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Mittwoch, 11.05.2016 15:35 von PR Newswire | Aufrufe: 66

H&R REIT Announces First Quarter 2016 Results

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Canada NewsWire

TORONTO, May 11, 2016

TORONTO, May 11, 2016 /CNW/ - H&R Real Estate Investment Trust ("H&R REIT" or the "REIT") and H&R Finance Trust (collectively, "H&R") (TSX: HR.UN; HR.DB.D; HR.DB.E and HR.DB.H) today announced its financial results for the three months ended March 31, 2016.

Financial Highlights

3 months ended March 31

2016

2015

Rentals from investment properties (millions)

$303.4

ARIVA.DE Börsen-Geflüster

Kurse

H & R REIT 6.65% DEBS.

0,00%

H&R Real Estate Investment Trust

0,00%

HR REIT 4.50 PCT SER E DEBS

0,00%

HR REIT 5.90 PCT CONV DEBS

0,00%

HR.DB.H

0,00%

$299.3

Property operating income (millions)

$167.9

$170.2

Funds from Operations ("FFO") (millions)⁽¹⁾

$147.6

$139.9

FFO per Stapled Unit (basic)

$0.50

$0.48

FFO per Stapled Unit (diluted)

$0.49

$0.47

Cash provided by operations (millions)

$152.2

$179.9

Distributions per Stapled Unit

$0.34

$0.34

Payout ratio per Stapled Unit (as a % of FFO)

68.0%

70.8%

⁽¹⁾	H&R's combined MD&A includes a reconciliation of property operating income to FFO. Readers are encouraged to review the reconciliation in the combined MD&A.

The REIT's adoption of International Financial Reporting Standards ("IFRS") Interpretations Committee 21, Levies ("IFRIC 21") has resulted in the entire year's property taxes for the REIT's U.S. properties all being recorded in Q1 of the related year. The impact of the adoption of this policy is a reduction in property operating income of $28.5 million and $25.5 million for the three months ended March 31, 2016 and March 31, 2015, respectively.

Operating Highlights

Occupancy as at March 31, 2016 was 95.8% compared to 97.6% as at March 31, 2015. The decrease is largely due to lower occupancy in Primaris malls where Target Canada Co. ("Target") disclaimed their leases. Despite the drop in occupancy, FFO per unit increased by 4% primarily due to lease termination payments of $4.9 million and the stronger U.S. dollar. Leases representing only 2.3% of total rentable area will expire during the remainder of 2016. H&R REIT's average remaining lease term to maturity as at March 31, 2016 was 10.0 years.

Target Update

As at March 31, 2016, the former Target stores have not been transferred to properties under development and H&R has not capitalized any of the property operating or finance costs attributable to this space. The following table is a summary of our leasing progress on the former Target space:

	Square Feet at 100%	Square Feet at H&R's Interest	Annual Base Rent at H&R's interest ($ Millions)
Former Target Canada space	1,062,676	831,688	$4.4
Backfill progress:
Committed space	179,001	99,851	1.3
Conditional agreements	482,373	433,407	5.3
Advanced discussions	140,713	110,213	2.7
Total backfill progress	802,087	643,471	$9.3
Space currently being marketed	36,713	30,029	TBD
Total gross leasable area ("GLA") upon completion of redevelopment	838,800	673,500
Potential GLA converted for landlord uses (common area etc.)⁽¹⁾	143,278	117,890	N/A
Space for demolition/potential redevelopment	80,598	40,299	N/A
Total	1,062,676	831,689

⁽¹⁾Represents square footage based on current redevelopment plans and is subject to change based on tenant demand.

H&R expects that, once the above leasing is complete, the new tenants will contribute approximately $9.3 million or 211% of the total base rental revenue lost through Target's departure. H&R expects most of these leases will be binding by the end of 2016, subject to development permits, with occupancy occurring between October 2016 and the end of 2017. The cost of subdividing and re-leasing the premises is expected to be approximately $109.0 million at the REIT's ownership interest. The potential lease settlement from Target has not been accrued in the Trust's financial statements.

Development Highlights

Construction is progressing on the development of 1,871 rental units in Long Island City, NY ("LIC Project"), in which the REIT has a 50% interest and Tishman Speyer is the operating partner. The total budget at the 100% ownership level is expected to be approximately U.S. $1.2 billion with occupancy scheduled to begin in late 2017. Construction financing for up to U.S. $640 million has been secured through a syndicate of lenders co-led by two U.S. banks. As a condition to the financings, the REIT will have to contribute a further U.S. $18.3 million to the project which will increase its total investment to U.S. $260.6 million. Approximately 74.7% of total hard costs and 68.9% of total project costs have been fixed.

In Q1 2016, the REIT entered into two separate 15-year build-to-suit leases for industrial properties to be developed at the Airport Road Business Park in Brampton, ON, adjacent to the Unilever project, for Sleep Country Canada and Solutions 2 Go Inc. The total net leasable area for these properties is expected to be 341,775 square feet. Occupancy of both projects is expected to occur in Q1 2017, which will conclude the development of this parcel of land.

Alberta Exposure

The REIT's properties in Alberta comprise 27.6% of the REIT's adjusted same-asset property operating income, which is further discussed by segment below.

Alberta Office Segment:
The REIT has interests in five office properties in Alberta. They collectively comprised 17.3% of the REIT's adjusted same-asset property operating income in Q1 2016. As can be seen from the chart below, these tenants are some of the strongest companies in the energy sector and their average remaining lease term is 17.5 years.

Address

City

Total GLA

(Sq.Ft.)

Ownership

Interest

GLA at REIT's

Interest (Sq.Ft.)

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