Melcor REIT Announces 2013 Annual Results Exceeding Forecast; Forecast Revised Upward
10 Marzo 2014 - 6:32PM
Marketwired
Melcor REIT Announces 2013 Annual Results Exceeding Forecast;
Forecast Revised Upward
EDMONTON, ALBERTA--(Marketwired - Mar 10, 2014) - Melcor REIT
(TSX:MR.UN) -
Annual Highlights |
|
Nine-month Forecast Highlights |
• |
Rental Revenue of $39.33 million for growth of 5% over 2012. |
|
• |
Rental Revenue of $29.64 million, exceeding forecast by 4% |
|
|
|
|
|
• |
Net rental income of $23.40 million for growth of 6% over
2012. |
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• |
Net rental income of $17.55 million, exceeding forecast by 6% |
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|
|
|
|
• |
Fair value gains of $16.95 million resulted in a 4% increase in the
fair value of our portfolio over December 31, 2012. |
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• |
Adjusted funds from operations (AFFO) of $10.49 million or $0.56
per unit, exceeding forecast by 5%. |
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|
|
|
|
• |
Debt to Gross Book Value (GBV) ratio of 51%, within our target
range of 50%-55%. |
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• |
Distributions of $0.05625 per trust unit (as forecast) were paid in
each of the REIT's eight months of operations. |
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|
|
|
|
• |
Gross leasable area increased by 8% through two property
acquisitions completed during the year. A third property was added
to our portfolio subsequent to year-end, increasing our GLA by 12%
since IPO. |
|
|
Comparison to the forecast period (April - December 2013) is
presented above. In the prospectus dated April 19, 2013, a 12-month
forecast (April 2013 to March 2014) was presented. |
Melcor REIT
announced results for the fourth quarter and year ended December
31, 2013. For the twelve-month period ending March 31, 2014 we will
be comparing our results to the financial forecast disclosed in our
prospectus dated April 19, 2013, which is available on SEDAR at
www.sedar.com.
Darin Rayburn, CEO of Melcor REIT commented: "Since our IPO,
we've been focused on delivering the results we promised to you.
I'm very pleased to report strong results for 2013 that do just
that: we've not only delivered as promised, we exceeded forecast on
all significant measures. Strong leasing activity and successful
property acquisitions contributed to these results and position us
for continued growth in 2014 and beyond."
Rayburn continued:
"Today, there are many positive factors that will continue to shape
our growth and our future. We have a well established and
diversified portfolio of assets in high growth Western Canadian
markets. We have a solid pipeline of high quality assets being
developed over the next 5 - 10 years. We have an exceptional and
experienced team managing and leasing our properties and overseeing
strategic investment in our assets to maximize their potential. We
remain confident in our future and our ability to continue to
deliver results and consistent returns to unitholders."
Financial Highlights
for the year include:
- Successful IPO of Melcor REIT and acquired 27 income-producing
properties representing 1.57 million sq. ft. from Melcor. The REIT
raised gross proceeds of $91.3 million through the issuance of
9,130,000 units.
- The successful execution of operational strategies contributed
to:
- 5% growth in both revenue and NOI over 2012. Revenue growth was
driven by higher average base rent (per sq. ft.), increase in GLA
following two property acquisitions in 2013, and other revenues.
Revenue growth outpaced the increase in direct operating expenses
resulting in NOI growth over 2012.
- FFO and AFFO 6% and 5% ahead of forecast, respectively. The
increase reflects higher NOI achieved. Please refer to the
Operational Highlights below for additional information on the
factors that contributed to our financial results.
Selected Financial
Information
Financial Highlights |
|
|
Year |
Three-months |
|
Financial |
|
|
ended |
ended |
|
Forecast* |
|
($000s) |
2013 |
Q4 - 2013 |
|
Q4 - 2013 |
|
Non-Standard Key Performance Indicators** |
|
|
|
|
|
Rental revenue |
39,325 |
10,070 |
|
9,556 |
|
Net
rental income |
23,395 |
5,696 |
|
5,612 |
|
Net
operating income (NOI) |
25,295 |
6,231 |
|
6,212 |
|
Same
asset NOI |
22,457 |
5,172 |
|
n/a |
|
Funds
from Operations (FFO) |
15,903 |
3,723 |
|
3,941 |
|
Adjusted Funds from Operations (AFFO) |
13,916 |
3,344 |
|
3,518 |
|
|
|
|
|
|
|
Per unit metrics(1) |
|
|
|
|
|
FFO |
0.85 |
0.20 |
|
0.21 |
|
AFFO |
0.75 |
0.18 |
|
0.19 |
|
Distributions |
0.450 |
0.169 |
|
0.169 |
|
*Financial forecast is for the three-months ended
December 31, 2013. |
|
**Refer to the following section, Non-Standard
Measures, for metric information. |
|
|
|
31-Dec-13 |
|
31-Dec-12 |
|
Total
assets ($000s) |
|
454,743 |
|
396,845 |
|
Debt
($000s)(2) |
|
215,601 |
|
180,002 |
|
Debt to GBV ratio |
|
51 |
% |
46 |
% |
(1) |
Calculated as if the trust units and Class B LP Units were
outstanding during the entire current and comparative periods. |
(2) |
Calculated as the sum of total amount drawn on revolving credit
facility, mortgages payable and Class C LP Units, excluding
unamortized fair value adjustment on Class C LP Units. |
Operational
Highlights for the year include:
- Executed the strategy through the first eight-months of
operations, leading to financial and operating results which
exceeded forecast. These strategies include:
- Focus on leasing programs and strong leasing activity, leading
to increased rental rates on new and renewed leases signed in 2013.
In conjunction with higher rates on leases with escalating rent
leases, this led to a 7% increase in weighted average base
rent.
- Growth through acquisition: Completed three acquisitions, which
diversified our portfolio and increased GLA by 8% since the IPO on
May 1, 2013. With an additional acquisition in January 2014, GLA
has grown by 12% since the IPO. These accretive income producing
properties were (purchase price excludes closing costs):
- Coast Home Centre, Q3-2013: a 59,725 sq. ft. retail property in
Edmonton for $12.30 million.
- Liberty Crossing, Q4-2013: a 63,317 sq. ft. retail property in
Red Deer for $13.25 million.
- LC Industrial, Q1-2014: a 67,610 sq. ft. industrial warehouse
in Lethbridge for $5.93 million (subsequent event).
- Asset enhancement: Completed substantial redevelopment of two
office properties, leading to significantly increased occupancy for
these properties.
Selected Operational
Information
Operational Highlights |
|
|
31-Dec-13 |
|
31-Dec-12 |
|
Number of properties |
29 |
|
27 |
|
Gross
Leasable Area (GLA) (sq. ft.) |
1,691,920 |
|
1,571,474 |
|
Occupancy % (weighted GLA) |
91 |
% |
91 |
% |
Weighted average base rent (per sq. ft.) |
$17.49 |
|
$16.35 |
|
Re-forecast
Q1-2014
Based on our results
to date and the additional properties acquired, management has
revised the forecast for the remaining three months of the forecast
period. The following summarizes the revised key metrics for
Q1-2014.
|
Revised |
Prospectus |
|
|
|
Forecast |
Forecast* |
% Change |
|
Net
rental income |
6,117 |
5,572 |
9 |
% |
Net
income and comprehensive income |
1,884 |
1,533 |
19 |
% |
Funds
from Operations (FFO) |
4,301 |
3,950 |
8 |
% |
Adjusted Funds from Operations (AFFO) |
3,795 |
3,516 |
7 |
% |
FFO |
0.23 |
0.21 |
9 |
% |
AFFO |
0.20 |
0.19 |
5 |
% |
*Prospectus forecast
is for the three months ended March 31, 2014 as included in our
prospectus dated April 19, 2013.
MD&A and
Financial Statements
Information included
in this press release is a summary of results. This press release
should be read in conjunction with Melcor REIT's 2013 Annual Report
to unitholders. Melcor REIT's consolidated financial statements and
management's discussion and analysis for the three-months and year
ended December 31, 2013 can be found on the REIT's website at
www.MelcorREIT.ca or on SEDAR (www.sedar.com).
Conference Call
& Webcast
Unitholders and
interested parties are invited to join CEO Darin Rayburn and CFO
Jonathan Chia on a conference call to be held Tuesday, March 11,
2014 at 9:00 AM ET. Call 416-340-8530 in the
Toronto area; 800-769-8320 toll
free.
The call will be
webcast at www.gowebcasting.com/5178. A replay of the call will be
available shortly after the call is concluded at the same
address.
Annual General
Meeting
We invite
unitholders to join us at Melcor REIT's annual meeting on April 24,
2014 at 9:00 am MDT. The meeting will be held in the Empire
Ballroom at the Fairmont Hotel Macdonald, 10065 - 100 Street NW,
Edmonton, Alberta. We look forward to seeing you there.
About Melcor
REIT
Melcor REIT is an
unincorporated, open-ended real estate investment trust. Melcor
REIT owns, acquires, manages and leases quality retail, office and
industrial income-generating properties with exposure to high
growth western Canadian markets. Its portfolio is currently made up
of interests in 30 properties representing approximately 1.76
million square feet of gross leasable area located across Alberta
and in Regina, Saskatchewan; and Kelowna, British Columbia. For
more information, please visit www.MelcorREIT.ca.
Non-Standard
Measures
NOI, FFO and AFFO
are key measures of performance used by real estate operating
companies; however, they are not defined by International Financial
Reporting Standards ("IFRS"), do not have standard meanings and may
not be comparable with other industries or income trusts. These
non-IFRS measures are more fully defined and discussed in the
REIT's Management Discussion and Analysis for the period ended
December 31, 2013, which is available on SEDAR at
www.sedar.com.
Forward-Looking
Statements:
This press
release may contain forward-looking information within the meaning
of applicable securities legislation, which reflects the REIT's
current expectations regarding future events. Forward-looking
information is based on a number of assumptions and is subject to a
number of risks and uncertainties, many of which are beyond the
REIT's control, that could cause actual results and events to
differ materially from those that are disclosed in or implied by
such forward-looking information. Such risks and uncertainties
include, but are not limited to, general and local economic and
business conditions; the financial condition of tenants; the REIT's
ability to refinance maturing debt; leasing risks, including those
associated with the ability to lease vacant space; and interest
rate fluctuations. The REIT's objectives and forward-looking
statements are based on certain assumptions, including that the
general economy remains stable, interest rates remain stable,
conditions within the real estate market remain consistent,
competition for acquisitions remains consistent with the current
climate and that the capital markets continue to provide ready
access to equity and/or debt. All forward-looking information in
this press release speaks as of the date of this press release. The
REIT does not undertake to update any such forward-looking
information whether as a result of new information, future events
or otherwise. Additional information about these assumptions and
risks and uncertainties is contained in the REIT's filings with
securities regulators.
Business Contact: Melcor REITDarin RayburnChief Executive
Officer780.423.6931info@melcorREIT.caInvestor Relations: Melcor
REITJonathan Chia, CAChief Financial
Officer780.423.6931ir@melcorREIT.cawww.MelcorREIT.ca
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