/NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY NON-CANADIAN
SOURCE/
TORONTO, Aug. 14 /CNW/ - (TSX: RMM.UN) - Retrocom Mid-Market Real Estate
Investment Trust (the "REIT") announced today its financial results for the
three and six months ended June 30, 2007.Financial Highlights
- In the quarter-ended June 30, 2007, the REIT closed the sale of two
properties, Woodbine Place and Driftwood Mall, resulting in a gain on
disposition of approximately $8.8 million on gross proceeds of
approximately $31.1 million.
- The REIT reported a total gain of $21.6 million for the period-to-
date on the sale of nine properties.
- A conditional agreement for gross proceeds of approximately
$13 million was entered into with a purchaser in July 2007 for six
properties located in Kingston, Ontario, all classified as non-core
by Management. This agreement is conditional on financing and final
due diligence.
- Subsequent to the second quarter, the REIT completed its
repositioning efforts at Qwanlin Mall, Yukon, where the mall was
redeveloped to increase occupancy to 100% and reduce common area
expenses.
- The occupancy rate for the second quarter of 2007 decreased slightly
to 91.2% from 91.6% reported in the first quarter of 2006. Management
expects that the REIT will experience short-term fluctuations in
occupancy while properties are repositioned and major leasing plans
are achieved.
- Net Operating Income was $7.2 million for the second quarter and
$13.8 million period-to-date, up from $6.8 million and $13.7 million
reported for the same periods last year. This is primarily due to the
positive impact of an increase in ownership (from 50% to 100%) of
Staples and Lansdowne Plazas in the first quarter of 2007.
- Secured operating line decreased by $20 million from $29.7 million at
December 31, 2006 to $9.7 million on June 30, 2007 as proceeds from
the sale transactions were used to reduce the REIT's exposure to
short-term financing. As of June 30, 2007, the Trust could draw on
the line to a maximum limit of $10 million, subject to certain
security provisions.
- Trust expenses decreased $0.5 million for the quarter and
$1.5 million period-to-date from comparative periods in 2006 due to
significant transaction fees incurred in 2006 and a reduction in
asset management fees following the Trust's decision to internalize
its asset management function in Q1 2006.
- As a result of applying the proceeds of sales to reduce debt, the
REIT has decreased its leverage ratio from 63.3% in the fourth
quarter of 2006, to 62.7% in the first quarter of 2007, and to 59.1%
in the second quarter of 2007. This previously stated goal to reduce
debt is expected to allow the REIT flexibility to reinvest in the
portfolio through Management's aggressive leasing strategy and
repositioning plans. Based on the Trust's current financial position,
should it exercise full debt to gross book value borrowing potential,
approximately $129 million could be made available to fund further
acquisitions.
- Distributions paid to Unitholders in the second quarter of 2007 were
96% of Distributable Income and 107% period-to-date, compared to 99%
and 94% in the same periods last year. The Distributable income
payout ratio was positively impacted by increased operating income
from continuing properties and a decrease in distributions per unit
to $0.60 from $0.82 which became effective in December 2006.
Actual Actual
three three Actual Actual
months months six months six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2007 2006(*) 2007 2006(*)
(unaudited) (unaudited) (unaudited) (unaudited)
($000's) ($000's) ($000's) ($000's)
Rental Revenue and Other
Income $13,993 $12,868 $27,439 $26,327
Property Operating Expenses $6,817 $6,117 $13,676 $12,661
-----------------------------------------------
Net Operating Income $7,176 $6,751 $13,763 $13,666
Trust Expenses $861 $1,351 $1,854 $3,338
-----------------------------------------------
Income before Interest,
Depreciation
& Amortization $6,315 $5,400 $11,909 $10,328
Interest $3,326 $3,277 $6,972 $6,494
Depreciation and
Amortization $4,755 $4,847 $9,357 $9,626
-----------------------------------------------
Loss Before Discontinued
Operations ($1,766) ($2,724) ($4,420) ($5,792)
Income (Loss) from
Discontinued Operations $8,950 ($3,910) $22,397 ($4,259)
-----------------------------------------------
Net Income (Loss) for the
Period and Comprehensive
Income (Loss) $7,184 ($6,634) $17,977 ($10,051)
-----------------------------------------------
Loss Per Unit (Before
Discontinued Operations) ($0.10) ($0.15) ($0.24) ($0.31)
Distributable Income(xx) $2,892 $3,697 $5,212 $7,749
Distributable Income
per Unit:
Basic $0.16 $0.20 $0.28 $0.42
Fully Diluted $0.12 $0.15 $0.21 $0.32
Distributable Income
Payout Ratio 0.96 0.99 1.07 0.94
Funds From Operations(xx) $3,215 $3,248 $5,878 $6,075
Funds From Operations:
Basic $0.17 $0.18 $0.32 $0.33
Fully Diluted $0.13 $0.13 $0.24 $0.25
Funds From Operations
Payout Ratio 0.86 1.12 0.95 1.20Full Financial Results will be available on SEDAR (www.sedar.com) as well
as the Investors Relations section of the REIT's website
(http://www.rmmreit.com/investor_finance.htm).
(*) Previously reported results have been reclassified for discontinued
operations.
(xx) The reconciliations of Distributable Income and Funds From
Operations to Loss for the Year are included in the REIT's MD&A
The REIT's management considers Distributable Income and Funds From
Operations to be an indicative measure in evaluating the REIT's performance.
The table above, however, includes non-GAAP information that should not be
construed as an alternative to net earnings or cash flows from operations and
may not be comparable to similar measures presented by other issuers as there
is no standardized meaning prescribed by GAAP.
Operating Strategy Highlights
"Although the occupancy rate has dropped as expected this quarter, mainly
as a result of surrender by an anchor tenant of 25,000 feet, the REIT's
leasing plan is showing many positive signs," David Fiume, Chief Executive
Officer, stated. Overall in 2007, the REIT has signed renewals for
approximately 115 existing tenancies representing 439,410 square feet of
existing tenancies, at a weighted average net rent of $9.94 per square foot,
an increase of $0.53 per square foot over net rent of $9.41 paid by the same
tenants under the expiring lease. In addition, 36 new tenancies were signed
this year, representing 90,963 square feet, while 26 tenants confirmed the
surrender of 130,846 square feet of leased space (including over 73,000 square
feet of anchor space). The weighted average net rent for new tenants was
$16.30 per square foot, and $8.91 for vacating tenants. This difference is
primarily due to the greater amount of square footage attributable to anchor
tenant space at lower lease rates becoming vacant, while higher yielding CRU
space was filled. Period-to-date rental increases from signed renewals and new
tenancies have resulted in a $0.97 increase in weighted average net rent to
$9.68 from $8.71 per square foot.
The REIT continues to implement its internal restructuring plan, which to
date encompasses a number of property dispositions, acquisitions, refinancings
and an aggressive leasing strategy, with a focus on improving efficiencies and
taking advantage of opportunities in the marketplace as well as within the
REIT portfolio. "We are encouraged by the increase in the net rent per foot
for new tenants and renewals and continue to work on larger leasing
transactions and repositioning," said David Fiume.
Investor Conference Call
A conference call to discuss the results will be held Wednesday
August 15, 2007, at 11:00 AM EST and will be followed by a question and answer
period. The phone numbers for those who wish to participate in the question
and answer period are as follows:
Live Conference Access information:
Local Access: 416-915-9608
Toll-Free Access: 1-866-214-7077
Replay:
Local Access: 416-915-1028
Toll-Free Access: 1-866-244-4494
About Retrocom Mid-Market REIT
Retrocom Mid-Market REIT is an Ontario unincorporated open-end real
estate investment trust which focuses on owning and acquiring mid-market
retail properties in primary and secondary cities across Canada with the
objective of producing a geographically diversified portfolio of properties
with stable and growing cash flows.
This document may contain forward-looking statements, which although
based on Management's best estimates as well as the current operating
environment are subject to risks and uncertainties. As such, terms such as
"anticipate", "believe", "expect", "plan" or other similar words should be
taken as forward-looking statements. As a result of these potential
uncertainties, any future results could differ materially from the predictions
listed herein. Although Retrocom makes every effort to meet our predictions as
listed in this document, we are unable to control certain circumstances such
as economic, competitive or commercial real estate conditions.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy, which may be made only by means of a
prospectus, nor shall there be any sale of the Units in any state, province or
other jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under securities laws of any such
state, province or other jurisdiction. The Units of the Retrocom Mid-Market
REIT have not been, and will not be registered under the U.S. Securities Act
of 1933, as amended, and may not be offered, sold or delivered in the United
States absent registration or an application for exemption from the
registration requirements of U.S. securities laws.
For further information: David Fiume, Chief Executive Officer, Tel:
(416) 741-7999, Fax: (416) 741-7993, E-mail: dfiume@rmmreit.com.
