Edgefront Real Estate Investment Trust announces Q1 2014 results

TORONTO and CALGARY, May 20, 2014 /CNW/ - Edgefront Real Estate Investment Trust (the "REIT") (TSXV: ED.UN) announced today its results for the first quarter ending March 31, 2014.

Quarterly Highlights

  • Completed conversion from Edgefront Realty Corp. to Edgefront Real Estate Investment Trust
  • Completed the acquisition of 10 industrial properties for a $68,000,000 purchase price; new $45,000,000 credit facility; issued 17,000,000 units from treasury as purchase consideration
  • Commenced payment of distributions to unitholders and holders of Class B LP Units
  • Implemented distribution reinvestment plan
  • AFFO payout Ratio of 85.7%
  • Conservative debt to total assets ratio of 46.8%

Summary of Results

Included in the table that follows and elsewhere in this news release are non-IFRS measures that should not be construed as an alternative to net income / loss, cash from operating activities or other measures of financial performance calculated in accordance with IFRS, and may not be comparable to similar measures as reported by other issuers. Readers are encouraged to refer to the REIT's MD&A for further discussion of the non-IFRS measures presented. 


Three Months ended

March 31, 2014

Three months ended

March 31, 2013

Financial Results

$

$

Funds from operations (FFO)

637,694

(12,504)

Adjusted funds from operations (AFFO)

785,640

(12,319)

Distributions declared (1)

673,083

-

Weighted average units outstanding – basic and diluted (2)

17,134,655

2,750,000

Distributions per unit (1), (23)

0.039

N/A

FFO per unit (2)

0.037

(0.005)

AFFO per unit (2)

0.046

(0.004)

AFFO payout ratio (1)

85.7%

N/A

Debt to total assets ratio

46.8%

8.9%




(1) Includes distributions payable to holders of Class B LP Units which are accounted for as interest expense in the unaudited condensed consolidated interim financial statements.

(2) Weighted average number of units for March 31, 2013 has been adjusted to reflect the 20 for 1 exchange of shares of the Corporation for units of the REIT in connection with the plan of arrangement completed January 13, 2014, and includes the Class B LP Units.

 


Three months ended

March 31, 2014

Three months ended

March 31, 2013

Financial Results

$

$

Rental income

1,528,471

10,498

Net rental income

1,264,439

5,857

Net income

(288,921)

(42,067)

Net income for the three months ended March 31, 2014 was reduced by a fair value adjustment of investment properties, equal to the acquisition costs incurred in relation to the acquisition completed in the quarter of $915,346. Excluding this item, net income would have been $626,425.

"We are pleased to have completed the acquisition of ten industrial properties in Western Canada that provide a stable income stream from long-term leases without the need to obtain public market financing. The acquisition of the RTL Westcan properties gives the REIT the scale required to generate stable cash flows and a strong yield for our unitholders. Through our strategic partnership with TriWest Capital Partners, the REIT has access to a pipeline of additional unmarketed acquisition targets, which the REIT will look to acquire where it can do so accretively and where there is a fit with the REIT's strategy of acquiring quality industrial properties." said Kelly Hanczyk, the REIT's President and Chief Executive Officer. 

Acquisitions Drive Growth in Revenues and Results from Operations

Rental income increased to $1,528,471 in the quarter as compared to $10,498 in the same quarter of 2013, with the acquisition of 10 industrial properties in Western Canada providing revenues for 77 days in the quarter from their acquisition on January 14, 2014. 

Net rental income grew to $1,264,439 in the quarter as compared to $5,857 in same quarter of 2013 and $126,677 in the fourth quarter of 2013 is attributable to acquisitions. 

The REIT generated FFO and AFFO of $637,694 and $785,640 respectively in the quarter ended March 31, 2014, with FFO and AFFO per unit of $0.037 and $0.046 respectively. 

On February 4, 2014, the REIT declared its initial distribution of $0.00742 per unit, for the period from January 14, 2014 to January 31, 2014, payable on February 28, 2014 to unitholders of record as of February 14, 2014.  At the same time the REIT declared a regular monthly distribution for the period from February 1, 2014 to February 28, 2014 in the amount of $0.01333 per unit, representing $0.16 per unit on an annualized basis. Monthly distributions in the amount of $0.0133 per unit have since also been declared for the months of March 2014, April 2014 and May 2014, payable April 15, 2014, May 15,2014, and June 16, 2014 respectively.

The REIT's AFFO payout ratio for the quarter was 85.7%.

Balance Sheet and Liquidity

The REIT entered into a $45,000,000 revolving credit facility to finance the acquisition in the quarter. At March 31, 2014, $34,071,376 was drawn against the revolving facility. The REIT's debt to total assets ratio was 46.8% at March 31, 2014, and its interest coverage ratio for the quarter was 2.74 times. The REIT intends to maintain a debt to total assets ratio of less than 55%.

About the REIT

Edgefront REIT is a growth oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership and management of industrial properties located in primary and secondary markets in North America, with an initial focus on Western Canada. Edgefront REIT currently owns a portfolio of 12 properties comprising approximately 470,000 square feet of rentable area.

The REIT has approximately 19,464,023 units issued and outstanding. Additionally, there are 360,000 Class B LP units of Edgefront Limited Partnership issued and outstanding.

FORWARD LOOKING STATEMENTS

Certain statements contained in this new release constitute forward-looking statements which reflect the REIT's current expectations and projections about future results. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release.  Such forward-looking statements are based on a number of assumptions that may prove to be incorrect.

While the REIT anticipates that subsequent events and developments may cause its views to change, the REIT specifically disclaims any obligation to update these forward-looking statements except as required by applicable law. These forward-looking statements should not be relied upon as representing the REIT's views as of any date subsequent to the date of this news release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the REIT.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: Edgefront Real Estate Investment Trust

For further information: Please contact Kelly C. Hanczyk, President and CEO at (403) 817-9497 or Rob Chiasson, CFO at (403) 817-9496.

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Edgefront Real Estate Investment Trust

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