Partners Real Estate Investment Trust
TSX : PAR.UN

Partners Real Estate Investment Trust

November 05, 2015 17:52 ET

Partners Announces Results for the Third Quarter of 2015

BARRIE, ONTARIO--(Marketwired - Nov. 5, 2015) - Partners Real Estate Investment Trust (the "REIT," or "Partners") (TSX:PAR.UN) today announced its results for the three month period ended September 30, 2015 (the "third quarter").

THIRD QUARTER 2015 HIGHLIGHTS

  • Same property NOI was $8.5 million, a 4% increase when compared to the third quarter of 2014
  • Revenues from income producing properties were $14.3 million, a 1% decrease when compared to the third quarter of 2014. This decline is attributed to the sale of the three Canadian Tire properties.
  • FFO and AFFO per unit of $0.09 and $0.08, respectively, no change to FFO and a decrease of $0.02 per unit to AFFO, when compared to the third quarter of 2014. During 2015 the REIT implemented a $0.90 per square foot annual reserve for sustaining capital expenditures and this results in a larger deduction for these costs which lowers AFFO as compared to 2014's reported amounts.
  • AFFO payout ratio of 82%, a decrease from 84% during the third quarter of 2014.
  • Occupancy of 95.0% as at September 30, 2015, an increase when compared to both 94.6% as at June 30, 2015 and 94.3% as at December 31, 2014.
As at and for the three months ended As at and for the nine months ended
Sep 30, 2015 Sep 30, 2014 Sep 30, 2015 Sep 30, 2014
Revenues from income producing properties $ 14,334,061 $ 14,507,888 $ 42,714,770 $ 44,885,569
Net income (loss) 383,625 (12,464,313 ) (2,923,676 ) (24,071,909 )
Net income (loss) per unit - basic 0.01 (0.47 ) (0.11 ) (0.92 )
NOI - same property (1) 8,482,133 8,194,965 25,055,819 26,222,670
NOI - all property(1) 8,482,133 8,755,664 25,055,819 27,919,750
FFO(1) 2,444,179 2,458,189 6,982,684 8,448,127
FFO per unit(1) 0.09 0.09 0.26 0.32
AFFO(1) 2,033,857 2,619,091 6,480,438 8,554,241
AFFO per unit(1) 0.08 0.10 0.24 0.33
Distributions(2) 1,676,161 2,198,779 5,014,547 8,755,414
Distributions per unit(2) 0.06 0.08 0.19 0.33
Distribution payout ratio(3) 69% / 82% 89% / 84% 72% / 77% 104% / 102%
Cash distributions(4) 1,323,087 2,005,495 4,000,824 7,952,202
Cash distributions per unit(4) 0.05 0.08 0.15 0.30
Cash distribution payout ratio(5) 54% / 65% 82% / 77% 57% / 62% 94% / 93%
As at Sep 30, 2015 Dec 31, 2014 Sep 30, 2014
Total assets $ 537,539,331 $ 542,551,040 $ 558,778,156
Total debt(6) 386,631,900 381,967,023 394,301,960
Total equity 142,096,188 149,036,368 153,507,424
Weighted average units outstanding - basic 26,491,139 26,206,391 26,165,753
Debt-to-gross book value including debentures(6) 71.5% 69.9% 66.8%
Debt-to-gross book value excluding debentures(6) 55.6% 54.2% 52.3%
Interest coverage ratio(7) 1.70 1.84 2.09
Debt service coverage ratio(7) 1.13 1.24 1.36
Mortgages weighted average effective interest rate(8) 4.35% 4.43% 4.99%
Portfolio occupancy 95.0% 94.3% 96.0%
(1) NOI, NOI - same property, FFO and AFFO are non-IFRS financial measures widely used in the real estate industry. See "Part II - Performance Measurement" for further details and advisories. Prior year balances have been reclassified to conform with current year presentation. NOI - same property includes only those properties which have been owned by the REIT for a full current and prior year period.
(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 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. 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.
(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. 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.
(8) Represents the weighted average effective interest rate for secured debt excluding debentures and credit facilities.
(9) Certain comparative figures have been reclassified to conform with the current year's presentation.

"We are satisfied with Partners' third quarter results, which demonstrate the early signs of improvement within our business," stated Jane Domenico, the REIT's CEO. "Our payout ratio and overhead costs continue to stabilize, and the increase in our same property NOI is reflective of our efforts to improve the performance of our existing property portfolio. This improvement remains at the centre of our strategy for 2015. To date, we have focused on enhancing the appeal of our existing properties, placing the best possible tenants within those properties, and delivering those tenants the best possible service. Over the balance of 2015, we will expand the scope of our improvement efforts to include a thorough analysis of our cost structure. We believe this analysis will lead to further growth of our NOI, and a commensurate increase in unitholder value."

Further Information

A more detailed analysis of the REIT's 2015 financial results (including results for the three and nine months ended September 30, 2015) 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 November 6, 2015, at which time the REIT's management will both review these financial results and discuss their strategic outlook.

Conference Dial-In Details

Toll Free (North America): 866-223-7781

Local: 416-340-2216

Instant Replay Details (Available until November 13, 2015)

Toll Free (North America): 800-408-3053

Passcode: 7300542

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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