Calloway Real Estate Investment Trust

Calloway Real Estate Investment Trust

May 07, 2008 17:22 ET

Calloway Real Estate Investment Trust Releases First Quarter Results-Reports 8% Increase in per Unit Cash Flow

TORONTO, ONTARIO--(Marketwire - May 7, 2008) - Calloway Real Estate Investment Trust (TSX:CWT.UN) is pleased to report its results for the quarter ended March 31, 2008.

Highlights of the Quarter:

- Increased cash flow (funds from operations) by 10.4% over last year (8.2% increase on a per unit basis) and by 5.9% over last quarter (5.7% increase on a per unit basis).

- Invested over $55.0 million to complete the development and lease up of over 350,000 square feet of leaseable area.

- Portfolio occupancy rate maintained at over 99.0%.

- Disposed of a non-core asset for $39.5 million, realizing a gain of $19.1 million.

Mr. Simon Nyilassy, President and CEO said, "Leasing was again the main contributor to the solid performance in Calloway's portfolio of 132 properties in the quarter. It is a testament to the strength of our assets that we were able to sustain our already high occupancy rate of over 99.0%, while adding over 350,000 square feet of newly built, fully occupied buildings." Nyilassy added, "We also continue to enjoy a robust pipeline of over 1.4 million square feet of new leasing deals which will contribute to our growth in future quarters."

As at March 31, 2008, Calloway's $3.9 billion real estate portfolio included 20.5 million square feet of built gross leasable area and 5.9 million square feet of future developable area in 121 operating and 11 development properties.

Developments completed during the quarter comprised approximately 356,000 square feet of leasable area at a cost of $55.0 million. Calloway also advanced over $12.0 million on existing mezzanine loans during the quarter.

Calloway's debt to gross book value of 55.4% at quarter end remains at the low end of the Trust's target range of 55.0%-60.0%.

Calloway continues to execute its strategy of selling non-core real estate. The sale of one asset closed during the quarter yielding cash proceeds of $39.5 million and a gain of $19.1 million. An additional 8 properties are being marketed for sale, with 5 properties under conditional contracts with closing anticipated for second quarter.

The income-producing portfolio generated revenue of $106.7 million in the first quarter, a $4.9 million increase over the prior quarter and a $13.6 million increase over the prior year. Net operating income of $31.2 million has increased $1.3 million or 2.1% over the previous quarter and $6.5 million or 11.1% over the prior year. The increase over the previous quarter is primarily due to the completion of development activities during the fourth quarter of 2007 and first quarter of 2008. Quarterly cash flow as measured by funds from operations (FFO) totaled $42.7 million, a 5.9% increase over the previous quarter. FFO per unit (fully diluted) was $0.462 compared to $0.437 in the previous quarter, representing a 5.7% increase, due to increases in rental income from the completion of developments. The Trust's quarterly distribution of $0.387 per unit represents a payout ratio (to FFO) of 83.8% compared to 88.5% in the previous quarter.

Subsequent to quarter ended, the Trust announced it would buy six new large-scale shopping centres for $375 million. Under the deal, Calloway will pay $270 million on closing and another $105 million over the next three years as additional space is built and occupied in the centres. The six new centres are all anchored by a Wal-Mart store or Wal-Mart Supercentre with three located in Calloway's core market of Ontario, while the others are in British Columbia, Quebec and Saskatoon.

On May 2, 2008, the Trust also raised $125 million through the successful issuance of a 5-year convertible debenture. The proceeds will be used to partially repay an existing bridge loan and the balance to repay operating lines.

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 Thursday, May 8, 2008 at 9.00 a.m. eastern time (ET). Participating on the call will be members of Calloway's senior management. Investors are invited to access the call by dialing 1-800-588-4490. 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 Thursday, May 8, 2008 beginning at 11:00 p.m. (ET) through to 11:59 p.m. (ET) on Friday, May 15, 2008. To access the recording please call 1-877-289-8525 and use the reservation number 21269656#.

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