and
Management's Discussion and Analysis, please visit www.sedar.com or
www.partnersreit.com.
About Partners REIT
Partners REIT is a growth-oriented real estate investment trust,
which currently owns (directly or indirectly) eighteen retail
properties located in British Columbia, Manitoba, Ontario and
Quebec, aggregating approximately 1.3 million square feet of
leaseable space. Partners REIT focuses on expanding and managing a
portfolio of retail and mixed-use community and neighbourhood
shopping centres located in both primary and secondary markets
across Canada.
Certain statements included in this press release constitute
forward-looking statements, including, but not limited to, those
identified by the expressions "expect," "will" and similar
expressions to the extent they relate to Partners REIT. The
forward-looking statements are not historical facts but reflect
Partners REIT's current expectations regarding future results or
events. These forward looking statements are subject to a number of
risks and uncertainties that could cause actual results or events
to differ materially from current expectations, including general
economic and market factors, local real estate conditions,
including the development of properties in close proximity to
Partners REIT's properties, competition, changes in government
regulation, dependence on tenants, financial conditions, interest
rates, the availability of equity and debt financing, environmental
and tax-related matters, reliance on the Manager, potential
conflicts of interest and reliance on key personnel. Although
Partners REIT believes that the assumptions inherent in the
forward-looking statements are reasonable, forward-looking
statements are not guarantees of future performance and,
accordingly, readers are cautioned not to place undue reliance on
such statements due to the inherent uncertainty therein.
Neither the 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.
Contacts: Partners Real Estate Investment Trust Patrick Miniutti
President and Chief Operating Officer (250) 940-5500
www.partnersreit.com
Partners Reit (TSXV:PAR.UN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Partners Reit (TSXV:PAR.UN)
Historical Stock Chart
From Jul 2023 to Jul 2024