|By Marketwired .||
|November 9, 2012 07:51 PM EST||
VICTORIA, BRITISH COLUMBIA -- (Marketwire) -- 11/10/12 -- Partners Real Estate Investment Trust (TSX:PAR.UN) announced today continued strong growth and solid performance for the three and nine months ended September 30, 2012.
Q3 FINANCIAL HIGHLIGHTS (Q3/2012 vs Q3/2011):
-- NOI up 83% to $7.6 million; -- NOI (same property) increased by 3% to $3.9 million; -- FFO/unit rose to $0.18 from $0.16; -- FFO Cash Payout ratio decreases to 85%; -- AFFO/unit rose to $0.15 from $0.14; -- AFFO Cash Payout ratio decreases to 98%; -- Leverage ratios improved as debt/GBV (including debentures) fell from 73% to 62% and debt/GBV (excluding debentures) fell from 63% to 48%; -- Total assets increased by over 70% to $442 million; -- Total market capitalization increases by 249% to $186 million.
2012 OPERATIONAL HIGHLIGHTS:
-- Purchase of nine retail and mixed use properties year-to-date for total acquisition costs of $143.5 million significantly expands and strengthens portfolio; -- Portfolio growth and solid increase in year-to-date same property Net Operating Income fuel significant and accretive increases in Funds from Operations and Adjusted Funds from Operations; -- Successful completion of two bought deal equity offerings and convertible unsecured debenture issue raise $75.5 million in net proceeds to fund growth; -- Balance sheet and liquidity position remain strong with conservative debt and coverage ratios. -- New 15-year lease with Wal-Mart Canada significantly enhances overall quality of tenant base.
"We are now beginning to see the considerable benefits of our portfolio growth as we generated solid increases in our key operating and financial performance metrics during the third quarter," commented Adam Gant, Chief Executive Officer. "Our strong 3% growth in same property NOI, combined with the contribution from recent acquisitions, resulted in FFO and AFFO more than tripling in the quarter compared to last year and a solid increase from the second quarter of 2012."
"Most importantly, despite the significant increase in the weighted average number of units outstanding this year, our growth has been highly accretive as FFO per Unit and AFFO per Unit rose 13% and 17% respectively through the first nine months of 2012."
During the first nine months of 2012 the REIT acquired nine well-located retail and mixed-use properties in British Columbia, Alberta, Ontario and Quebec aggregating approximately 569,000 square feet of gross leasable area ("GLA") for a total purchase price of approximately $143.5 million. The acquisitions were funded by the a new credit facility of $14.0 million bearing interest at 3.6%, the acquisition of new and the assumption of existing mortgages totaling $66.4 million bearing effective interest rates of between 3.58% and 4.3%, $56.2 million in proceeds from the acquisition of NorRock Realty Finance Corporation in the first quarter of 2012, and a portion of the net proceeds from two equity offerings completed on February 8, 2012 and June 13, 2012. During the third quarter proceeds from the REIT's convertible debenture offering were used to repay the credit facility and the REIT secured a new variable-rate, revolving credit facility in order to fund future acquisitions.
With these acquisitions, the REIT's portfolio at September 30, 2012 consisted of 30 well-located retail and mixed-use properties in Ontario, Quebec, Manitoba, British Columbia and Alberta aggregating approximately 2.2 million square feet of GLA.
Subsequent to the end of the third quarter the REIT announced it would be acquiring two retail centres in Montreal aggregating approximately 105,000 square feet for a purchase price of approximately $21.9 million.
Strong Operating Performance
Weighted average occupancy at September 30, 2012 was 96.4%, up from 94.1% at the end of the second quarter of 2012 and compared to 98.2% at the same time last year. The increase from the second quarter of 2012 is due to improved leasing across the portfolio, offset by lower occupancies at certain recently acquired properties and vacancies at certain other properties due to ongoing re-positioning and redevelopment initiatives.
Net Operating Income ("NOI") increased to $7.6 million and $20.7 million in the third quarter and first nine months of 2012, respectively, compared to $4.1 million and $10.8 million in the prior year due primarily to the contribution from acquisitions completed over the prior twelve months. Same property NOI in the third quarter increased a strong 3.0% due primarily to increased rent at a Quebec property resulting from a new lease with Wal-Mart. For the nine months of 2012, same property NOI rose approximately 1.4% due primarily to higher occupancies and increased base rent revenue.
Funds from Operations ("FFO") increased to $3.7 million ($0.18 per unit) and $9.7 million ($0.53 per unit) for the three and nine months ended September 30, 2012, respectively, compared to $1.3 million ($0.16 per unit) and $3.6 million ($0.47 per unit) for the same comparable periods last year. The increases were due primarily to the contribution from acquisitions completed over the prior twelve months. The REIT's FFO cash payout ratio improved to 85% and 87% in the three and nine months ended September 30, 2012, respectively, compared to 92% and 98% in the same periods last year.
Adjusted Funds from Operations ("AFFO") also rose significantly to $3.3 million ($0.15 per unit) and $8.6 million ($0.48 per unit) for the three and nine months ended September 30, 2012, respectively, from $1.1 million ($0.14 per unit) and $3.2 million ($0.41 per unit) for the same prior-year periods. The AFFO cash payout ratio improved to 98% and 97% in the three and nine months ended September 30, 2012, respectively, compared to 106% and 111% in the same periods last year.
The REIT's growth has been accretive on a per Unit basis through the first nine months of 2012 despite the 135% increase in the weighted average number of units outstanding as at September 30, 2012 compared to the same time last year.
Management remains committed to actively pursuing new leases and lease renewals with the objective of increasing occupancy and weighted average rental income per square foot of gross leasable area. One of the REIT's goals is to generate organic growth through redevelopment and lease renewal activities at its existing centres. As at November 8, 2012 the REIT had lease renewals and new leases of approximately 203,600 square feet. The weighted average rent, including any material new and renewed leases completed by November 8, 2012, was $11.25 per square foot, an increase of $0.77 per square foot from the weighted average rent for leases that expire during the year.
Solid Financial Position
As at September 30, 2012 the REIT's ratio of debt to gross book value improved to 48.3% (62.0% including convertible debentures) compared to 62.9% (73.0% including convertible debentures) at December 31, 2011. Interest coverage and debt service coverage ratios improved to 2.08 times and 1.44 times, respectively, as at September 30, 2012 from 1.70 times and 1.26 times as at December 31, 2011. During the first nine months of 2012 the REIT acquired, assumed and increased mortgages totaling approximately $66.4 million on properties acquired during the period. Overall, the REIT's mortgage portfolio incurred a weighted average effective interest rate of 4.64% at September 30, 2012, an improvement from the 4.95% as at December 31, 2011, with a weighted average term to maturity of approximately 3 years. Over the next two years, the REIT has approximately $45.9 million of debt maturing which carries an average effective interest rate of 5.14%. Management expects to refinance this debt at lower interest rates, positively impacting the REIT's future cash flows. Interest expense savings from refinancing at current market rates are anticipated to continue through 2012 and into the following year.
On September 5, 2012, the REIT closed a public offering of $34.5 million, including an overallotment options, of 6.0% convertible unsecured subordinated debentures maturing on September 30, 2017. The debentures are convertible into units of the REIT at the option of the holder at a conversion price of $10.35 per unit. The REIT received net proceeds of approximately $32.7 million from the offering, which was used to partially repay the outstanding credit facilities.
During the third quarter, the REIT secured a revolving credit facility from a consortium of Canadian chartered banks of up to a formula-based maximum not to exceed $20 million (expandable to $50 million), bearing interest at the bank's prime rate plus 1.0% per annum or the Banker's Acceptance stamping fee plus 2.25% per annum. This facility is currently secured by the King George Square and Crossing Bridge Square properties. As at September 30, 2012, the formula-based amount available under this facility was $15.0 million with no draws made. The facility is renewable annually.
On October 1, 2012 the REIT announced it had agreed to acquire two well-located retail centres situated in close proximity on Nun's Island in Montreal, Quebec. The Centre Village Shopping Centre is a 95,000 square foot retail property anchored by a Loblaws grocery store and a newly-expanded SAQ liquor store, as well as a Royal Bank and a new Starbucks coffee shop. Centre Village is 97% leased. Elgar Place, located nearby, is an 80% occupied 10,000 square foot retail centre anchored by a Couche-Tard convenience store. The REIT will pay approximately $21.9 million for the two properties, utilizing the REIT's credit facility. The two centres are estimated to generate current in-place annualized Net Operating Income of approximately $1.4 million and $0.6 million in annualized Funds from Operations. The transaction is expected to close during the fourth quarter of 2012.
On October 9, 2012 the REIT announced it had entered into a new fifteen-year lease agreement with Wal-Mart Canada Corp. for approximately 90,000 square feet (plus basement storage space) at the REIT's Mega Centre retail property in St. Laurent, (Montreal) Quebec. It is anticipated the new Wal-Mart store will open by the second quarter of 2013
The REIT also announced today that it has agreed to acquire a 43,774 square foot, new format retail centre in Timmins, Ontario. The Timmins West Power Centre is a 100% leased, open-air centre, shadow-anchored by Canadian Tire and Home Depot. The property includes three separate buildings individually occupied by Michaels, Mark's Work Wearhouse, and Reitmans.
The purchase price for the property is approximately $9.95 million, which will be funded by way of assumption of a first mortgage from a Canadian bank for $4.94 million at a rate of 5.998%, maturing in September 2018, where a mark- to-market adjustment to the price of $215,600 was made resulting in an effective rate of approximately 4%, and utilization of the REIT's credit line. The in-place net operating income of $805,000 provides an implied CAP rate of 8.09% and will produce Funds from Operations of approximately $425,000. This new property provides the REIT an opportunity to acquire a stable, accretive, new format retail centre.
The REIT also announced that the Board of Trustees, based on the recommendation of its Audit Committee, has appointed KPMG LLP ("KPMG") as the auditor of the REIT. At the request of the REIT, Deloitte & Touche LLP ("Deloitte") has resigned as the auditor of the REIT.
There were no reservations in Deloitte's audit reports for the fiscal years ended December 31, 2011 and 2010 or any subsequent period, and there are no reportable events, as such term is defined in National Instrument 51-102, between the REIT and Deloitte. The REIT will be filing the required reporting package in accordance with National Instrument 51-102.
Investor Conference Call
A conference call to discuss the recent operating and financial results will be hosted by Adam Gant, Chief Executive Officer and Patrick Miniutti, President, on Tuesday, November 13, 2012 at 2:30 pm ET (11:30 am PT). The telephone numbers for the conference call are Local / International: (416) 849-2698 and North American Toll Free: (866) 400- 2270. The telephone numbers to listen to the call after it is completed (Instant Replay) are Local / International (416) 915-1035 or North American toll free (866) 245-6755. The Passcode for the Instant Replay is 601232#. A recording of the call will also be available on the REIT's web site at www.partnersreit.com.
Financial Highlights ---------------------------------------------------------------------------- As at and for the three As at and for the nine months ended months ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, Three months ended 2012 2011 2012 2011 ---------------------------------------------------------------------------- Revenues from income producing properties $ 11,195,642 $ 6,157,707 $ 31,575,199 $ 16,695,709 Net income and comprehensive income 3,526,175 2,113,239 10,715,642 4,192,601 Net income per unit - basic & diluted 0.16 0.27 0.59 0.54 NOI (1) 7,576,746 4,137,945 20,714,126 10,802,497 NOI - same property (1) 3,935,186 3,820,901 8,892,514 8,772,970 FFO(1) 3,749,640 1,262,428 9,686,097 3,602,159 FFO per unit(1) 0.18 0.16 0.53 0.47 AFFO(1) 3,265,885 1,098,450 8,648,584 3,168,978 AFFO per unit(1) 0.15 0.14 0.48 0.41 Distributions(2) 3,433,006 1,243,624 8,867,778 3,722,820 Distributions per unit(2) 0.16 0.16 0.48 0.48 Cash distributions(3) 3,200,629 1,162,701 8,405,749 3,526,056 Cash distributions per unit(3) 0.15 0.15 0.46 0.46 Cash distribution payout ratio(4) 85% / 98% 92% / 106% 87% / 97% 98% / 111% ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Sept. 30, Dec. 31, Sept. 30, As at 2012 2011 2011 ---------------------------------------------------------------------------- Total assets $442,496,388 $265,748,040 $256,486,723 Total debt(5) 280,307,968 202,592,032 197,559,240 Total equity 151,394,633 56,406,374 54,520,123 Weighted average units outstanding - basic 18,181,355 14,306,130 7,740,415 Debt-to-gross book value including debentures(5) 62.0% 73.0% 73.3% Debt-to-gross book value excluding debentures(5) 48.3% 62.9% 62.9% Interest coverage ratio(6) 2.08 1.70 1.65 Debt service coverage ratio(6) 1.44 1.26 1.26 Weighted average interest rate(7) 4.64% 4.95% 5.42% Portfolio occupancy 96.4% 98.0% 98.2% ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- 1. Net operating income or "NOI", funds from operations or "FFO", and adjusted funds from operations or "AFFO" 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 15thday 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. 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. 4. Cash distributions as a percentage of funds from operations/adjusted funds from operations. 5. See calculation under "Debt-to-Gross Book Value" in "Part III - Results of Operations." 6. Calculated on a rolling four-quarter basis. See definition under "Mortgages and Other Financing" in "Part III - Results of Operations". 7. Represents the weighted average effective interest rate for secured debt excluding debentures and credit facilities.
About Partners REIT
Partners REIT is a growth-oriented real estate investment trust, which currently owns (directly or indirectly) 30 retail properties located in Ontario, Quebec, Manitoba, Alberta and British Columbia aggregating approximately 2.2 million square feet of leasable space. Partners REIT focuses on expanding and managing a portfolio of retail and mixed-use community and neighbourhood shopping centres located in both primary and secondary markets across Canada.
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 the timing of the offering, success of the offering, listing of the units, use of proceeds of the Offering, 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.
Partners Real Estate Investment Trust
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.
Sep. 30, 2016 03:45 AM EDT Reads: 2,228
SYS-CON Events announced today that ReadyTalk, a leading provider of online conferencing and webinar services, has been named Vendor Presentation Sponsor at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. ReadyTalk delivers audio and web conferencing services that inspire collaboration and enable the Future of Work for today’s increasingly digital and mobile workforce. By combining intuitive, innovative tec...
Sep. 30, 2016 03:45 AM EDT Reads: 3,064
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
Sep. 30, 2016 03:15 AM EDT Reads: 1,747
WebRTC adoption has generated a wave of creative uses of communications and collaboration through websites, sales apps, customer care and business applications. As WebRTC has become more mainstream it has evolved to use cases beyond the original peer-to-peer case, which has led to a repeating requirement for interoperability with existing infrastructures. In his session at @ThingsExpo, Graham Holt, Executive Vice President of Daitan Group, will cover implementation examples that have enabled ea...
Sep. 30, 2016 03:00 AM EDT Reads: 1,624
There is growing need for data-driven applications and the need for digital platforms to build these apps. In his session at 19th Cloud Expo, Muddu Sudhakar, VP and GM of Security & IoT at Splunk, will cover different PaaS solutions and Big Data platforms that are available to build applications. In addition, AI and machine learning are creating new requirements that developers need in the building of next-gen apps. The next-generation digital platforms have some of the past platform needs a...
Sep. 30, 2016 03:00 AM EDT Reads: 1,933
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, provided tips on how to be successful in large scale machine learning...
Sep. 30, 2016 02:45 AM EDT Reads: 2,426
In his session at @ThingsExpo, Kausik Sridharabalan, founder and CTO of Pulzze Systems, Inc., will focus on key challenges in building an Internet of Things solution infrastructure. He will shed light on efficient ways of defining interactions within IoT solutions, leading to cost and time reduction. He will also introduce ways to handle data and how one can develop IoT solutions that are lean, flexible and configurable, thus making IoT infrastructure agile and scalable.
Sep. 30, 2016 02:15 AM EDT Reads: 1,635
SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...
Sep. 30, 2016 02:00 AM EDT Reads: 2,080
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
Sep. 30, 2016 12:45 AM EDT Reads: 2,980
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...
Sep. 30, 2016 12:00 AM EDT Reads: 2,381
IoT is fundamentally transforming the auto industry, turning the vehicle into a hub for connected services, including safety, infotainment and usage-based insurance. Auto manufacturers – and businesses across all verticals – have built an entire ecosystem around the Connected Car, creating new customer touch points and revenue streams. In his session at @ThingsExpo, Macario Namie, Head of IoT Strategy at Cisco Jasper, will share real-world examples of how IoT transforms the car from a static p...
Sep. 30, 2016 12:00 AM EDT Reads: 1,680
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.
Sep. 29, 2016 11:30 PM EDT Reads: 1,217
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Sep. 29, 2016 10:30 PM EDT Reads: 4,060
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, will discuss the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports. The session will include a working demo and a technical d...
Sep. 29, 2016 10:00 PM EDT Reads: 1,817
Developing software for the Internet of Things (IoT) comes with its own set of challenges. Security, privacy, and unified standards are a few key issues. In addition, each IoT product is comprised of (at least) three separate application components: the software embedded in the device, the back-end service, and the mobile application for the end user’s controls. Each component is developed by a different team, using different technologies and practices, and deployed to a different stack/target –...
Sep. 29, 2016 08:45 PM EDT Reads: 1,556
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.
Sep. 29, 2016 06:15 PM EDT Reads: 3,732
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management solutions, helping companies worldwide activate their data to drive more value and business insight and to transform moder...
Sep. 29, 2016 05:15 PM EDT Reads: 2,865
Personalization has long been the holy grail of marketing. Simply stated, communicate the most relevant offer to the right person and you will increase sales. To achieve this, you must understand the individual. Consequently, digital marketers developed many ways to gather and leverage customer information to deliver targeted experiences. In his session at @ThingsExpo, Lou Casal, Founder and Principal Consultant at Practicala, discussed how the Internet of Things (IoT) has accelerated our abil...
Sep. 29, 2016 04:45 PM EDT Reads: 2,808
SYS-CON Events has announced today that Roger Strukhoff has been named conference chair of Cloud Expo and @ThingsExpo 2016 Silicon Valley. The 19th Cloud Expo and 6th @ThingsExpo will take place on November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. "The Internet of Things brings trillions of dollars of opportunity to developers and enterprise IT, no matter how you measure it," stated Roger Strukhoff. "More importantly, it leverages the power of devices and the Interne...
Sep. 29, 2016 04:45 PM EDT Reads: 3,482
Digital innovation is the next big wave of business transformation based on digital technologies of which IoT and Big Data are key components, For example: Business boundary innovation is a challenge to excavate third-party business value using IoT and BigData, like Nest Business structure innovation may propose re-building business structure from scratch, as Uber does in the taxicab industry The social model innovation is also a big challenge to the new social architecture with the design fr...
Sep. 29, 2016 04:30 PM EDT Reads: 1,356