Granite Announces 2019 Second Quarter Results

TORONTO, July 31, 2019

HIGHLIGHTS

Highlights for the three month period ended June 30, 2019, including events subsequent to the quarter, are set out below:

• Granite's net income attributable to stapled unitholders decreased to $98.7 million in the second quarter of 2019 from $149.2 million in the prior year period primarily due to a decrease in net fair value gains on investment properties;
  
  
• Funds from operations ("FFO")⁽¹⁾ was $43.1 million ($0.89 per unit) in the second quarter of 2019 compared to $37.6 million ($0.82 per unit) in the second quarter of 2018;
  
  
• Adjusted funds from operations ("AFFO")⁽²⁾ was $42.3 million ($0.88 per unit) in the second quarter of 2019 compared to $29.4 million ($0.64 per unit) in the second quarter of 2018;
  
  
• AFFO payout ratio⁽³⁾ was 83% for the second quarter of 2019, a decrease from 99% in the second quarter of 2018;
  
  
• Granite's net operating income ("NOI")⁽⁴⁾ was $59.1 million in the second quarter of 2019 compared to $54.7 million in the prior year period. Same property NOI — cash basis⁽⁵⁾ increased by 0.6% for the three month period ended June 30, 2019, excluding the impact of foreign exchange (2.8% year-to-date June 30, 2019);
  
  
• On April 9, 2019, Granite acquired the leasehold interest in two fully leased properties located in Mississauga, Ontario for total consideration of $153.6 million at an in-going yield of 4.5% and a weighted average lease term of 8.7 years;
  
  
• On May 23, 2019, Granite acquired a 36' clear height distribution centre in Columbus, Ohio for total consideration of $71.6 million (US$53.2 million) at an in-going yield of 5.7%. This 100% leased state of the art facility was completed in 2018 and can be expanded by approximately 0.2 million square feet, providing attractive site flexibility and growth potential;
  
  
• On July 1, 2019, Granite, in partnership with NorthPoint Development, acquired a 191-acre greenfield site in Houston, Texas for $33.4 million (US$25.4 million) for the future development of up to a 2.5 million square foot business park capable of accommodating buildings ranging from 0.3 million to 1.2 million square feet. Speculative construction of the initial phase, consisting of two buildings totaling 0.6 million square feet, is anticipated to begin in the third quarter of 2019. The project is expected to generate a development yield spread of greater than 200 basis points;
  
  
• On July 8, 2019, Granite acquired a 0.3 million square foot fully leased distribution centre in Born, Netherlands for $25.7 million (€17.5 million) at an in-going yield of 6.1% and with a weighted average lease term of 7.6 years;
  
  
• On July 17, 2019, Granite agreed to acquire a 0.3 million square foot, 32' clear height distribution centre in Horn Lake, Mississippi, for total consideration of $24.0 million (US$18.5 million) at an in-going yield of 5.7%, which is 100% leased with a remaining weighted average lease term of 4.8 years. The acquisition is subject to customary closing conditions and is expected to close in the third quarter of 2019; and
  
  
• On April 30, 2019, Granite completed an offering of 3,749,000 stapled units at a price of $61.50 per unit for net proceeds of $220.4 million, including 489,000 stapled units issued pursuant to the exercise of the over-allotment option granted to the underwriters.

GRANITE'S FINANCIAL, OPERATING AND PROPERTY HIGHLIGHTS