Partners Real Estate Investment Trust
TSX : PAR.UN

Partners Real Estate Investment Trust

August 03, 2016 20:20 ET

Partners Announces Results for the Second Quarter of 2016

TORONTO, ONTARIO--(Marketwired - Aug. 3, 2016) - Partners Real Estate Investment Trust (the "REIT," or "Partners") (TSX:PAR.UN) today announced its results for the three month period ended June 30, 2016 (the "second quarter").

SECOND QUARTER 2016 HIGHLIGHTS

  • Net income of $3.3 million, an improvement of $2.5 million when compared to the second quarter of 2015.
  • Revenues from income producing properties of $13.9 million, consistent with the second quarter of 2015.
  • NOI of $8.3 million, an increase of $0.2 million when compared to the second quarter of 2015.
  • FFO and AFFO per unit of $0.08 and $0.07, respectively, both consistent with the second quarter of 2015.
  • AFFO payout ratio of 89%, compared to 85% the second quarter of 2015.
  • Occupancy of 94.2% as at June 30, 2016, a slight decrease when compared to a level of 94.6% as at December 31, 2015.
  • As at June 30, 2016, the REIT had renewed a total of 332,786 square feet of leases that were originally set to expire during 2016. This represents advance renewals of more than 87% of the GLA originally set to expire during 2016.
  • During the second quarter, the REIT substantially completed the internalization of the property management of its 25 properties in Ontario, Manitoba, Alberta, and British Columbia. Plans to internalize were first announced on March 16, 2016.
  • On June 16, 2016, the REIT announced that COGIR Real Estate had been selected as the sole provider of property management services for the REIT's 10 properties in Quebec, effective August 1, 2016.
  • On June 30, 2016, the REIT announced that it had finalized a $13.7 million, 2.94%, 5 year mortgage at its Wellington Southdale property in London, Ontario.
As at and for the three months ended As at and for the six months ended
Jun 30, 2016 Jun 30, 2015 Jun 30, 2016 Jun 30, 2015
Revenues from income producing properties $ 13,937,629 $ 13,856,589 $ 28,340,812 $ 28,380,709
Net income (loss) 3,344,790 789,020 5,723,935 (3,307,301 )
Net income (loss) per unit - basic 0.10 0.03 0.17 (0.13 )
NOI - all property (1) 8,315,459 8,080,979 16,661,408 16,573,686
FFO(1) 2,537,933 2,175,256 5,425,249 4,538,505
FFO per unit(1) 0.08 0.08 0.16 0.17
AFFO(1) 2,369,100 1,967,313 4,876,435 4,446,581
AFFO per unit(1) 0.07 0.07 0.15 0.17
Distributions(2) 2,117,373 1,672,302 4,231,881 3,338,386
Distributions per unit(2) 0.06 0.06 0.13 0.13
Distribution payout ratio - FFO/AFFO(3) 83% / 89 % 77% / 85 % 78% / 87 % 74% / 75 %
Cash distributions(4) 1,601,053 1,334,969 3,194,722 2,677,737
Cash distributions per unit - FFO/AFFO(4) 0.05 0.05 0.10 0.10
Cash distribution payout ratio(5) 63% / 68 % 61% / 68 % 59% / 66 % 59% / 60 %
As at Jun 30, 2016 Dec 31, 2015 Dec 31, 2014
Total assets $ 524,269,414 $ 520,970,422 $ 542,551,040
Total debt(6) 363,751,492 364,550,117 381,967,023
Total equity 151,405,073 148,888,084 149,036,368
Weighted average units outstanding - basic 33,544,654 27,831,288 26,206,391
Debt-to-gross book value including debentures(6) 69.0 % 69.5 % 70.0 %
Debt-to-gross book value excluding debentures(6) 58.1 % 58.6 % 54.2 %
Interest coverage ratio(7) 1.59 1.59 1.80
Debt service coverage ratio(7) 1.06 1.07 1.22
Mortgages weighted average effective interest rate(8) 4.46 % 4.57 % 4.43 %
Portfolio occupancy 94.2 % 94.6 % 94.3 %
(1) NOI - all property, FFO and AFFO are non-IFRS financial measures widely used in the real estate industry.
(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 FFO/AFFO. 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) Cash distribution payout ratio is a non-IFRS financial measure widely used in the real estate industry, calculated as cash distributions as a percentage of FFO/AFFO. Management considers the cash 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 GAAP measure.
(6) Debt-to-gross book value is a non-IFRS financial measure widely used in the real estate industry. 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.
(7) 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. 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.
(8) Represents the weighted average effective interest rate for secured debt excluding debentures and credit facilities.

"Partners' results for the second quarter of 2016 serve as evidence of the measured improvement taking place throughout our business," stated Jane Domenico, the REIT's CEO. "With a secure operational foundation now in place, we anticipate that we will continue to generate gradual improvements moving forward. These improvements will be aided by the internalization of this property management function west of Quebec, which was completed during the second quarter, and the consolidation of our property management services in Quebec, which took place on August 1. Although the Canadian retail real estate landscape remains challenging, I am confident that these steps, our focus on our existing property portfolio, and our superior tenant service will allow us to continue to grow unitholder value."

Further Information

A more detailed analysis of the REIT's financial results for the second quarter is 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 8:30 AM Eastern on August 4, 2016, at which time the REIT's management will both review these financial results and discuss the REIT's strategic outlook.

Conference Dial-In Details
Toll Free (North America): 866-223-7781
Local: 416-340-2216
Instant Replay Details (Available until August 11, 2016)
Toll Free (North America): 800-408-3053
Passcode: 4498252
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 36 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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