Allied Properties Real Estate Investment Trust ("Allied") (TSX:
"AP.UN") today announced results for the three months ended
June 30, 2024. “Our occupied and leased area remained steady
in the second quarter, and our urban office portfolio continued to
outperform the market,” said Cecilia Williams, President & CEO.
“With utilization and demand clearly rising in Montréal, Toronto,
Calgary and Vancouver, we expect our occupied and leased area to
reach a point of positive inflection by the end of the year.”
Operations
Utilization of urban office space is moving
steadily upward in Montréal, Toronto, Calgary and Vancouver. The
trend is evident throughout Allied’s workspace portfolio and
confirmed in numerous published reports. For example, Colliers’
Workplace Activity Tracker places utilization in early June of 2024
compared to November of 2019 at 66% for Downtown Montréal, 84% for
Downtown Toronto, 81% for Downtown Calgary and 70% for Downtown
Vancouver.
The upward utilization trend is consistent with
the intense utilization of storefront retail space in Allied’s
mixed-use, amenity-rich urban neighbourhoods in Montréal, Toronto,
Calgary and Vancouver. In the month of June, for example, The Well
had 829,058 recorded visits.
Allied conducted 262 lease tours in its rental
portfolio in the second quarter. Allied’s occupied and leased area
at the end of the quarter was 85.8% and 87.1%, respectively.
Occupied area remained above market occupancy in all urban markets
other than Vancouver, and occupied and leased area held steady for
the first time in six quarters with nearly 60% of the leases
maturing in the quarter being renewed, closer to Allied’s normal
level of 70% to 75%.
Allied leased a total of 469,375 square feet of
GLA in the second quarter, 444,963 square feet in its rental
portfolio and 24,412 square feet in its development portfolio. Of
the 444,963 square feet Allied leased in its rental portfolio,
163,873 square feet were vacant, 128,980 square feet were maturing
in the quarter and 152,110 square feet were maturing after the
quarter.
Average in-place net rent per occupied square
foot improved in the second quarter to $25.08. Allied continued to
achieve rent increases on renewal (up 9.7% ending-to-starting base
rent and up 16.2% average-to-average base rent).
Allied continues to focus on user experience for
the tens of thousands of people in Canada’s major cities who use
Allied workspace daily. On completing its fourth consecutive annual
user-experience assessment with Grace Hill KingsleySurveys late
last year, Allied exceeded industry averages materially in most
rating areas, including the all-important net promoter score, which
it exceeded by 250%. Management expects its focus on user
experience to support ongoing leasing efforts over the remainder of
2024 and into 2025.
Results
On April 1, 2024, Allied acquired a 90%
ownership interest in 400 West Georgia Street in Vancouver (“400
West Georgia”) and increased its ownership interest in 19 Duncan
Street in Toronto (“19 Duncan”) from 50% to 95%. Management
recognized that these portfolio-optimization transactions would put
temporary downward pressure on Allied’s FFO and AFFO per unit
pending lease-up of the remaining workspace at 400 West Georgia
(18% of GLA) and lease-up of the 464 rental-residential units at 19
Duncan (now underway).
Allied’s second-quarter results include the
impact of the portfolio-optimization transactions for a full
quarter. Operating income from continuing operations was $82
million, up 5% from the comparable quarter last year. Allied’s net
income and comprehensive income was $28 million, in large part due
to a fair value loss on investment properties flowing from declines
in development-property valuations.
FFO(1) was $73 million (52.6 cents per unit),
down 10.6% from $82 million (58.8 cents per unit) in the comparable
quarter last year. AFFO(1) was $67 million (47.7 cents per unit),
down 11.1% from $75 million (53.6 cents per unit) in the comparable
quarter last year. This resulted in FFO and AFFO pay-out ratios(1)
in the second quarter of 85.6% and 94.4%, respectively, and in the
first half of 81.5% and 88.8%, respectively.
Same Asset NOI(1) from Allied’s rental portfolio
was down 2.3% while Same Asset NOI from its total portfolio was up
1.7%, reflecting the productivity of its upgrade and development
portfolio.
The non-GAAP results that would have been
achieved in the quarter independently of the 400 West Georgia and
19 Duncan transactions were as expected by Management: FFO(2) would
have been $79 million (56.7 cents per unit), down 3.7% from $82
million (58.8 cents per unit) in the comparable quarter last year;
and (ii) AFFO(2) would have been $72 million (51.9 cents per unit),
down 3.3% from $75 million (53.6 cents per unit) in the comparable
quarter last year. This would have resulted in FFO and AFFO pay-out
ratios(2) in the second quarter of 79.4% and 86.8%, respectively,
and in the first half of 78.6% and 85.3%,
respectively._______________________________________(1) This is a
non-GAAP measure and includes the results of the continuing
operations and the discontinued operations (except for Same Asset
NOI, which only includes continuing operations) and excludes
condominium related items, financing prepayment costs, and the
mark-to-market adjustment on unit-based compensation. Refer to the
Non-GAAP Measures section below.(2) This is a non-GAAP measure and
includes the results of the continuing operations and the
discontinued operations and excludes condominium related items,
financing prepayment costs, the mark-to-market adjustment on
unit-based compensation and 400 West Georgia and 19 Duncan
transactions. Refer to the Non-GAAP Measures section below.
Portfolio and Balance-Sheet
Optimization
Allied’s mission is to serve knowledge-based
organizations ever more successfully over time. Its fundamental
strategy is to concentrate ownership and operation of distinctive
urban workspace in mixed-use, amenity-rich urban neighbourhoods in
Canada’s major cities and to upgrade its portfolio
continuously.
Allied has demonstrated commitment to the
balance sheet over its life as a public real estate entity. This is
both a fundamental principle of risk management and essential to
maintaining ongoing access to the bond market.
On August 16, 2023, Allied completed the sale of
its urban-data-centre portfolio for $1.35 billion, a sale price
meaningfully above IFRS value. In doing so, Allied accelerated an
ongoing process of portfolio and balance-sheet optimization. This
process continued in the first half of 2024.
Allied has now entered into a definitive
agreement to reorganize the ownership of TELUS Sky in Calgary,
bringing that development project to successful completion for all
concerned. Westbank and Allied will sell their respective 1/3
interests in the commercial component of TELUS Sky to TELUS, and
TELUS will sell its 1/3 interest in the residential component to
Westbank and Allied in equal shares, with the result that TELUS
will own 100% of the commercial component and Westbank and Allied
will own 100% of the residential component in equal shares. On
closing, expected to occur in the third quarter, Allied will
receive net proceeds of approximately $32 million.
Allied has also made rapid and material progress
in selling non-core properties at or above IFRS value. This
includes the pending sale of five properties in Montréal and two in
Toronto, which Management expects to complete in the second half of
2024.
All seven pending sales involve properties that
are smaller, and no property is part of a major concentration or
assembly of distinctive urban workspace in Allied’s portfolio. The
pricing of three properties reflects intensification potential,
which the private market is prepared to recognize, with the result
that the pricing is meaningfully above Allied’s IFRS value. The
pricing of the four remaining properties is based on capitalization
rates consistent with Allied’s IFRS value. The current yield to
Allied on the seven properties is low, with the result that the
proceeds can be used to reduce indebtedness in a manner that will
be accretive to Allied’s FFO and AFFO per unit.
Allied will apply the net proceeds of the TELUS
Sky transaction and the closing proceeds from the pending sales
(approaching the $200 million target established in the first
quarter) to accretive debt reduction with a view to offsetting the
temporary pressure on its FFO and AFFO per unit and its
debt-metrics flowing from the 400 West Georgia and 19 Duncan
transactions.
Over the remainder of 2024 and into 2025, Allied
intends to sell additional non-core properties at or above IFRS
value for proceeds of approximately $200 million. Given its
experience with the seven pending sales, all of which were
unsolicited and several of which attracted multiple offers,
Management is confident in its ability to achieve this target as
well.
Allied has two debt facilities maturing in 2025,
a $200 million unsecured debenture due on April 21, 2025 (the
“Debenture”), and a $400 million unsecured term loan due on October
22, 2025 (the “Term Loan”). Allied is working toward refinancing
the Debenture and the Term Loan in a manner that will prioritize
liquidity and continue the ongoing improvement in its
debt-metrics.
Allied has considerable optionality in
addressing the Debenture, the Term Loan and debt that matures in
2026. Allied’s options include various combinations of the
following: (i) utilizing proceeds from the TELUS Sky transaction
and the sale of non-core assets (up to $400 million in aggregate);
(ii) utilizing proceeds of secured financing on the residential
component of TELUS Sky (approximately $50 million); (iii)
successfully completing negotiations now underway for an extension
of the Term Loan; (iv) arranging secured financing on select
unencumbered properties; and (v) accessing the bond market on the
basis of a single solicited rating from Morningstar DBRS.
“We’re committed to maintaining and ultimately
improving our access to the bond market and will continue to manage
our balance sheet accordingly,” said Michael Emory, Founder &
Executive Chair. “We’re also committed to maintaining our monthly
distribution. These commitments are mutually reinforcing, well
within our operating capability and appropriately responsive to
equity and debt investors.”
Outlook
In the first half, Allied experienced steady
demand for urban workspace, urban rental-residential space and
urban amenity space, as well as strong and quantifiable engagement
among users of space in the Allied portfolio generally. Management
expects this to underpin operating and financial results in 2024
that will fully support Allied’s distribution commitment and
approach a point of positive inflection by the end of the year.
Financial Measures
The following tables summarize GAAP financial measures for the
three and six months ended June 30, 2024, and 2023:
| |
For the three months ended June 30 |
| (in
thousands except for % amounts) |
|
2024 |
|
|
2023 |
|
Change |
% Change |
|
Continuing operations |
|
|
|
|
|
Rental revenue |
$ |
146,750 |
|
$ |
136,137 |
|
$ |
10,613 |
|
7.8 |
% |
|
Property operating costs |
$ |
(64,359 |
) |
$ |
(58,037 |
) |
$ |
(6,322 |
) |
(10.9 |
)% |
|
Operating income |
$ |
82,391 |
|
$ |
78,100 |
|
$ |
4,291 |
|
5.5 |
% |
|
Interest income |
$ |
9,615 |
|
$ |
10,225 |
|
$ |
(610 |
) |
(6.0 |
)% |
|
Interest expense |
$ |
(29,932 |
) |
$ |
(26,797 |
) |
$ |
(3,135 |
) |
(11.7 |
)% |
|
General and administrative expenses
(1) |
$ |
(7,320 |
) |
$ |
(4,714 |
) |
$ |
(2,606 |
) |
(55.3 |
)% |
|
Condominium marketing expenses |
$ |
(65 |
) |
$ |
(192 |
) |
$ |
127 |
|
66.1 |
% |
|
Amortization of other assets |
$ |
(382 |
) |
$ |
(360 |
) |
$ |
(22 |
) |
(6.1 |
)% |
|
Net income from joint venture |
$ |
535 |
|
$ |
2,423 |
|
$ |
(1,888 |
) |
(77.9 |
)% |
|
Fair value loss on investment properties and investment
properties held for sale |
$ |
(44,983 |
) |
$ |
(73,471 |
) |
$ |
28,488 |
|
38.8 |
% |
|
Fair value gain on Exchangeable LP Units |
$ |
27,870 |
|
$ |
10,510 |
|
$ |
17,360 |
|
165.2 |
% |
|
Fair value (loss) gain on derivative
instruments |
$ |
(3,490 |
) |
$ |
15,357 |
|
$ |
(18,847 |
) |
(122.7 |
)% |
|
Impairment of residential inventory |
$ |
(6,177 |
) |
$ |
— |
|
$ |
(6,177 |
) |
(100.0 |
)% |
| Net income and
comprehensive income from continuing operations |
$ |
28,062 |
|
$ |
11,081 |
|
$ |
16,981 |
|
153.2 |
% |
| Net income and
comprehensive income from discontinued operations |
$ |
— |
|
$ |
115,184 |
|
$ |
(115,184 |
) |
(100.0 |
)% |
| Net income and
comprehensive income |
$ |
28,062 |
|
$ |
126,265 |
|
$ |
(98,203 |
) |
(77.8 |
)% |
|
|
|
|
|
|
(1) For the three months ended June 30,
2024, general and administrative expenses increased by $2,606 or
55.3% from the comparable period. This was primarily due to the
fair value adjustment on the total return swap of $1,683 on
unit-based compensation plans and lower capitalization to
qualifying investment properties of $630 for the directly
attributable employee costs related to the sale of the UDC
portfolio in 2023. The fair value adjustment on the total return
swap is added back in the calculation of FFO.
| |
For the six months ended June 30 |
| (in
thousands except for % amounts) |
|
2024 |
|
|
2023 |
|
Change |
% Change |
|
Continuing operations |
|
|
|
|
|
Rental revenue |
$ |
290,327 |
|
$ |
274,627 |
|
$ |
15,700 |
|
5.7 |
% |
|
Property operating costs |
$ |
(129,465 |
) |
$ |
(119,362 |
) |
$ |
(10,103 |
) |
(8.5 |
)% |
|
Operating income |
$ |
160,862 |
|
$ |
155,265 |
|
$ |
5,597 |
|
3.6 |
% |
|
Interest income |
$ |
24,374 |
|
$ |
19,969 |
|
$ |
4,405 |
|
22.1 |
% |
|
Interest expense |
$ |
(53,363 |
) |
$ |
(49,361 |
) |
$ |
(4,002 |
) |
(8.1 |
)% |
|
General and administrative expenses
(1) |
$ |
(13,818 |
) |
$ |
(10,884 |
) |
$ |
(2,934 |
) |
(27.0 |
)% |
|
Condominium marketing expenses |
$ |
(100 |
) |
$ |
(312 |
) |
$ |
212 |
|
67.9 |
% |
|
Amortization of other assets |
$ |
(760 |
) |
$ |
(730 |
) |
$ |
(30 |
) |
(4.1 |
)% |
|
Net income (loss) from joint venture |
$ |
1,287 |
|
$ |
(583 |
) |
$ |
1,870 |
|
320.8 |
% |
|
Fair value loss on investment properties and investment
properties held for sale |
$ |
(164,175 |
) |
$ |
(151,828 |
) |
$ |
(12,347 |
) |
(8.1 |
)% |
|
Fair value gain on Exchangeable LP Units |
$ |
57,511 |
|
$ |
10,510 |
|
$ |
47,001 |
|
447.2 |
% |
|
Fair value gain on derivative instruments |
$ |
3,658 |
|
$ |
7,333 |
|
$ |
(3,675 |
) |
(50.1 |
)% |
|
Impairment of residential inventory |
$ |
(6,177 |
) |
$ |
— |
|
$ |
(6,177 |
) |
(100.0 |
)% |
| Net income (loss) and
comprehensive income (loss) from continuing
operations |
$ |
9,299 |
|
$ |
(20,621 |
) |
$ |
29,920 |
|
145.1 |
% |
| Net income and
comprehensive income from discontinued operations |
$ |
— |
|
$ |
133,203 |
|
$ |
(133,203 |
) |
(100.0 |
)% |
| Net income and
comprehensive income |
$ |
9,299 |
|
$ |
112,582 |
|
$ |
(103,283 |
) |
(91.7 |
)% |
|
|
|
|
|
|
(1) For the six months ended June 30, 2024,
general and administrative expenses increased by $2,934 or 27.0%
from the comparable period primarily due to the fair value
adjustment on the total return swap of $1,683 on unit-based
compensation plans and lower capitalization to qualifying
investment properties of $985 for the directly attributable
employee costs related to the disposition of the UDC portfolio in
2023. The fair value adjustment on the total return swap is added
back in the calculation of FFO.
The following table summarizes other financial
measures as at June 30, 2024, and 2023:
| |
As at June 30 |
| (in
thousands except for per unit and % amounts) |
|
2024 |
|
|
2023 |
|
Change |
% Change |
|
Investment properties
(1) |
$ |
9,777,747 |
|
$ |
9,725,755 |
|
$ |
51,992 |
|
0.5 |
% |
| Unencumbered
investment properties
(2) |
$ |
8,506,667 |
|
$ |
8,416,150 |
|
$ |
90,517 |
|
1.1 |
% |
| Total Assets
(1) |
$ |
10,981,068 |
|
$ |
12,185,427 |
|
$ |
(1,204,359 |
) |
(9.9 |
)% |
| Cost of PUD as a % of
GBV
(2) |
|
11.4 |
% |
|
11.4 |
% |
|
— |
|
— |
% |
| NAV per unit
(3) |
$ |
44.43 |
|
$ |
50.80 |
|
$ |
(6.37 |
) |
(12.5 |
)% |
| Debt
(1) |
$ |
4,272,514 |
|
$ |
4,474,519 |
|
$ |
(202,005 |
) |
(4.5 |
)% |
| Total indebtedness
ratio
(2) |
|
39.1 |
% |
|
36.9 |
% |
|
— |
|
2.2 |
% |
| Annualized Adjusted
EBITDA
(2) |
$ |
383,112 |
|
$ |
425,540 |
|
$ |
(42,428 |
) |
(10.0 |
)% |
| Net debt as a multiple
of Annualized Adjusted EBITDA
(2) |
10.9x |
|
10.5x |
|
0.4x |
|
— |
|
| Interest coverage
ratio including interest capitalized and excluding financing
prepayment costs - three months trailing
(2) |
2.3x |
|
2.3x |
|
|
— |
|
— |
|
|
Interest coverage ratio including interest capitalized and
excluding financing prepayment costs - twelve months
trailing
(2) |
2.6x |
|
2.6x |
|
|
— |
|
— |
|
(1) This measure is presented on an IFRS
basis.(2) This is a non-GAAP measure and includes the results of
the continuing operations and the discontinued operations. Refer to
the Non-GAAP Measures section below.(3) Prior to Allied's
conversion to an open-end trust, net asset value per unit ("NAV per
unit") was calculated as total equity as at the corresponding
period ended, divided by the actual number of Units and class B
limited partnership units of Allied Properties Exchangeable Limited
Partnership ("Exchangeable LP Units") outstanding at period end.
With Allied's conversion to an open-end trust on June 12, 2023, NAV
per unit is calculated as total equity plus the value of
Exchangeable LP Units as at the corresponding period ended, divided
by the actual number of Units and Exchangeable LP Units. The
rationale for including the value of Exchangeable LP Units is
because they are economically equivalent to Units, receive
distributions equal to the distributions paid on the Units and are
exchangeable, at the holder's option, for Units.
Non-GAAP Measures
Management uses financial measures based on
International Financial Reporting Standards ("IFRS" or "GAAP") and
non-GAAP measures to assess Allied's performance. Non-GAAP measures
do not have any standardized meaning prescribed under IFRS, and
therefore, should not be construed as alternatives to net income or
cash flow from operating activities calculated in accordance with
IFRS. Refer to the Non-GAAP Measures section on page 16 of the
MD&A as at June 30, 2024, available on www.sedarplus.ca,
for an explanation of the composition of the non-GAAP measures used
in this press release and their usefulness for readers in assessing
Allied's performance. Such explanation is incorporated by reference
herein.
The following tables summarize non-GAAP
financial measures for the three and six months ended June 30,
2024, and 2023:
| |
For the three months ended June 30 |
| (in thousands except for per
unit and % amounts)(1) |
|
2024 |
|
|
2023 |
|
Change |
% Change |
|
Adjusted EBITDA |
$ |
95,778 |
|
$ |
106,385 |
|
$ |
(10,607 |
) |
(10.0 |
)% |
| Same Asset NOI -
rental portfolio |
$ |
75,612 |
|
$ |
77,404 |
|
$ |
(1,792 |
) |
(2.3 |
)% |
| Same Asset NOI - total
portfolio |
$ |
85,025 |
|
$ |
83,621 |
|
$ |
1,404 |
|
1.7 |
% |
| FFO |
$ |
72,089 |
|
$ |
82,224 |
|
$ |
(10,135 |
) |
(12.3 |
)% |
| FFO per unit
(diluted) |
$ |
0.516 |
|
$ |
0.588 |
|
$ |
(0.072 |
) |
(12.2 |
)% |
| FFO pay-out
ratio |
|
87.2 |
% |
|
76.5 |
% |
|
— |
|
10.7 |
% |
| All
amounts below are excluding condominium related items, financing
prepayment costs, and the mark-to-market adjustment on unit-based
compensation: |
|
FFO |
$ |
73,483 |
|
$ |
82,216 |
|
$ |
(8,733 |
) |
(10.6 |
)% |
|
FFO per unit (diluted) |
$ |
0.526 |
|
$ |
0.588 |
|
$ |
(0.062 |
) |
(10.5 |
)% |
|
FFO pay-out ratio |
|
85.6 |
% |
|
76.5 |
% |
|
— |
|
9.1 |
% |
|
AFFO |
$ |
66,612 |
|
$ |
74,958 |
|
$ |
(8,346 |
) |
(11.1 |
)% |
|
AFFO per unit (diluted) |
$ |
0.477 |
|
$ |
0.536 |
|
$ |
(0.059 |
) |
(11.0 |
)% |
|
AFFO pay-out ratio |
|
94.4 |
% |
|
83.9 |
% |
|
— |
|
10.5 |
% |
|
|
|
|
|
|
(1) These non-GAAP measures include the results
of the continuing operations and the discontinued operations
(except for Same Asset NOI - rental portfolio, which only includes
continuing operations).
| |
For the six months ended June 30 |
| (in thousands except for per
unit and % amounts)(1) |
|
2024 |
|
|
2023 |
|
Change |
% Change |
|
Adjusted EBITDA |
$ |
192,280 |
|
$ |
209,380 |
|
$ |
(17,100 |
) |
(8.2 |
)% |
| Same Asset NOI -
rental portfolio |
$ |
150,430 |
|
$ |
153,672 |
|
$ |
(3,242 |
) |
(2.1 |
)% |
| Same Asset NOI - total
portfolio |
$ |
169,251 |
|
$ |
165,484 |
|
$ |
3,767 |
|
2.3 |
% |
| FFO |
$ |
153,238 |
|
$ |
163,399 |
|
$ |
(10,161 |
) |
(6.2 |
)% |
| FFO per unit
(diluted) |
$ |
1.096 |
|
$ |
1.169 |
|
$ |
(0.073 |
) |
(6.2 |
)% |
| FFO pay-out
ratio |
|
82.1 |
% |
|
77.0 |
% |
|
— |
|
5.1 |
% |
|
All amounts below are excluding condominium related items,
financing prepayment costs, and the mark-to-market adjustment on
unit-based compensation: |
|
FFO |
$ |
154,277 |
|
$ |
163,301 |
|
$ |
(9,024 |
) |
(5.5 |
)% |
|
FFO per unit (diluted) |
$ |
1.104 |
|
$ |
1.168 |
|
$ |
(0.064 |
) |
(5.5 |
)% |
|
FFO pay-out ratio |
|
81.5 |
% |
|
77.0 |
% |
|
— |
|
4.5 |
% |
|
AFFO |
$ |
141,666 |
|
$ |
149,440 |
|
$ |
(7,774 |
) |
(5.2 |
)% |
|
AFFO per unit (diluted) |
$ |
1.014 |
|
$ |
1.069 |
|
$ |
(0.055 |
) |
(5.1 |
)% |
|
AFFO pay-out ratio |
|
88.8 |
% |
|
84.2 |
% |
|
— |
|
4.6 |
% |
|
|
|
|
|
|
(1) These non-GAAP measures include the results of the
continuing operations and the discontinued operations (except for
Same Asset NOI - rental portfolio, which only includes continuing
operations).
The following tables reconcile the non-GAAP
measures to the most comparable IFRS measures for the three and six
months ended June 30, 2024, and the comparable period in 2023.
These terms do not have any standardized meaning prescribed under
IFRS and may not be comparable to similarly titled measures
presented by other publicly traded entities.
The following table reconciles Allied's net
income and comprehensive income to Adjusted EBITDA, a non-GAAP
measure, for the three and six months ended June 30, 2024, and
2023.
| |
Three months ended |
|
Six months ended |
|
|
June 30, 2024 |
June 30, 2023 |
|
June 30, 2024 |
June 30, 2023 |
|
Net income and comprehensive income for the period |
$ |
28,062 |
|
$ |
126,265 |
|
|
$ |
9,299 |
|
$ |
112,582 |
|
| Interest expense |
|
29,932 |
|
|
28,578 |
|
|
|
53,363 |
|
|
52,913 |
|
| Amortization of other
assets |
|
433 |
|
|
360 |
|
|
|
870 |
|
|
730 |
|
| Amortization of improvement
allowances |
|
9,236 |
|
|
8,154 |
|
|
|
18,808 |
|
|
16,522 |
|
| Impairment of residential
inventory |
|
6,177 |
|
|
— |
|
|
|
6,177 |
|
|
— |
|
| Fair value loss (gain) on
investment properties and investment properties held for sale
(1) |
|
44,989 |
|
|
(30,905 |
) |
|
|
163,993 |
|
|
44,886 |
|
| Fair value gain on
Exchangeable LP Units |
|
(27,870 |
) |
|
(10,510 |
) |
|
|
(57,511 |
) |
|
(10,510 |
) |
| Fair value loss (gain) on
derivative instruments |
|
3,490 |
|
|
(15,357 |
) |
|
|
(3,658 |
) |
|
(7,333 |
) |
|
Mark-to-market adjustment on unit-based compensation |
|
1,329 |
|
|
(200 |
) |
|
|
939 |
|
|
(410 |
) |
|
Adjusted EBITDA (2) |
$ |
95,778 |
|
$ |
106,385 |
|
|
$ |
192,280 |
|
$ |
209,380 |
|
(1) Includes Allied's proportionate share of the
equity accounted investment's fair value loss on investment
properties of $6 and fair value gain on investment properties of
$182 for the three and six months ended June 30, 2024,
respectively (June 30, 2023 - fair value gain on investment
properties of $1,280 and fair value loss on investment properties
of $2,743, respectively).(2) The Adjusted EBITDA for the three and
six months ended June 30, 2023 includes the Urban Data Centre
segment which was classified as a discontinued operation from Q4
2022 until its disposition in August 2023.
The following table reconciles operating income to net operating
income, a non-GAAP measure, for the three and six months ended
June 30, 2024, and 2023.
| |
Three months ended |
Six months ended |
| |
June 30, 2024 |
June 30, 2023 |
June 30, 2024 |
June 30, 2023 |
|
Operating income, IFRS basis |
$ |
82,391 |
|
$ |
78,100 |
|
$ |
160,862 |
|
$ |
155,265 |
|
| Add:
investment in joint venture |
|
583 |
|
|
1,140 |
|
|
1,193 |
|
|
2,149 |
|
|
Operating income, proportionate basis |
$ |
82,974 |
|
$ |
79,240 |
|
$ |
162,055 |
|
$ |
157,414 |
|
| Amortization of improvement
allowances (1)(2) |
|
9,236 |
|
|
8,023 |
|
|
18,808 |
|
|
16,261 |
|
|
Amortization of straight-line rent (1)(2) |
|
(2,212 |
) |
|
(1,626 |
) |
|
(3,710 |
) |
|
(3,405 |
) |
|
NOI from continuing operations |
$ |
89,998 |
|
$ |
85,637 |
|
$ |
177,153 |
|
$ |
170,270 |
|
|
NOI from discontinued operations |
$ |
— |
|
$ |
13,797 |
|
$ |
— |
|
$ |
26,866 |
|
|
Total NOI |
$ |
89,998 |
|
$ |
99,434 |
|
$ |
177,153 |
|
$ |
197,136 |
|
(1) Includes Allied's proportionate share of the
equity accounted investment of the following amounts for the three
and six months ended June 30, 2024: amortization improvement
allowances of $197 and $376, respectively (June 30, 2023 -
$144 and $327, respectively) and amortization of straight-line rent
of $(50) and $(95), respectively (June 30, 2023 - $(50) and
$(98), respectively). (2) Excludes the Urban Data Centre segment
which was classified as a discontinued operation starting in Q4
2022. For the three and six months ended June 30, 2024, the
Urban Data Centre segment's amortization of improvement allowances
was $nil and $nil, respectively (June 30, 2023 - $131 and
$261, respectively). For the three and six months ended
June 30, 2024, the Urban Data Centre segment's amortization of
straight-line rent was $nil and $nil, respectively (June 30,
2023 - $(203) and $(465), respectively).
Same Asset NOI, a non-GAAP measure, is measured as the net
operating income for the properties that Allied owned and operated
for the entire duration of both the current and comparative
period.
| |
Three months ended |
Change |
| |
June 30, 2024 |
June 30, 2023 |
$ |
% |
|
Rental Portfolio - Same Asset NOI |
$ |
75,612 |
$ |
77,404 |
$ |
(1,792 |
) |
(2.3 |
)% |
| Assets
Held for Sale - Same Asset NOI |
|
2,346 |
|
3,232 |
|
(886 |
) |
(27.4 |
) |
|
Rental Portfolio and Assets Held for Sale - Same Asset
NOI |
$ |
77,958 |
$ |
80,636 |
$ |
(2,678 |
) |
(3.3 |
%) |
|
Development Portfolio - Same Asset NOI |
|
7,067 |
|
2,985 |
|
4,082 |
|
136.8 |
|
|
Total Portfolio - Same Asset NOI |
$ |
85,025 |
$ |
83,621 |
$ |
1,404 |
|
1.7 |
% |
|
Acquisitions |
|
3,665 |
|
— |
|
3,665 |
|
|
|
Dispositions |
|
29 |
|
14,250 |
|
(14,221 |
) |
|
|
Lease terminations |
|
19 |
|
— |
|
19 |
|
|
|
Development fees and corporate items |
|
1,260 |
|
1,563 |
|
(303 |
) |
|
|
Total NOI |
$ |
89,998 |
$ |
99,434 |
$ |
(9,436 |
) |
(9.5 |
%) |
| |
Six months ended |
Change |
| |
June 30, 2024 |
June 30, 2023 |
$ |
% |
|
Rental Portfolio - Same Asset NOI |
$ |
150,430 |
$ |
153,672 |
$ |
(3,242 |
) |
(2.1 |
)% |
| Assets
Held for Sale - Same Asset NOI |
|
5,381 |
|
6,348 |
|
(967 |
) |
(15.2 |
) |
|
Rental Portfolio and Assets Held for Sale - Same Asset
NOI |
$ |
155,811 |
$ |
160,020 |
$ |
(4,209 |
) |
(2.6 |
%) |
|
Development Portfolio - Same Asset NOI |
|
13,440 |
|
5,464 |
|
7,976 |
|
146.0 |
|
|
Total Portfolio - Same Asset NOI |
$ |
169,251 |
$ |
165,484 |
$ |
3,767 |
|
2.3 |
% |
|
Acquisitions |
|
3,665 |
|
— |
|
3,665 |
|
|
|
Dispositions |
|
37 |
|
27,771 |
|
(27,734 |
) |
|
|
Lease terminations |
|
28 |
|
193 |
|
(165 |
) |
|
|
Development fees and corporate items |
|
4,172 |
|
3,688 |
|
484 |
|
|
|
Total NOI |
$ |
177,153 |
$ |
197,136 |
$ |
(19,983 |
) |
(10.1 |
%) |
The following tables reconcile Allied's net
income (loss) and comprehensive income (loss) from continuing
operations to FFO, FFO excluding condominium related items,
financing prepayment costs, and the mark-to-market adjustment on
unit-based compensation, AFFO, and AFFO excluding condominium
related items, financing prepayment costs, and the mark-to-market
adjustment on unit-based compensation, which are non-GAAP measures,
for the three and six months ended June 30, 2024, and
2023.
| |
Three months ended |
|
|
June 30, 2024 |
June 30, 2023 |
Change |
|
Net income and comprehensive income from continuing operations |
$ |
28,062 |
|
$ |
11,081 |
|
$ |
16,981 |
|
| Net income and comprehensive
income from discontinued operations |
|
— |
|
|
115,184 |
|
|
(115,184 |
) |
| Adjustment to fair value of
investment properties and investment properties held for sale |
|
44,983 |
|
|
(29,625 |
) |
|
74,608 |
|
| Adjustment to fair value of
Exchangeable LP Units |
|
(27,870 |
) |
|
(10,510 |
) |
|
(17,360 |
) |
| Adjustment to fair value of
derivative instruments |
|
3,490 |
|
|
(15,357 |
) |
|
18,847 |
|
| Impairment of residential
inventory |
|
6,177 |
|
|
— |
|
|
6,177 |
|
| Incremental leasing costs |
|
2,592 |
|
|
2,295 |
|
|
297 |
|
| Amortization of improvement
allowances |
|
9,039 |
|
|
8,010 |
|
|
1,029 |
|
| Amortization of property,
plant and equipment (1) |
|
99 |
|
|
101 |
|
|
(2 |
) |
| Distributions on Exchangeable
LP Units |
|
5,314 |
|
|
1,771 |
|
|
3,543 |
|
| Adjustments relating to joint
venture: |
|
|
|
|
Adjustment to fair value on investment properties |
|
6 |
|
|
(1,280 |
) |
|
1,286 |
|
|
Amortization of improvement allowances |
|
197 |
|
|
144 |
|
|
53 |
|
|
Interest expense(2) |
|
— |
|
|
410 |
|
|
(410 |
) |
|
FFO |
$ |
72,089 |
|
$ |
82,224 |
|
$ |
(10,135 |
) |
| Condominium marketing
costs |
|
65 |
|
|
192 |
|
|
(127 |
) |
| Financing prepayment
costs |
|
— |
|
|
— |
|
|
— |
|
|
Mark-to-market adjustment on unit-based compensation |
|
1,329 |
|
|
(200 |
) |
|
1,529 |
|
|
FFO excluding condominium related items, financing
prepayment costs, and the mark-to-market adjustment on unit-based
compensation |
$ |
73,483 |
|
$ |
82,216 |
|
$ |
(8,733 |
) |
| Amortization of straight-line
rent |
|
(2,162 |
) |
|
(1,779 |
) |
|
(383 |
) |
| Regular leasing
expenditures |
|
(2,166 |
) |
|
(2,973 |
) |
|
807 |
|
| Regular and recoverable
maintenance capital expenditures |
|
(678 |
) |
|
(849 |
) |
|
171 |
|
| Incremental leasing costs
(related to regular leasing expenditures) |
|
(1,814 |
) |
|
(1,607 |
) |
|
(207 |
) |
| Adjustment relating to joint
venture: |
|
|
|
|
Amortization of straight-line rent |
|
(50 |
) |
|
(50 |
) |
|
— |
|
|
Regular leasing expenditures |
|
(1 |
) |
|
— |
|
|
(1 |
) |
|
AFFO excluding condominium related items, financing
prepayment costs, and the mark-to-market adjustment on unit-based
compensation |
$ |
66,612 |
|
$ |
74,958 |
|
$ |
(8,346 |
) |
|
|
|
|
|
| Weighted average number of
units (3) |
|
|
|
|
Basic |
|
139,765,128 |
|
|
139,765,128 |
|
|
— |
|
|
Diluted |
|
139,765,128 |
|
|
139,765,128 |
|
|
— |
|
| |
|
|
|
| Per unit - basic |
|
|
|
|
FFO |
$ |
0.516 |
|
$ |
0.588 |
|
$ |
(0.072 |
) |
|
FFO excluding condominium related items, financing prepayment
costs, and the mark-to-market adjustment on unit-based
compensation |
$ |
0.526 |
|
$ |
0.588 |
|
$ |
(0.062 |
) |
|
AFFO excluding condominium related items, financing prepayment
costs, and the mark-to-market adjustment on unit-based
compensation |
$ |
0.477 |
|
$ |
0.536 |
|
$ |
(0.059 |
) |
| |
|
|
|
| Per unit - diluted |
|
|
|
|
FFO |
$ |
0.516 |
|
$ |
0.588 |
|
$ |
(0.072 |
) |
|
FFO excluding condominium related items, financing prepayment
costs, and the mark-to-market adjustment on unit-based
compensation |
$ |
0.526 |
|
$ |
0.588 |
|
$ |
(0.062 |
) |
|
AFFO excluding condominium related items, financing prepayment
costs, and the mark-to-market adjustment on unit-based
compensation |
$ |
0.477 |
|
$ |
0.536 |
|
$ |
(0.059 |
) |
| |
|
|
|
| Pay-out Ratio |
|
|
|
|
FFO |
|
87.2 |
% |
|
76.5 |
% |
|
10.7 |
% |
|
FFO excluding condominium related items, financing prepayment
costs, and the mark-to-market adjustment on unit-based
compensation |
|
85.6 |
% |
|
76.5 |
% |
|
9.1 |
% |
|
AFFO excluding condominium related items, financing prepayment
costs, and the mark-to-market adjustment on unit-based
compensation |
|
94.4 |
% |
|
83.9 |
% |
|
10.5 |
% |
(1) Property, plant and equipment relates to owner-occupied
property.(2) This amount represents interest expense on Allied's
joint venture investment in TELUS Sky and is not capitalized under
IFRS, but is allowed as an adjustment under REALPAC's definition of
FFO. (3) The weighted average number of units includes Units and
Exchangeable LP Units. The Exchangeable LP Units were re-classified
from non-controlling interests in equity to liabilities in the
unaudited condensed consolidated financial statements on Allied's
conversion to an open-end trust on June 12, 2023.
| |
Six months ended |
|
|
June 30, 2024 |
June 30, 2023 |
Change |
|
Net income (loss) and comprehensive income (loss) from continuing
operations |
$ |
9,299 |
|
$ |
(20,621 |
) |
$ |
29,920 |
|
| Net income and comprehensive
income from discontinued operations |
|
— |
|
|
133,203 |
|
|
(133,203 |
) |
| Adjustment to fair value of
investment properties and investment properties held for sale |
|
164,175 |
|
|
42,143 |
|
|
122,032 |
|
| Adjustment to fair value of
Exchangeable LP Units |
|
(57,511 |
) |
|
(10,510 |
) |
|
(47,001 |
) |
| Adjustment to fair value of
derivative instruments |
|
(3,658 |
) |
|
(7,333 |
) |
|
3,675 |
|
| Impairment of residential
inventory |
|
6,177 |
|
|
— |
|
|
6,177 |
|
| Incremental leasing costs |
|
5,303 |
|
|
4,535 |
|
|
768 |
|
| Amortization of improvement
allowances |
|
18,432 |
|
|
16,195 |
|
|
2,237 |
|
| Amortization of property,
plant and equipment (1) |
|
199 |
|
|
201 |
|
|
(2 |
) |
| Distributions on Exchangeable
LP Units |
|
10,628 |
|
|
1,771 |
|
|
8,857 |
|
| Adjustments relating to joint
venture: |
|
|
|
|
Adjustment to fair value on investment properties |
|
(182 |
) |
|
2,743 |
|
|
(2,925 |
) |
|
Amortization of improvement allowances |
|
376 |
|
|
327 |
|
|
49 |
|
|
Interest expense (2) |
|
— |
|
|
745 |
|
|
(745 |
) |
|
FFO |
$ |
153,238 |
|
$ |
163,399 |
|
$ |
(10,161 |
) |
| Condominium marketing
costs |
|
100 |
|
|
312 |
|
|
(212 |
) |
| Financing prepayment
costs |
|
— |
|
|
— |
|
|
— |
|
|
Mark-to-market adjustment on unit-based compensation |
|
939 |
|
|
(410 |
) |
|
1,349 |
|
|
FFO excluding condominium related items, financing prepayment
costs, and the mark-to-market adjustment on unit-based
compensation |
$ |
154,277 |
|
$ |
163,301 |
|
$ |
(9,024 |
) |
| Amortization of straight-line
rent |
|
(3,615 |
) |
|
(3,772 |
) |
|
157 |
|
| Regular leasing
expenditures |
|
(3,753 |
) |
|
(4,099 |
) |
|
346 |
|
| Regular and recoverable
maintenance capital expenditures |
|
(1,428 |
) |
|
(2,717 |
) |
|
1,289 |
|
| Incremental leasing costs
(related to regular leasing expenditures) |
|
(3,712 |
) |
|
(3,175 |
) |
|
(537 |
) |
| Adjustment relating to joint
venture: |
|
|
|
|
Amortization of straight-line rent |
|
(95 |
) |
|
(98 |
) |
|
3 |
|
|
Regular leasing expenditures |
|
(8 |
) |
|
— |
|
|
(8 |
) |
|
AFFO excluding condominium related items, financing prepayment
costs, and the mark-to-market adjustment on unit-based
compensation |
$ |
141,666 |
|
$ |
149,440 |
|
$ |
(7,774 |
) |
|
|
|
|
|
| Weighted average number of
units (3) |
|
|
|
|
Basic |
|
139,765,128 |
|
|
139,765,128 |
|
|
— |
|
|
Diluted |
|
139,765,128 |
|
|
139,765,128 |
|
|
— |
|
| |
|
|
|
| Per unit - basic |
|
|
|
|
FFO |
$ |
1.096 |
|
$ |
1.169 |
|
$ |
(0.073 |
) |
|
FFO excluding condominium related items, financing prepayment
costs, and the mark-to-market adjustment on unit-based
compensation |
$ |
1.104 |
|
$ |
1.168 |
|
$ |
(0.064 |
) |
|
AFFO excluding condominium related items, financing prepayment
costs, and the mark-to-market adjustment on unit-based
compensation |
$ |
1.014 |
|
$ |
1.069 |
|
$ |
(0.055 |
) |
| |
|
|
|
| Per unit - diluted |
|
|
|
|
FFO |
$ |
1.096 |
|
$ |
1.169 |
|
$ |
(0.073 |
) |
|
FFO excluding condominium related items, financing prepayment
costs, and the mark-to-market adjustment on unit-based
compensation |
$ |
1.104 |
|
$ |
1.168 |
|
$ |
(0.064 |
) |
|
AFFO excluding condominium related items, financing prepayment
costs, and the mark-to-market adjustment on unit-based
compensation |
$ |
1.014 |
|
$ |
1.069 |
|
$ |
(0.055 |
) |
| |
|
|
|
| Pay-out Ratio |
|
|
|
|
FFO |
|
82.1 |
% |
|
77.0 |
% |
|
5.1 |
% |
|
FFO excluding condominium related items, financing prepayment
costs, and the mark-to-market adjustment on unit-based
compensation |
|
81.5 |
% |
|
77.0 |
% |
|
4.5 |
% |
|
AFFO excluding condominium related items, financing prepayment
costs, and the mark-to-market adjustment on unit-based
compensation |
|
88.8 |
% |
|
84.2 |
% |
|
4.6 |
% |
(1) Property, plant and equipment relates to owner-occupied
property.(2) This amount represents interest expense on Allied's
joint venture investment in TELUS Sky and is not capitalized under
IFRS, but is allowed as an adjustment under REALPAC's definition of
FFO. (3) The weighted average number of units includes Units and
Exchangeable LP Units. The Exchangeable LP Units were re-classified
from non-controlling interests in equity to liabilities in the
unaudited condensed consolidated financial statements on Allied's
conversion to an open-end trust on June 12, 2023.
The following tables reconcile Allied's net
income (loss) and comprehensive income (loss) from continuing
operations to FFO, FFO excluding condominium related items,
financing prepayment costs, the mark-to-market adjustment on
unit-based compensation, and the 400 West Georgia and 19 Duncan
transactions, and AFFO excluding condominium related items,
financing prepayment costs, the mark-to-market adjustment on
unit-based compensation, and the 400 West Georgia and 19 Duncan
transactions, which are non-GAAP measures, for the three and six
months ended June 30, 2024, and 2023.
FFO excluding condominium related items,
financing prepayment costs, the mark-to-market adjustment on
unit-based compensation, and the 400 West Georgia and 19 Duncan
transactions starts with FFO and removes the effects of the
acquisitions on April 1, 2024, which includes a 45% interest in 19
Duncan in Toronto and a 90% interest in 400 West Georgia in
Vancouver (the "Acquisitions"), condominium revenue, condominium
cost of sales, condominium marketing costs, financing prepayment
costs and the mark-to-market adjustment on unit-based compensation.
FFO excluding condominium related items, financing prepayment
costs, the mark-to-market adjustment on unit-based compensation,
and the 400 West Georgia and 19 Duncan transactions is reconciled
to net income and comprehensive income from continuing operations,
which is the most directly comparable IFRS measure. Management
believes this is a useful measure as stabilized occupancy has not
been reached at the properties acquired through the Acquisitions,
the condominium and financing prepayment items are not indicative
of recurring operating performance, and the mark-to-market
adjustments of unit-based compensation can fluctuate widely with
the market.
AFFO excluding condominium related items,
financing prepayment costs, the mark-to-market adjustment on
unit-based compensation, and the 400 West Georgia and 19 Duncan
transactions starts with AFFO and removes the effects of the
Acquisitions, condominium revenue, condominium cost of sales,
condominium marketing costs, financing prepayment costs and the
mark-to-market adjustment on unit-based compensation. AFFO
excluding condominium related items, financing prepayment costs,
the mark-to-market adjustment on unit-based compensation, and the
400 West Georgia and 19 Duncan transactions is reconciled to net
income and comprehensive income from continuing operations, which
is the most directly comparable IFRS measure. Management believes
this is a useful measure as stabilized occupancy has not been
reached at the properties acquired through the Acquisitions, the
condominium and financing prepayment items are not indicative of
recurring economic earnings, and the mark-to-market adjustments of
unit-based compensation can fluctuate widely with the market.
FFO and AFFO pay-out ratios excluding
condominium related items, financing prepayment costs, the
mark-to-market adjustment on unit-based compensation, and the 400
West Georgia and 19 Duncan transactions are non-GAAP measures.
These payout ratios are calculated by dividing the actual
distributions declared (excluding any special distributions
declared in cash or Units) by FFO and AFFO excluding condominium
related items, financing prepayment costs, the mark-to-market
adjustment on unit-based compensation, and the 400 West Georgia and
19 Duncan transactions in a given period. Management considers
these metrics a useful way to evaluate Allied's distribution paying
capacity as stabilized occupancy has not been reached at the
properties acquired under the Acquisitions.
| |
Three months ended |
|
|
June 30, 2024 |
June 30, 2023 |
Change |
|
Net income and comprehensive income from continuing operations |
$ |
28,062 |
|
$ |
11,081 |
|
$ |
16,981 |
|
| Net income and comprehensive
income from discontinued operations |
|
— |
|
|
115,184 |
|
|
(115,184 |
) |
| Adjustment to fair value of
investment properties and investment properties held for sale |
|
44,983 |
|
|
(29,625 |
) |
|
74,608 |
|
| Adjustment to fair value of
Exchangeable LP Units |
|
(27,870 |
) |
|
(10,510 |
) |
|
(17,360 |
) |
| Adjustment to fair value of
derivative instruments |
|
3,490 |
|
|
(15,357 |
) |
|
18,847 |
|
| Impairment of residential
inventory |
|
6,177 |
|
|
— |
|
|
6,177 |
|
| Incremental leasing costs |
|
2,592 |
|
|
2,295 |
|
|
297 |
|
| Amortization of improvement
allowances |
|
9,039 |
|
|
8,010 |
|
|
1,029 |
|
| Amortization of property,
plant and equipment (1) |
|
99 |
|
|
101 |
|
|
(2 |
) |
| Distributions on Exchangeable
LP Units |
|
5,314 |
|
|
1,771 |
|
|
3,543 |
|
| Adjustments relating to joint
venture: |
|
|
|
|
Adjustment to fair value on investment properties |
|
6 |
|
|
(1,280 |
) |
|
1,286 |
|
|
Amortization of improvement allowances |
|
197 |
|
|
144 |
|
|
53 |
|
|
Interest expense (2) |
|
— |
|
|
410 |
|
|
(410 |
) |
|
FFO |
$ |
72,089 |
|
$ |
82,224 |
|
$ |
(10,135 |
) |
| Condominium marketing
costs |
|
65 |
|
|
192 |
|
|
(127 |
) |
| Financing prepayment
costs |
|
— |
|
|
— |
|
|
— |
|
| Mark-to-market adjustment on
unit-based compensation |
|
1,329 |
|
|
(200 |
) |
|
1,529 |
|
| 400
West Georgia and 19 Duncan transactions |
|
5,702 |
|
|
— |
|
|
5,702 |
|
|
FFO excluding condominium related items, financing
prepayment costs, the mark-to-market adjustment on unit-based
compensation, and 400 West Georgia and 19 Duncan
transactions |
$ |
79,185 |
|
$ |
82,216 |
|
$ |
(3,031 |
) |
| Amortization of straight-line
rent |
|
(2,162 |
) |
|
(1,779 |
) |
|
(383 |
) |
| Regular leasing
expenditures |
|
(2,166 |
) |
|
(2,973 |
) |
|
807 |
|
| Regular and recoverable
maintenance capital expenditures |
|
(678 |
) |
|
(849 |
) |
|
171 |
|
| Incremental leasing costs
(related to regular leasing expenditures) |
|
(1,814 |
) |
|
(1,607 |
) |
|
(207 |
) |
| 400 West Georgia and 19 Duncan
transactions |
|
172 |
|
|
— |
|
|
172 |
|
| Adjustment relating to joint
venture: |
|
|
|
|
Amortization of straight-line rent |
|
(50 |
) |
|
(50 |
) |
|
— |
|
|
Regular leasing expenditures |
|
(1 |
) |
|
— |
|
|
(1 |
) |
|
AFFO excluding condominium related items, financing
prepayment costs, the mark-to-market adjustment on unit-based
compensation, and 400 West Georgia and 19 Duncan
transactions |
$ |
72,486 |
|
$ |
74,958 |
|
$ |
(2,472 |
) |
|
|
|
|
|
| Weighted average number of
units (3) |
|
|
|
|
Basic |
|
139,765,128 |
|
|
139,765,128 |
|
|
— |
|
|
Diluted |
|
139,765,128 |
|
|
139,765,128 |
|
|
— |
|
| |
|
|
|
| Per unit - basic |
|
|
|
| FFO excluding condominium
related items, financing prepayment costs, the mark-to-market
adjustment on unit-based compensation, and 400 West Georgia and 19
Duncan transactions |
$ |
0.567 |
|
$ |
0.588 |
|
$ |
(0.021 |
) |
| AFFO excluding condominium
related items, financing prepayment costs, the mark-to-market
adjustment on unit-based compensation, and 400 West Georgia and 19
Duncan transactions |
$ |
0.519 |
|
$ |
0.536 |
|
$ |
(0.017 |
) |
| |
|
|
|
| |
|
|
|
| Per unit - diluted |
|
|
|
| FFO excluding condominium
related items, financing prepayment costs, the mark-to-market
adjustment on unit-based compensation, and 400 West Georgia and 19
Duncan transactions |
$ |
0.567 |
|
$ |
0.588 |
|
$ |
(0.021 |
) |
| AFFO excluding condominium
related items, financing prepayment costs, the mark-to-market
adjustment on unit-based compensation, and 400 West Georgia and 19
Duncan transactions |
$ |
0.519 |
|
$ |
0.536 |
|
$ |
(0.017 |
) |
| |
|
|
|
| Pay-out Ratio |
|
|
|
| FFO excluding condominium
related items, financing prepayment costs, the mark-to-market
adjustment on unit-based compensation, and 400 West Georgia and 19
Duncan transactions |
|
79.4 |
% |
|
76.5 |
% |
|
2.9 |
% |
| AFFO
excluding condominium related items, financing prepayment costs,
the mark-to-market adjustment on unit-based compensation, and 400
West Georgia and 19 Duncan transactions |
|
86.8 |
% |
|
83.9 |
% |
|
2.9 |
% |
(1) Property, plant and equipment relates to owner-occupied
property.(2) This amount represents interest expense on Allied's
joint venture investment in TELUS Sky and is not capitalized under
IFRS, but is allowed as an adjustment under REALPAC's definition of
FFO. (3) The weighted average number of units includes Units and
Exchangeable LP Units. The Exchangeable LP Units were reclassified
from non-controlling interests in equity to liabilities in the
unaudited condensed consolidated financial statements on Allied's
conversion to an open-end trust on June 12, 2023.
| |
Six months ended |
|
|
June 30, 2024 |
June 30, 2023 |
Change |
|
Net income (loss) and comprehensive income (loss) from continuing
operations |
$ |
9,299 |
|
$ |
(20,621 |
) |
$ |
29,920 |
|
| Net income and comprehensive
income from discontinued operations |
|
— |
|
|
133,203 |
|
|
(133,203 |
) |
| Adjustment to fair value of
investment properties and investment properties held for sale |
|
164,175 |
|
|
42,143 |
|
|
122,032 |
|
| Adjustment to fair value of
Exchangeable LP Units |
|
(57,511 |
) |
|
(10,510 |
) |
|
(47,001 |
) |
| Adjustment to fair value of
derivative instruments |
|
(3,658 |
) |
|
(7,333 |
) |
|
3,675 |
|
| Impairment of residential
inventory |
|
6,177 |
|
|
— |
|
|
6,177 |
|
| Incremental leasing costs |
|
5,303 |
|
|
4,535 |
|
|
768 |
|
| Amortization of improvement
allowances |
|
18,432 |
|
|
16,195 |
|
|
2,237 |
|
| Amortization of property,
plant and equipment (1) |
|
199 |
|
|
201 |
|
|
(2 |
) |
| Distributions on Exchangeable
LP Units |
|
10,628 |
|
|
1,771 |
|
|
8,857 |
|
| Adjustments relating to joint
venture: |
|
|
|
|
Adjustment to fair value on investment properties |
|
(182 |
) |
|
2,743 |
|
|
(2,925 |
) |
|
Amortization of improvement allowances |
|
376 |
|
|
327 |
|
|
49 |
|
|
Interest expense (2) |
|
— |
|
|
745 |
|
|
(745 |
) |
|
FFO |
$ |
153,238 |
|
$ |
163,399 |
|
$ |
(10,161 |
) |
| Condominium marketing
costs |
|
100 |
|
|
312 |
|
|
(212 |
) |
| Financing prepayment
costs |
|
— |
|
|
— |
|
|
— |
|
| Mark-to-market adjustment on
unit-based compensation |
|
939 |
|
|
(410 |
) |
|
1,349 |
|
| 400
West Georgia and 19 Duncan transactions |
|
5,702 |
|
|
— |
|
|
5,702 |
|
|
FFO excluding condominium related items, financing
prepayment costs, the mark-to-market adjustment on unit-based
compensation, and 400 West Georgia and 19 Duncan
transactions |
$ |
159,979 |
|
$ |
163,301 |
|
$ |
(3,322 |
) |
| Amortization of straight-line
rent |
|
(3,615 |
) |
|
(3,772 |
) |
|
157 |
|
| Regular leasing
expenditures |
|
(3,753 |
) |
|
(4,099 |
) |
|
346 |
|
| Regular and recoverable
maintenance capital expenditures |
|
(1,428 |
) |
|
(2,717 |
) |
|
1,289 |
|
| Incremental leasing costs
(related to regular leasing expenditures) |
|
(3,712 |
) |
|
(3,175 |
) |
|
(537 |
) |
| 400 West Georgia and 19 Duncan
transactions |
|
172 |
|
|
— |
|
|
172 |
|
| Adjustment relating to joint
venture: |
|
|
|
|
Amortization of straight-line rent |
|
(95 |
) |
|
(98 |
) |
|
3 |
|
|
Regular leasing expenditures |
|
(8 |
) |
|
— |
|
|
(8 |
) |
|
AFFO excluding condominium related items, financing
prepayment costs, the mark-to-market adjustment on unit-based
compensation, and 400 West Georgia and 19 Duncan
transactions |
$ |
147,540 |
|
$ |
149,440 |
|
$ |
(1,900 |
) |
|
|
|
|
|
| Weighted average number of
units (3) |
|
|
|
|
Basic |
|
139,765,128 |
|
|
139,765,128 |
|
|
— |
|
|
Diluted |
|
139,765,128 |
|
|
139,765,128 |
|
|
— |
|
| |
|
|
|
| Per unit - basic |
|
|
|
| FFO excluding condominium
related items, financing prepayment costs, the mark-to-market
adjustment on unit-based compensation, and 400 West Georgia and 19
Duncan transactions |
$ |
1.145 |
|
$ |
1.168 |
|
$ |
(0.023 |
) |
| AFFO excluding condominium
related items, financing prepayment costs, the mark-to-market
adjustment on unit-based compensation, and 400 West Georgia and 19
Duncan transactions |
$ |
1.056 |
|
$ |
1.069 |
|
$ |
(0.013 |
) |
| |
|
|
|
| Per unit - diluted |
|
|
|
| FFO excluding condominium
related items, financing prepayment costs, the mark-to-market
adjustment on unit-based compensation, and 400 West Georgia and 19
Duncan transactions |
$ |
1.145 |
|
$ |
1.168 |
|
$ |
(0.023 |
) |
| AFFO excluding condominium
related items, financing prepayment costs, the mark-to-market
adjustment on unit-based compensation, and 400 West Georgia and 19
Duncan transactions |
$ |
1.056 |
|
$ |
1.069 |
|
$ |
(0.013 |
) |
| |
|
|
|
| Pay-out Ratio |
|
|
|
| FFO excluding condominium
related items, financing prepayment costs, the mark-to-market
adjustment on unit-based compensation, and 400 West Georgia and 19
Duncan transactions |
|
78.6 |
% |
|
77.0 |
% |
|
1.6 |
% |
| AFFO
excluding condominium related items, financing prepayment costs,
the mark-to-market adjustment on unit-based compensation, and 400
West Georgia and 19 Duncan transactions |
|
85.3 |
% |
|
84.2 |
% |
|
1.1 |
% |
(1) Property, plant and equipment relates to owner-occupied
property.(2) This amount represents interest expense on Allied's
joint venture investment in TELUS Sky and is not capitalized under
IFRS, but is allowed as an adjustment under REALPAC's definition of
FFO.(3) The weighted average number of units includes Units and
Exchangeable LP Units. The Exchangeable LP Units were re-classified
from non-controlling interests in equity to liabilities in the
unaudited condensed consolidated financial statements on Allied's
conversion to an open-end trust on June 12, 2023.
Cautionary Statements
This press release may contain forward-looking
statements with respect to Allied, its operations, strategy,
financial performance and condition, and the assumptions underlying
any of the foregoing. These statements generally can be identified
by the use of forward-looking words such as “forecast”, “outlook”,
“may”, “will”, “expect”, “estimate”, “anticipate”, “intends”,
“believe”, “assume”, “plans” or “continue” or the negative thereof
or similar variations. The forward-looking statements in this press
release are not guarantees of future results, operations or
performance and are based on estimates and assumptions that are
subject to risks and uncertainties, including those described under
“Risks and Uncertainties” in Allied’s Annual MD&A, which is
available at www.sedarplus.ca. Those risks and uncertainties
include risks associated with financing and interest rates, access
to capital, general economic conditions and lease roll-over.
Allied’s actual results and performance discussed herein could
differ materially from those expressed or implied by such
statements. These cautionary statements qualify all forward-looking
statements attributable to Allied and persons acting on its behalf.
All forward-looking statements speak only as of the date of this
press release and, except as required by applicable law, Allied has
no obligation to update such statements.
About Allied
Allied is a leading owner-operator of
distinctive urban workspace in Canada’s major cities. Allied’s
mission is to provide knowledge-based organizations with workspace
that is sustainable and conducive to human wellness, creativity,
connectivity and diversity. Allied’s vision is to make a continuous
contribution to cities and culture that elevates and inspires the
humanity in all people.
FOR FURTHER INFORMATION, PLEASE
CONTACT:
Cecilia C. WilliamsPresident & Chief Executive Officer(416)
977-9002cwilliams@alliedreit.com
Nanthini MahalingamSenior Vice President & Chief Financial
Officer(416) 977-9002nmahalingam@alliedreit.com