MISSISSAUGA, ON, Feb. 15, 2017
MISSISSAUGA, ON, Feb. 15, 2017 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to announce its 2016 annual financial results. These results have been prepared in accordance with International Financial Reporting Standards ("IFRS").
The Trust's fully diluted FFO for the three months ended December 31, 2016, was $29.3 million or $0.44 per unit. This is a decrease of $0.01 per unit over the same period in 2015. The decrease is largely the result of adjustments recorded to interest expense as a result of the announced redemption of the 2012 convertible debentures. These adjustments negatively impacted FFO $1.1 million or $0.02 per unit.
Total net operating income for the three months ended December 31, 2016, was $43.7 million, a decrease of $0.9 million over the same period in 2015. The Trust's same asset NOI of $43.0 million for the three months ended December 31, 2016, is favourable by $0.5 million compared to the same period in 2015.
The increase in the Trust's same asset NOI derive largely from the office portfolio. In addition to higher rents ($0.4 million) due to higher occupancy, lower operating expenses have allowed the Trust to accelerate the recovery of maintenance projects completed in prior years ($0.3 million). During the quarter, the Trust completed over 155,000 square feet of leasing in the office portfolio.
In the retail portfolio, the Trust has continued to advance lease commitments and construction contracts associated with the vacated Target Canada space. Target Canada's exit has ultimately reinforced the Trust's overall rent roll with strong, well established national retail operators. These include Walmart, Canadian Tire, Lowes, Sobeys, GoodLife Fitness, Marshall's, Urban Planet, Ardene and Cara Foods (Harvey's, Swiss Chalet, East Side Mario's and Fionn MacCool's).
As at January 1, 2017, the Trust has entered into binding contracts on nine leases that recycle 66% of the gross leasable area previously occupied and replaced approximately 115% of the baseline revenue lost from the major retailer's departure. The re-purposing of the rental space has resulted in the creation of expanded mall corridors and additional pro forma commercial retail unit ("CRU") income generating bays that, coupled with enhanced operating cost contributions, will improve the mall experience and strengthen the overall occupancy cost profile. Current pro forma projections suggest a 96% utilization factor on the former anchor premises and, moreover, replacement of almost 200% of the total base rent contributed by Target Canada.
Net Operating Income, Funds from Operations
This press release and accompanying financial information make reference to net operating income and funds from operations on a total and per unit basis. Net operating income is defined as income from property operations after operating expenses have been deducted, but prior to deducting interest expense, general and administrative expenses and fair value gains/(losses). Funds from operations is defined as net income prior to extraordinary items, valuation adjustments, and certain other non-cash items, if any. Funds from operations is not a term defined under IFRS and may not be comparable to similar measures used by other Trusts.
Financial Statements and Management's Discussion and Analysis
The Trust's 2016 Consolidated Financial Statements and Management's Discussion and Analysis along with its 2015 Annual Report are available on the Trust's website at www.morguard.com and have been filed with SEDAR at www.sedar.com
Conference Call Details:
Thursday, February 16, 2017 at 4:00 p.m. (ET)
647-427-7450 or 1-888-231-8191
About Morguard Real Estate Investment Trust
The Trust is a closed-end real estate investment trust, which owns a diversified portfolio of 49 retail, office and industrial income producing properties in Canada with a book value of $2.9 billion and approximately 8.7 million square feet of leasable space.
SOURCE Morguard Real Estate Investment Trust