Allied Properties Real Estate Investment Trust

Allied Properties Real Estate Investment Trust

March 09, 2005 17:37 ET

Allied Properties Real Estate Investment Trust Announces Strong Fourth-Quarter and Year-End Results


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST

TSX SYMBOL: AP.UN

MARCH 9, 2005 - 17:37 ET

Allied Properties Real Estate Investment Trust
Announces Strong Fourth-Quarter and Year-End Results

TORONTO, ONTARIO--(CCNMatthews - March 9, 2005) - Allied Properties REIT
(TSX:AP.UN) today announced results for the fourth quarter and fiscal
year ended December 31, 2004.

2004 Highlights

"Allied Properties REIT continued its strong performance in 2004," said
Michael R. Emory, President and CEO. "We made excellent progress against
all important financial and operating performance indicators."

In 2004, the REIT

- increased Distributable Income to $11.9 million, up 73% from the
abbreviated comparable period in 2003,

- increased Distributable ncome per unit to $1.325, up 18% from the
abbreviated comparable period in 2003,

- increased monthly distributions (effective March, 2004) from $0.09166
per unit ($1.10 per unit annualized) to $0.095 per unit ($1.14 per unit
annualized),

- achieved a pay-out ratio of 88.1% of Distributable Income for the year
and 83.6% of Distributable Income for the second half of the year,

- completed six acquisitions and announced a seventh for a total of $122
million, increasing the size of its portfolio by 70%, increasing its
share of the Toronto target market to over 11% and enhancing its
Distributable Income per unit,

- initiated the expansion of its geographic focus through the
acquisition of 425 Viger Avenue West in Montreal's International
District,

- completed its first bought deal for gross proceeds of $32 million at a
price of $11.10 per unit and announced its second bought deal for gross
proceeds of $25 million at a price of $13.00 per unit,

- increased the leased area of its portfolio to 99%,

- extended the weighted average term to maturity of its mortgages to
6.62 years,

- reduced the weighted average interest rate on its mortgages to 6.51%
and

- maintained significant acquisition capacity, with a
debt-to-Gross-Book-Value ratio of 50.1% just following year-end, well
below the 60% permitted by the Declaration of Trust.

Financial Results

The REIT's financial results for the fourth quarter ended December 31,
2004, are summarized below and compared to the fourth quarter ended
December 31, 2003:



(In thousands except Three Months Three Months Variance
for per unit amounts) Ended December Ended December
31, 2004 31, 2003
---------------------------------------------------------------------
Revenue from rental properties $10,119 $5,541 $4,578
Rental property operating cost 3,664 1,776 (1,888)
---------------------------------------------------------------------
Net rental income 6,455 3,765 2,690
---------------------------------------------------------------------
Financing expense 2,117 1,200 (917)
Depreciation and amortization 1,958 263 (1,695)
---------------------------------------------------------------------
Income from operations 2,380 2,302 78
---------------------------------------------------------------------
Trust expenses 382 303 (79)
---------------------------------------------------------------------
Net income 1,998 1,999 (1)
---------------------------------------------------------------------
Amortization on rental properties 1,194 246 948
Amortization on mortgage premium (103) (94) (9)
Amortization on cost of acquired
leases 308 - 308
Amortization on cost of acquired
leases mark-to-market 31 - 31
Amortization of acquired tenant
relationships 317 - 317
Step-rent adjustments (276) - (276)
Compensation expense, long-term
incentive plan 26 - 26
---------------------------------------------------------------------
Distributable Income(1) $3,495 $2,151 $1,344
---------------------------------------------------------------------
---------------------------------------------------------------------
Distributable Income per
unit (basic) $0.342 $0.338 $0.004
---------------------------------------------------------------------


(1). Distributable Income, which is not defined within Canadian
generally accepted accounting principles, has been calculated in
accordance with the terms of the REIT's Declaration of Trust.

Net rental income, Distributable Income and Distributable Income per
Unit for the fourth quarter were up from the same period last year, net
rental income by 71%, Distributable Income by 62% and Distributable
Income per Unit by 1.2%.

The REIT's financial results for the year ended December 31, 2004, are
summarized below and compared to the 316-day period ended December 31,
2003:



(In thousands except for Year Ended 316-Day Period Variance
per unit amounts) December Ended December
31, 2004 31, 2003
---------------------------------------------------------------------
Revenue from rental properties $34,565 $17,945 $16,620
Rental property operating cost 12,028 5,803 (6,225)
---------------------------------------------------------------------
Net rental income 22,537 12,142 10,395
---------------------------------------------------------------------
Financing expense 6,997 3,811 (3,186)
Depreciation and amortization 6,108 840 (5,268)
---------------------------------------------------------------------
Income from operations 9,432 7,491 1,941
---------------------------------------------------------------------
Trust expenses 1,565 1,057 (508)
---------------------------------------------------------------------
Net income 7,867 6,434 1,433
---------------------------------------------------------------------
Amortization on rental properties 4,209 789 3,420
Amortization on mortgage premium (444) (316) (128)
Amortization on cost of acquired
leases 820 - 820
Amortization on cost of acquired
leases mark-to-market (18) - (18)
Amortization of acquired tenant
relationships 725 - 725
Step-rent adjustments (1,325) - (1,325)
Compensation expenses,
long-term incentive plan 89 - 89
---------------------------------------------------------------------
Distributable Income(1) $11,923 $6,907 $5,016
---------------------------------------------------------------------
---------------------------------------------------------------------
Distributable Income per
unit (basic) $1.325 $1.122 $0.203
---------------------------------------------------------------------


(1). Distributable Income, which is not defined within Canadian
generally accepted accounting principles, has been calculated in
accordance with the terms of the REIT's Declaration of Trust.

Net rental income, net income, Distributable Income and Distributable
Income per unit for the year were up considerably from the abbreviated
comparable period last year, net rental income by 86%, net income by
22%, Distributable Income by 73% and Distributable Income per unit by
18%.

Outlook

As the REIT embarks on 2005, management remains confident in the REIT's
portfolio and in the REIT's ability to sustain a manageable rate of
growth. The REIT intends to continue the consolidation process in its
Toronto target market and to pursue Class I acquisition opportunities in
its Montreal target market. In doing so, the REIT will continue to focus
on its competitive strengths -- convenient locations, distinctive
internal and external environments and significantly lower overall
occupancy costs. It will also continue to work with existing and
prospective tenants to remain a preferred provider of office space in
its target markets.

Additional Financial Information

The financial statements with accompanying notes and MD&A will be filed
on SEDAR and available on the REIT's web-site at
www.alliedpropertiesreit.com.

Allied Properties REIT owns a portfolio of predominantly Class I office
properties in downtown Toronto and downtown Montreal. The objectives of
the REIT are to provide stable and growing cash distributions to its
unitholders and to maximize unitholder value through the effective
management and accretive growth of its portfolio.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Allied Properties REIT
    Michael R. Emory
    President and Chief Executive Officer
    (416) 977-9002
    memory@alliedpropertiesreit.com