OneREIT
TSX : ONR.UN

OneREIT

November 14, 2016 17:28 ET

OneREIT™ Announces Third Quarter 2016 Results

TORONTO, ONTARIO--(Marketwired - Nov. 14, 2016) -

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

OneREIT (TSX:ONR.UN) today announced results for the third quarter ended September 30, 2016.

Subsequent to quarter end:

  • On October 19, 2016, the REIT completed the sale of Elgin Mall in St. Thomas, Ontario. Vacancy at this property represented approximately 2% of the total portfolio GLA.
  • In addition to the recently announced new leases for Dollarama at Galeries Don Quichotte and Planet Fitness at Yorkgate Mall, the REIT has finalized new leases for an additional Planet Fitness at Burlington Shopping Centre and two additional Dollarama stores at South Hill Mall and Golden Mile Shopping Centre. These five new leases represent a total of 66,700 square feet, resulting in a pro forma committed occupancy of 89.3%.

Highlights:

  • FFO, adjusted per unit increased to 11.2 cents and 32.3 cents for the three and nine month periods ended September 30, 2016, an increase of 0.4 cents and 0.2 cents respectively, for the comparative 2015 periods.
  • FFO, adjusted payout ratio for the third quarter was 67.0%.
  • The weighted average cost of mortgage debt decreased to 4.26%, an improvement of 30 basis points since December 31, 2015.
  • On August 31, 2016, the REIT obtained a new mortgage loan of $10.0 million bearing an interest rate of 2.81% to refinance a maturing loan of $5.0 million bearing an interest rate of 5.50% on Qwanlin Mall, located in Whitehorse, Yukon.
  • On September 26, 2016, the REIT obtained a new mortgage loan of $3.3 million bearing an interest rate of 3.37% to refinance a maturing loan of $2.5 million bearing an interest rate of 4.70% on 750-760 Birchmount, located in Toronto, Ontario.
  • Net operating income ("NOI") was $18.7 million for the three months ended September 30, 2016.
  • Debt to gross book value ratio (excluding and including convertible debentures) as at September 30, 2016 was 52.2% and 58.5% respectively.
  • The process to explore strategic alternatives announced on June 8, 2016 is ongoing.

Richard Michaeloff, President and CEO of OneREIT, said "During the third quarter of 2016, our operating results have trended positively, and our occupancy levels have improved to nearly 90%. Subsequent to quarter end, we finalized several significant leasing deals, and we remain focused on maintaining this momentum. Our internalization of property management successfully completed earlier this year has also begun contributing positively to our results. In addition, our redevelopment of our Golden Mile Shopping Centre continues on schedule, with the turnover for build out of 92,000 square feet under lease to Loblaws expected to occur at the beginning of December."

Financial Highlights

Three months ended
September 30
Nine months ended
September 30
(all amounts in $000's, except per unit amounts and ratios) 2016 2015 2016 2015
Rental revenue and other income 29,802 30,463 89,921 92,528
Property operating expenses 11,526 12,185 35,987 37,809
Property operating income 18,276 18,278 53,934 54,719
Share of joint venture net operating income 463 452 1,382 1,363
Net operating income (1) 18,739 18,730 55,316 56,082
Trust expenses 1,178 1,112 3,723 3,366
Finance costs - joint venture operations 170 190 527 584
Finance costs - operations 7,917 8,132 23,900 24,685
Finance costs - distributions on Class B Units 830 827 2,491 3,307
Income before fair value gains (losses) and other income 8,644 8,469 24,675 24,140
Fair value gains (losses) associated w ith financial instruments 1,794 4,726 (12,148 ) 4,120
Fair value gains (losses) on investment property 981 (2,571 ) (1,753 ) (5,541 )
Loss on sale of investment property - (712 ) - (712 )
Fair value gains (losses) on joint venture property (417 ) (366 ) (187 ) 273
Net Income for the period 11,002 9,546 10,587 22,280
FFO, adjusted (2) 9,747 9,323 28,084 27,532
FFO, adjusted per unit $ 0.112 $ 0.108 $ 0.323 $ 0.321
FFO, adjusted payout ratio (3) 67.0 % 69.4 % 69.7 % 70.1 %

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 are included in the REIT's MD&A.
(3) FFO, adjusted payout ratio has been calculated based on 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 Tuesday, November 15th, 2016 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 Tuesday, November 15, 2016 beginning at 2:00 pm (ET) through to Tuesday, November 29, 2016 ending at 2:00pm (ET). To access the recording, please call 647-436-0148 or 1-888-203-1112 and use the reservation number 5788061.

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 nine months ended September 30, 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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