Calloway Real Estate Investment Trust

Calloway Real Estate Investment Trust

November 06, 2007 17:13 ET

Calloway Announces Third Quarter Results

TORONTO, ONTARIO--(Marketwire - Nov. 6, 2007) - Calloway Real Estate Investment Trust (the "Trust") (TSX:CWT.UN) is pleased to report its results for the quarter ended September 30, 2007.

Highlights of the Quarter:

- Increased cash flow (funds from operations) by 25% over last year (11% increase on a per unit basis) and by 3.3% over last quarter (3% increase on a per unit basis).

- Invested over $100 million in new acquisitions and developments, with a further $300 million expected within the next 18 months, based on the build out of committed lease deals.

- Increased pipeline of future developments by 19% to 6.8 million square feet (Calloway's share).

- Portfolio occupancy rate maintained at 99%.

Mr. Simon Nyilassy, President and CEO said, "Calloway's 146 shopping centres and development properties continue to attract substantial interest from tenants. In addition to the 99% occupancy rate in the currently built space, we have pre-leased almost 25% of the future expansion and development area in these properties, a substantial increase over the prior quarter. Also during the quarter, the Trust committed to the funding of five new mezzanine loans with the option to purchase an additional 708,000 square feet of retail space on completion. Between our expansion, development and mezzanine loan program, the growth in our portfolio of newly built, well located and strongly anchored portfolio is secure."

As at September 30, 2007, Calloway's $3.8 billion real estate portfolio included 19.7 million square feet of built gross leasable area and 6.8 million square feet of future developable are in 132 operating and 17 development properties.

Acquisitions and developments completed during the quarter comprised approximately 225,000 square feet of leasable area at a cost of $49.5 million. Calloway acquired one income producing property and five development properties from SmartCentres and other vendors.

Calloway entered into five new mezzanine loans with a total commitment of $142 million. Funds totaling $82.7 million was advanced under the mezzanine portfolio.

Calloway's debt to gross book value is a conservative 54.7% at quarter end. With the turbulence in the debt markets, Calloway elected to arrange an additional $150 million in short term financing. During the quarter the Trust also renewed its shelf prospectus for a further $2 billion. Subsequent to the quarter end, Calloway entered into a three-month bond forward contract to manage interest costs on debt financing. Calloway has the capacity to acquire or develop an additional $297 million in assets through debt financing and maintain a 55% to 60% debt to gross book value.

The income producing portfolio-generated revenue of $98.7 million, a $2.4 million increase over the prior quarter. Rental revenues from income properties increased by $1.1 million and interest income increased $1.3 million due to increased investment in mezzanine loans. Net operating income of $65.3 million has increased $1.1 million or 1.8% over the second quarter 2007. The increase is primarily due to Acquisitions and development activities during the second half of 2006 and during 2007. Quarterly cash flow as measured by funds from operations "FFO" totaled $41.5 million, a 3.3% increase over previous quarter. "FFO" per unit (fully diluted) was $0.454 compared to $0.441 in the previous quarter, representing a 3.0% increase, due to rental income from acquisitions and development, higher interest income due to additional advances under mezzanine loans, offset by higher interest expense and increased outstanding units. The Trust's quarterly distribution of $0.383 per unit represents a payout ratio (to FFO) of 84.4% compared to 85.0% in the previous quarter.

Full reports of the financial results are outlined in the unaudited financial statements and the management discussion and analysis, available on SEDAR. In addition, supplemental information is available on Calloway's website at

Calloway will hold a conference call on Wednesday, November 7, 2007 at 10.00 a.m. eastern time. Participating on the call will be members of Calloway's senior management. Investors are invited to access the call by dialing 1-800-731-5319. You will be required to identify yourself and the organization on whose behalf you are participating. A recording of this call will be made available November 7, 2007 beginning at 12:00 p.m. (ET) through to 11:59 p.m. (ET) on Wednesday November 14, 2007. To access the recording please call 1-877-289-8525 and use the reservation number 21250621#.

This press release contains "forward looking statements" subject to various significant risks and uncertainties which may cause actual results, performances and achievements of Calloway to be materially different from any future results, performances or achievements, expressed or implied by such forward looking statements. Such risk factors include, but are not limited to, risks associated with real property ownership, availability of cash flow, restrictions on redemption, general uninsured losses, future property acquisition, environmental matters, tax related matters, debt financing, Unitholder liability, potential conflicts of interest, potential dilution, and reliance on key personnel. Calloway cannot assure investors that actual results will be consistent with these forward looking statements and Calloway assumes no obligation to update or revise them to reflect new events or circumstances.

The Toronto Stock Exchange neither approves nor disapproves of the contents of this Press Release.

Contact Information

  • Calloway Real Estate Investment Trust
    Simon Nyilassy
    President and Chief Executive Officer
    (905) 326-6400 x 7649
    Calloway Real Estate Investment Trust
    Bart Munn
    Chief Financial Officer
    (905) 326-6400 x 7631