OneREIT
TSX : ONR.UN

OneREIT

August 11, 2015 17:51 ET

OneREIT Announces Second Quarter 2015 Results

TORONTO, ONTARIO--(Marketwired - Aug. 11, 2015) -

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

OneREIT (TSX:ONR.UN) today announced results for the second quarter ended June 30, 2015.

Highlights:

  • Net operating income ("NOI") increased 13.5% and 16.0%, respectively for the three and six months ended June 30, 2015, compared with the comparative periods in 2014.

  • Funds from Operations ("FFO") increased 12.0% to $9.2 million for the three months ended June 30, 2015, and 15.6% to $18.2 million for the six months ending June 30, 2015, compared with the comparative periods in 2014.

  • Effective as of the July distribution payable August 14, 2015, the REIT has adjusted its annualized distribution rate to $0.30 per unit, representing a pro forma FFO payout ratio of 70.1% and 70.8% for the three and six months ended June 30, 2015 respectively.

  • On May 1, 2015, the REIT secured a new $80 million mortgage loan bearing an interest rate of 3.48% and 10 year term, which replaced a maturing $34 million mortgage loan bearing an interest rate of 5.29%.

  • On June 3, 2015, the REIT redeemed its 6.75% convertible unsecured subordinated debentures that were due July 31, 2015.

  • Weighted average cost of mortgage debt at June 30, 2015 decreased to 4.61% compared to 4.97% at June 30, 2014.

  • Debt to gross book value ratio (excluding convertible debentures) as at June 30, 2015 was 52.2% compared to 50.7% at December 31, 2014 and debt to gross book value ratio (including convertible debentures) as at June 30, 2015 was 58.2% compared to 57.7% at December 31, 2014.

  • Portfolio occupancy on June 30, 2015 stood at 88.1% compared to 84.3% on June 30, 2014.

Richard Michaeloff, President and CEO of OneREIT, said "In this second quarter of 2015, our results continue to trend positively and we are pleased with our continuing repositioning. Our new distribution policy will allow us to maximize value in our existing portfolio and to fund future growth. We remain focused on growing our cash flow and driving our occupancy higher."

Financial Highlights
Three months ended June 30 Six months ended June 30
(all amounts in $000's, except per unit amounts and ratios) 2015 2014 2015 2014
Rental revenue and other income 30,813 27,303 62,065 55,310
Property operating expenses 12,515 11,246 25,624 24,039
Property operating income 18,298 16,057 36,441 31,271
Share of joint venture net operating income 459 469 911 932
Net operating income (1) 18,757 16,526 37,352 32,203
Trust expenses 1,215 1,372 2,254 2,455
Finance costs - joint venture operations 196 204 394 412
Finance costs - operations 8,217 6,804 16,553 13,637
Finance costs - distributions on Class B Units 1,240 1,085 2,480 2,210
Income before fair value gains (losses) and other income 7,889 7,061 15,671 13,489
Fair value gains (losses) associated with financial instrument 7,876 (66 ) (606 ) (6,252 )
Fair value (losses) on investment property (2,215 ) (2,323 ) (2,970 ) (3,034 )
Fair value gains on joint venture property 581 270 639 377
Net Income for the period 14,131 4,942 12,734 4,580
FFO (2) 9,157 8,174 18,208 15,756
FFO per unit $ 0.107 $ 0.114 $ 0.212 $ 0.220
FFO payout ratio (historical) (3) 98.7 % 102.3 %
FFO payout ratio (pro forma) (4) 70.1 % 70.8 %

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 are included in the REIT's MD&A.

(3) FFO payout ratio (historical) has been calculated based on the REIT's previous annualized distribution rate of $0.45 per unit.

(4) FFO payout ratio (pro forma) has been calculated on a pro forma basis as determined by the REIT's new distribution policy.

The REIT's management considers Net Operating Income, Funds from Operations 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 Wednesday, August 12, 2015 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 416-204-9702 or 1-800-524-8850. A recording of this call will be made available Wednesday, August 12, 2015 beginning at 2:00 pm (ET) through to Wednesday, August 26, 2015 ending at 2:00pm (ET). To access the recording, please call 647-436-0148 or 1-888-203-1112 and use the reservation number 8651185.

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 and six months ended June 30, 2015, 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.

Contact Information