Partners Real Estate Investment Trust
TSX : PAR.UN

Partners Real Estate Investment Trust

May 03, 2017 18:21 ET

Partners Announces Results for the First Quarter of 2017

TORONTO, ONTARIO--(Marketwired - May 3, 2017) - Partners Real Estate Investment Trust (the "REIT," or "Partners") (TSX: PAR.UN) today announced its results for the three month period ended March 31, 2017 (the "first quarter").

FIRST QUARTER 2017 HIGHLIGHTS

  • Net income of $2.1 million, a reduction of $0.2 million when compared to the first quarter of 2016.
  • Revenues from income producing properties of $13.9 million, a $0.5 million reduction when compared to the first quarter of 2016.
  • NOI of $8.2 million, a reduction of $0.2 million when compared with the first quarter of 2016. Same Property NOI (SPNOI) was $8.2 million, unchanged from the first quarter of 2016.
  • FFO and AFFO per unit of $0.08 and $0.06, compared to $0.09 and $0.05, respectively, for the first quarter of 2016.
  • The REIT is now reporting on Adjusted Cash Flow from Operations (ACFO) which is a recently defined metric introduced by REALPAC. The ACFO payout ratio for the first quarter is 95.9%.
  • Occupancy of 95.3% as at March 31, 2017, an improvement when compared to 95.1% as at December 31, 2016.
  • As at March 31, 2017, the REIT had renewed a total of 180,568 square feet of leases that were originally set to expire during 2017, representing an advance renewal rate of approximately 63% for 2017.
  • During the quarter, the REIT closed two re-financings for properties in Quebec. The financings totalled $7.0 million and after payout of the existing mortgages provided $2.1m in net proceeds. These mortgages each were for 5 years, at 3.11%, replacing mortgages that carried an average contract interest rate of 5.03%.
  • On April 18, 2017, the REIT announced that it had finalized a $3.0 million mortgage at its 137th Avenue property in Edmonton, Alberta. This mortgage was refinanced for five years at 3.91% replacing a $2.1 million mortgage at 4.23%.

"Our Q1 2017 results reflect the disposition of Washington Park that occurred in December 2016. The sale was accretive to the REIT's net asset value as the proceeds, net of transaction costs, exceeded the carrying value. On a Same Property basis, Net Income, Revenue, and NOI is flat quarter over quarter," stated Jane Domenico, the REIT's CEO. "The REIT is pleased to announce that it has commenced construction at Place Desormeaux and Mariner Square on two of our development opportunities."

As at and for the three months ended
Mar 31, 2017 Mar 31, 2016
Revenues from income producing properties $ 13,871,283 $ 14,403,183
Net income (loss) 2,147,990 2,379,145
Net income (loss) per unit - basic 0.06 0.07
NOI - same properties(1) 8,153,916 8,166,154
NOI - all properties(1) 8,153,916 8,345,948
FFO(1)(9) 2,810,703 2,880,016
FFO per unit(1)(9) 0.08 0.09
AFFO(1) (9) 2,001,444 1,831,943
AFFO per unit(1)(9) 0.06 0.05
ACFO(1) 2,246,099 1,648,641
Distributions(2) 2,147,370 2,114,508
Distributions per unit(2) 0.06 0.06
ACFO distribution payout ratio(3) 95.6% 128.3%
Cash distributions(4) 1,578,328 1,593,669
Cash distributions per unit(4) 0.05 0.05
As at Mar 31, 2017 Dec 31, 2016 Dec 31, 2015
Total assets $ 514,701,003 $ 514,700,205 $ 520,970,422
Total debt(6) 354,302,935 354,556,805 364,550,117
Total equity 152,068,836 151,508,380 148,888,084
Weighted average units outstanding - basic 34,065,928 33,690,649 27,831,288
Weighted average units outstanding - diluted 34,067,198 33,690,649 27,831,288
Debt-to-gross book value including debentures(5) 68.6% 68.6% 69.5%
Debt-to-gross book value excluding debentures(5) 57.4% 57.5% 58.6%
Interest coverage ratio(6) 1.82 1.81 1.59
Debt service coverage ratio(6) 1.17 1.18 1.07
Mortgages weighted average effective interest rate(7) 4.34% 4.41% 4.57%
Portfolio occupancy(8) 95.3% 95.1% 94.6%
(1) NOI - same properties and all properties, FFO, AFFO and ACFO are non-IFRS financial measures widely used in the real estate industry. See "Part II - Performance Measurement" for further details and advisories.
(2) Represents distributions to unitholders on an accrual basis. Distributions are payable as at the end of the period in which they are declared by the Board of Trustees, and are paid on or around the 15th day of the following month. Distributions per unit exclude the 5% bonus units, or 3% bonus units for distributions with a record date after March 1, 2016, given to participants in the Distribution Reinvestment and Optional Unit Purchase Plan.
(3) Distribution payout ratio is a non-IFRS financial measure widely used in the real estate industry, calculated as total distributions as a percentage of ACFO. Management considers the distribution payout ratio a valuable metric to determine the sustainability of the REIT's distribution. Non-IFRS measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other issuers. There is no directly comparable IFRS measure.
(4) Represents distributions on a cash basis, and as such, excludes the non-cash distributions of units issued under the Distribution Reinvestment and Optional Unit Purchase Plan.
(5) Debt-to-gross book value is a non-IFRS financial measure widely used in the real estate industry. See calculation under "Debt-to-Gross Book Value" in "Part IV - Results of Operations". Management considers debt-to-gross book value to be a valuable metric in assessing the REIT's overall leverage. Non-IFRS measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other issuers. There is no directly comparable IFRS measure.
(6) Interest coverage ratio and debt service coverage ratio are non-IFRS financial measures widely used in the real estate industry, calculated on a rolling four-quarter basis. See definition under "Mortgages and Other Financing" in "Part IV - Results of Operations". Management considers the interest coverage and debt service coverage ratios to be valuable metrics in assessing the REIT's ability to make contractual payments on debt. Non-IFRS measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other issuers. There are no directly comparable IFRS measures.
(7) Represents the weighted average effective interest rate for secured debt excluding debentures and credit facilities.
(8) Portfolio occupancy is calculated as economic occupancy, not physical occupancy. A unit is considered occupied once it is committed to a lease with a minimum one-year term.
(9) Comparative figures have been reclassified to conform with the current year's presentation.

Further Information

A more detailed analysis of the REIT's financial results for the first quarter of 2017 are included in the REIT's Management Discussion and Analysis and Condensed Consolidated Financial Statements, which have been filed on SEDAR and can be viewed at www.sedar.com or on the REITs' website at www.partnersreit.com.

Conference Call

Partners will host a conference call at 9:00 AM Eastern on Thursday, May 4, 2017, at which time Partners' management will both review the financial results and discuss the REIT's strategic outlook.

Conference Dial-In Details

Toll Free (North America): 800-377-0758
Local: 416-340-2216

Instant Replay Details (Available until May 11, 2017)

Toll Free (North America): 800-408-3053
Passcode: 9522131#

A recording of the conference call will also be available via Partners' website.

About Partners REIT

Partners REIT is a growth-oriented real estate investment trust focused on the expansion and management of a portfolio of 35 retail and mixed-use community and neighbourhood shopping centres. These properties are located in both primary and secondary markets across British Columbia, Alberta, Manitoba, Ontario, and Quebec, and comprise a total of approximately 2.5 million square feet of leasable space.

Disclaimer

Certain statements included in this press release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect," "will" and similar expressions to the extent they relate to Partners REIT. The forward- looking statements are not historical facts but reflect Partners REIT's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including access to capital, regulatory approvals, intended acquisitions and general economic and industry conditions. Although Partners REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein.

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