OneREIT
TSX : ONR.UN

OneREIT

March 29, 2017 19:04 ET

OneREIT Announces 2016 Results

TORONTO, ONTARIO--(Marketwired - March 29, 2017) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY NON-CANADIAN SOURCE

OneREIT (TSX:ONR.UN) today announced results for the fourth quarter and year ended December 31, 2016.

Highlights:

  • Funds from Operations, adjusted ("FFO, adjusted") increased 1.7% to $37.7 million for the year ended December 31, 2016 compared to $37.1 million for the same period in 2015.
  • FFO, adjusted increased to $9.6 million for the fourth quarter 2016, compared to $9.5 million for the same period in 2015.
  • FFO, adjusted per unit was 11.0 cents and 43.3 cents for the quarter and year ended December 31, 2016, respectively.
  • FFO, adjusted payout ratio for the fourth quarter was 68.1%.
  • The weighted average cost of mortgage debt decreased to 4.21%, an improvement of 35 basis points since December 31, 2015.
  • Portfolio committed occupancy increased to 90.2% compared to 89.2% on December 31, 2015.
  • Net operating income ("NOI") was $18.4 million and $73.7 million for the fourth quarter and year ended December 31, 2016.
  • Debt to gross book value ratio (excluding and including convertible debentures) as at December 31, 2016 was 51.8% and 58.1% respectively.
  • The process to explore strategic alternatives is ongoing.

Richard Michaeloff, President and CEO of OneREIT, said "During 2016, we continued to improve our portfolio by building on the strength of our locations and increasing our occupancy level while striving to best serve our communities. Our operating results continue on their positive trend, with our committed occupancy having exceeded the 90% level. Several significant leasing deals with strong covenants were finalized including a 44,000 square feet lease to the City of Toronto and a 20,500 square feet lease to Planet Fitness, at Yorkgate Mall. Our leasing team is driving higher occupancy and continuing to build on our quality tenant profile. In addition, our redevelopment of the Golden Mile Shopping Centre continues on schedule, with the Real Canadian Superstore® (Loblaws) expected to commence paying rent and open its 92,000 square foot store later this spring. Our internalization of property management, completed in the spring of 2016 continues to meet our expectations and is starting to contribute positively to our leasing and occupancy levels."

Financial Highlights

Three months ended
December 31
Year ended
December 31
(all amounts in $000's, except per unit amounts and ratios) 2016 2015 2016 2015
Rental revenue and other income 30,026 30,742 119,947 123,270
Property operating expenses 12,169 12,393 48,156 50,202
Property operating income 17,857 18,349 71,791 73,068
Share of joint venture net operating income 498 458 1,879 1,822
Net operating income (1) 18,355 18,807 73,670 74,890
Trust expenses 1,042 1,156 4,765 4,522
Finance costs - joint venture operations 212 191 738 776
Finance costs - operations 7,657 7,941 31,557 32,626
Finance costs - distributions on Class B Units 830 826 3,321 4,133
Income before fair value gains (losses) and other income 8,614 8,693 33,289 32,833
Fair value gains (losses) associated with financial instruments 8,066 (4,053 ) (4,082 ) 67
Fair value gains (losses) on investment property 1,027 340 (726 ) (5,201 )
Fair value gain (loss) on joint venture (285 ) (51 ) (472 ) 222
Impairment loss on joint venture (2,782 ) - (2,782 ) -
Loss on sale of investment property (480 ) - (480 ) (712 )
Net Income for the period 14,160 4,929 24,747 27,209
FFO, adjusted (2) 9,614 9,543 37,697 37,075
FFO, adjusted per unit $ 0.110 $ 0.111 $ 0.433 $ 0.431
FFO, adjusted payout ratio 68.1 % 68.2 % 69.3 % 69.6 %(3)

Full Financial Results and MD&A will be available on SEDAR (www.sedar.com) as well as the Investors Relations section of the
REIT's website (www.onereit.ca).

(1) A non-IFRS measurement, calculated by the REIT as rental revenue (net rents, property tax and operating cost recoveries, as well as other miscellaneous income from tenants) less operating expenses for properties.
(2) The reconciliations from net income (loss) to Funds from Operations, adjusted ("FFO, adjusted") are included in the REIT's MD&A.
(3) FFO, adjusted payout ratio has been calculated on a pro forma basis as determined by the REIT's annualized distribution rate of $0.30 per unit.

The REIT's management considers Net Operating Income, Funds from Operations, adjusted and Debt to Gross Book Value ratio to be indicative measures in evaluating the REIT's performance. The table above includes non-IFRS information that should not be construed as an alternative to net income or cash flows from operations and may not be comparable to similar measures presented by other issuers as there is no standardized meaning prescribed by IFRS.

Conference Call

OneREIT will hold a conference call on Thursday March 30, 2017 at 11:00 am (ET). Participating on the call will be members of the REIT's senior management.

Investors are invited to access the call by dialling 416-642-5209 or 1-800-347-6311. A recording of this call will be made available Thursday March 30, 2017 beginning at 2:00 pm (ET) through to Thursday, April 13, 2017 ending at 2:00pm (ET). To access the recording, please call 647-436-0148 or 1-888-203-1112 and use the reservation number 7287613.

About OneREIT

OneREIT is an unincorporated, open-end real estate investment trust which focuses on owning and acquiring retail properties across Canada with the goal of enhancing long-term Unitholder value.

Forward-Looking Information

This press release contains forward-looking statements, which reflect management's expectations regarding the REIT's future growth, results of operations, performance, and business prospects and opportunities. These statements relate to, but are not limited to, the REIT's expectations, intentions, plans and beliefs . In some cases, forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative or grammatical variations of these terms or other comparable terminology. Readers should be aware that these statements are subject to known and unknown risks, uncertainties and other factors, including, but not limited to: those discussed or referenced under the heading "Risk Factors" in the REIT's Management's Discussion and Analysis for the three months and year ended December 31, 2016, as well as competition within the commercial real estate sector, the effective international, national and regional economic conditions and the availability of capital to fund further investments in the REIT's business. Actual events or results may differ materially from those suggested by any forward-looking statements. Readers should not place undue reliance on any forward-looking statements contained in this press release. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Although management of the REIT believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Neither the REIT nor any other person assumes responsibility for the accuracy and completeness of any forward-looking statements, and no one has any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or such other factors which affect this information, except as required by law.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of a prospectus, nor shall there be any sale of the Units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The Units of the OneREIT have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an exemption from the registration requirements of U.S. securities laws.

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