44th Consecutive Quarter of Growth for Cominar



    
    Second Quarter of Fiscal 2009:
    ------------------------------

    - Increases of 14.2% in operating revenues and 14.7% in net operating
      income
    - Distributable income of $20.6 million, up 10.1%
    - Funds from operations of $23.8 million, up 10.5%
    - Increase of 13.5% in distributions
    - Unit offering for proceeds of $57.5 million

    Event subsequent to June 30, 2009:
    - Closing of a new unit offering for proceeds of $57.5 million

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    TSX - CUF.UN
    

    QUEBEC CITY, Aug. 6 /CNW Telbec/ - Cominar Real Estate Investment Trust
("Cominar" or the "REIT") once again achieved solid growth in the second
quarter ended June 30, 2009.

    
    Financial Highlights
    --------------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Periods ended June 30           Quarter          Cumulative (Six Months)
    (in thousands of
     dollars except per       2009    2008       %     2009     2008       %
     unit amounts)                          Change                    Change
    -------------------------------------------------------------------------
    Operating
     revenues(1)(2)         67,373  58,994    14.2  135,240  116,327    16.3
    Net operating
     income(1)(2)(3)        39,547  34,470    14.7   76,231   65,920    15.6
    Net income(1)            7,715   6,826    13.0   11,757   10,951     7.4
    Recurring distributable
     income(1)(3)           20,626  18,728    10.1   38,071   34,522    10.3
    Recurring funds from
     operations(1)(3)       23,835  21,572    10.5   44,694   40,298    10.9
    Recurring adjusted
     funds from
     operations(1)(3)       20,161  18,192    10.8   37,207   33,874     9.8
    Distributions           18,261  16,095    13.5   34,784   31,464    10.6

    Per unit
    Net income                0.16    0.15     6.7     0.25     0.24     4.2
    Recurring distributable
     income(FD)(3)(4)         0.41    0.40     2.5     0.79     0.75     5.3
    Recurring funds from
     operations(FD)(3)(4)     0.46    0.45     2.2     0.90     0.86     4.7
    Recurring adjusted
     funds from
     operations(FD)(3)(4)     0.40    0.39     2.6     0.77     0.74     4.1
    Distributions (basic)    0.360   0.353     2.0    0.720    0.692     4.0
    -------------------------------------------------------------------------
    (1) Certain figures for 2008 have been modified following the adoption of
        a new accounting policy implemented retroactively.
    (2) Certain figures for 2008 have been reclassified as discontinued
        operations in conformity with GAAP.
    (3) Non-GAAP financial measure. See the reconciliation with the most
        similar GAAP measure included herein.
    (4) Fully diluted.
    -------------------------------------------------------------------------
    

    "Our 2009 second quarter and first six month results reflect solid growth
over the corresponding periods of 2008 and indicate that our real estate
operations continued to post a satisfactory performance despite the economic
situation. The demand for rental space remains fairly good in our portfolio,
which is well diversified on a segmented and geographic basis. We pursued our
property development projects and prudent business strategy while analyzing
any expansion opportunities corresponding to our criteria. Despite tightened
financing conditions, we successfully completed two unit offerings in April
and July 2009, which positions us well to realize potential interesting
expansion projects," indicated Michel Dallaire, President and Chief Executive
Officer of Cominar.

    Operating revenues totalled $67.4 million for the second quarter ended
June 30, 2009, up 14.2%. This increase is due mainly to the contribution of
the office and industrial and mixed-use property acquisitions and developments
completed in 2008 and the beginning of 2009.

    Net operating income amounted to $39.5 million, up 14.7% over the second
quarter of 2008. The operating profit margin stood at 58.7%, up slightly over
the second quarter of 2008, and the same property profit margin held virtually
steady with 2008, at 58.3%.

    Net income amounted to $7.7 million, up 13.0% over the second quarter of
2008. Net income per unit grew by 6.7% to $0.16.

    Distributable income totalled $20.6 million, up 10.1% over the second
quarter of 2008. Recurring distributable income per fully diluted unit
amounted to $0.41, compared with $0.40 for the corresponding quarter of 2008,
an increase of 2.5%.

    Recurring funds from operations totalled $23.8 million, up 10.5% over the
second quarter of 2008, reflecting the contribution of the acquisitions and
developments completed in 2008 and at the beginning of 2009 and 2.7% growth in
same property net operating income. Recurring adjusted funds from operations
per fully diluted unit grew by 2.6% to $0.40, compared with $0.39 for the
second quarter of 2008.

    In the second quarter of 2009, Cominar paid distributions totalling $18.3
million to unitholders, compared with $16.1 million in the corresponding
quarter of 2008, an increase of 13.5%. Distributions per unit amounted to
$0.360, compared with $0.353 in the second quarter of 2008.

    Financial Position
    ------------------

    During the second quarter of 2009, Cominar completed an offering of
4,792,050 units for proceeds of $57.5 million. The net proceeds from the
offering were used to reduce the debt used to finance its ongoing acquisition
and development pipeline. On June 25, 2009, Cominar contracted a mortgage
payable of $20.0 million bearing interest at 5.87%. As at June 30, 2009, the
overall debt ratio stood at 60.9%, which is less than the maximum debt ratio
of 65.0% allowed by the REIT's Contract of Trust when convertible debentures
are outstanding. The annualized interest coverage ratio remained conservative
at 2.60:1. The weighted average contractual interest rate of the long-term
debt was 5.56% as at June 30, 2009, down seven basis points from December 31,
2008.

    Event Subsequent to June 30, 2009
    ---------------------------------

    $57.5 Million Unit Offering -- On July 8, 2009, Cominar closed an
offering of 3,783,500 units for proceeds of $57.5 million. The net proceeds
from the offering were used to reduce the outstanding under current credit
facilities, which debt is used to finance Cominar's ongoing acquisition and
development pipeline. The overall debt ratio stood at 58.0% after this
reduction in bank indebtedness.

    Occupancy Rate of Portfolio Properties
    --------------------------------------

    In the second quarter, the occupancy rate of Cominar's office and retail
properties stood at 94.4% and 97.0% respectively, compared with 94.5% and
97.1% as at December 31, 2008, whereas the occupancy rate of its industrial
and mixed-use properties was 93.0%, compared with 94.0% as at December 31,
2008, down 1.0% because the properties in the Montréal region were affected by
the economic slowdown. Thus, as at June 30, 2009, the portfolio occupancy rate
stood at 94.0%. At the end of the second quarter, the leasing team had renewed
46.1% of leases expiring in 2009. In addition, Cominar signed new leases
representing 0.4 million square feet of leasable space.

    Expansion of Property Portfolio
    -------------------------------

    On January 16, 2009, Cominar acquired a 227,260-square-foot office
property located at 8400 Décarie Boulevard in Montréal, for a $36.8 million
purchase price, and the capitalization rate is 8.8%. This property is attached
to another Cominar property and these two buildings are fully leased to the
same tenant. For this acquisition, Cominar assumed a $13.5 million mortgage
payable bearing interest at 5.55%, and the balance of the purchase price was
paid cash.
    Ongoing developments in the Québec City and Montréal regions represent an
additional leasable area of approximately 0.7 million square feet and a total
estimated investment of $97.4 million. Their average capitalization rate is
estimated at 9.4%, which is much higher than current market rates for similar
properties. Considering the current advancement of these developments, Cominar
does not foresee any significant budget overruns.

    Distribution Reinvestment Plan
    ------------------------------

    The REIT has a distribution reinvestment plan for its unitholders that
allows participants to reinvest their monthly distributions in additional
Trust units. Participants receive an effective discount of 5% of distributions
in the form of additional units. Information and enrolment forms are available
at www.cominar.com.

    Additional Financial Information
    --------------------------------

    Cominar's interim consolidated financial statements and the management's
discussion and analysis for the second quarter and six-month period ended June
30, 2009 will be filed with SEDAR at www.sedar.com and are available on
Cominar's website at www.cominar.com.

    August 6, 2009 Conference Call
    ------------------------------

    On Thursday, August 6, 2009, at 11:30 a.m. (EDT), Cominar's management
will hold a conference call to discuss the results for the second quarter of
2009. Anyone who is interested may take part in this call by dialing 1 (800)
251-6546. A presentation of the results will be available before the
conference call on the REIT's website at www.cominar.com under the title
"Conference Call". The event will also be simultaneously webcast on Cominar's
website and archived for 90 days.

    PROFILE as at August 6, 2009
    ----------------------------

    Cominar is the largest commercial property owner in the Province of
Quebec. The REIT owns a real estate portfolio of 215 high-quality properties,
consisting of 38 office, 38 retail and 139 industrial and mixed-use buildings
that cover a total area of over 18.5 million square feet in the Greater Québec
City, Montréal and Ottawa areas. Cominar's objectives are to deliver growing
cash distributions to its unitholders and to maximize unitholder value through
proactive management and the growth of its portfolio.

    Forward-Looking Statements
    --------------------------

    This press release may contain forward-looking statements with respect to
Cominar and its operations, strategy, financial performance and financial
condition. These statements generally can be identified by the use of
forward-looking words such as "may", "will", "expect", "estimate",
"anticipate", "intend", "believe" or "continue" or the negative thereof or
similar variations. The actual results and performance of Cominar discussed
herein could differ materially from those expressed or implied by such
statements. Such statements are qualified in their entirety by the inherent
risks and uncertainties surrounding future expectations. Some important
factors that could cause actual results to differ materially from expectations
include, among other things, general economic and market factors, competition,
changes in government regulation and the factors described under "Risk
Factors" in the Annual Information Form of Cominar. The cautionary statements
qualify all forward-looking statements attributable to Cominar and persons
acting on its behalf. Unless otherwise stated, all forward-looking statements
speak only as of the date of this press release.

    Non-GAAP Financial Measures
    ---------------------------

    Net operating income (NOI), distributable income (DI), funds from
operations (FFO) and adjusted funds from operations (AFFO) are not measures
recognized under Canadian generally accepted accounting principles (GAAP) and
do not have standardized meanings prescribed by GAAP. NOI, DI, FFO and AFFO
computed by Cominar may differ from similar computations as reported by other
similar organizations and, accordingly, may not be comparable to similar
measures reported by such organizations. The following table shows the
reconciliation of DI, FFO and AFFO with the most similar GAAP measures:

    
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Quarters ended June 30            2009                      2008
                                DI     FFO    AFFO       DI      FFO    AFFO
    -------------------------------------------------------------------------

    Net income (GAAP)        7,715   7,715   7,715    6,826    6,826   6,826
    + Amortization of
      income properties     13,731  13,731  13,731   12,634   12,634  12,634
    + Amortization of
      capitalized leasing
      costs                      -   2,389   2,389        -    2,112   2,112
    - Amortization of
      below-market leases     (175)      -    (175)    (126)       -    (126)
    + Compensation expense
      related to unit
      option plan              150       -     150      171        -     171
    + Accretion of liability
      component of
      convertible debentures    10       -       -        9        -       -
    - Rental income -
      straight-line
      accounting for leases   (774)      -    (774)    (754)       -    (754)
    - Amortization of fair
      value adjustments on
      assumed indebtedness     (31)      -       -      (32)       -       -
    - Amortization of
      capitalized leasing
      costs                      -       -  (2,389)       -        -  (2,112)
    - Capital expenditures -
      maintenance of ability
      to generate rental
      income                     -       -    (486)       -        -    (559)
    -------------------------------------------------------------------------
                            20,626  23,835  20,161   18,728   21,572  18,192
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Complete consolidated financial statements, including accompanying notes,
are available on Cominar's website at www.cominar.com under "Investor
Relations - Interim Reports".


    COMINAR REAL ESTATE INVESTMENT TRUST

    CONSOLIDATED BALANCE SHEETS

    (unaudited, in thousands of dollars)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                         As at         As at
                                                       June 30,  December 31,
                                                          2009          2008
                                                             $             $
    -------------------------------------------------------------------------

    ASSETS
    Income properties
      Buildings                                      1,237,713     1,228,770
      Land                                             202,116       199,211
      Intangible assets                                 72,375        79,106
                                                   ------------  ------------
                                                     1,512,204     1,507,087
    Properties under development                       113,280        72,945
    Land held for future development                    42,372        20,857
    Capitalized leasing costs and other assets          47,301        44,141
    Prepaid expenses                                    20,844         1,954
    Accounts receivable                                 26,114        21,352
    -------------------------------------------------------------------------
                                                     1,762,115     1,668,336
    -------------------------------------------------------------------------

    LIABILITIES
    Mortgages payable                                  782,278       730,711
    Convertible debentures                             204,445       203,723
    Bank indebtedness                                  189,327       186,987
    Accounts payable and accrued liabilities            35,233        34,987
    Distributions payable to unitholders                 6,084             -
    -------------------------------------------------------------------------
                                                     1,217,367     1,156,408
    -------------------------------------------------------------------------

    UNITHOLDERS' EQUITY
    Unitholders' equity                                544,748       511,928
    -------------------------------------------------------------------------
                                                     1,762,115     1,668,336
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS OF
    UNITHOLDERS' EQUITY

    For the periods ended June 30
    (unaudited, in thousands of dollars)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                               Cumulative
                                             Quarter          (six months)
    -------------------------------------------------------------------------
                                          2009      2008      2009      2008
                                             $         $         $         $
    -------------------------------------------------------------------------

    Unitholders' contributions
    Balance, beginning of period       601,221   592,304   600,965   591,172
    Issue of units                      57,970     4,151    58,226     5,283
    Underwriters' fees and offering
     expenses                           (2,702)        -    (2,702)        -
    -------------------------------------------------------------------------
    Balance, end of period             656,489   596,455   656,489   596,455
    -------------------------------------------------------------------------

    Cumulative net income
    Balance, beginning of period       276,441   251,904   272,399   247,779
    Change due to new accounting policy      -      (365)        -      (365)
    Net income                           7,715     6,826    11,757    10,951
    -------------------------------------------------------------------------
    Balance, end of period             284,156   258,365   284,156   258,365
    -------------------------------------------------------------------------

    Cumulative distributions
    Balance, beginning of period      (379,340) (313,449) (362,817) (298,080)
    Distributions to unitholders       (18,261)  (16,095)  (34,784)  (31,464)
    -------------------------------------------------------------------------
    Balance, end of period            (397,601) (329,544) (397,601) (329,544)
    -------------------------------------------------------------------------

    Contributed surplus
    Balance, beginning of period         1,242       637     1,069       513
    Unit option plan                       150       115       323       239
    -------------------------------------------------------------------------
    Balance, end of period               1,392       752     1,392       752
    -------------------------------------------------------------------------

    Other equity component
    Equity component of convertible
     debentures                            312       312       312       312
    -------------------------------------------------------------------------
    Total unitholders' equity          544,748   526,340   544,748   526,340
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS OF INCOME
    AND COMPREHENSIVE INCOME

    For the periods ended June 30
    (unaudited, in thousands of dollars except per unit amounts)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                               Cumulative
                                             Quarter          (six months)
    -------------------------------------------------------------------------
                                          2009      2008      2009      2008
                                             $         $         $         $
    -------------------------------------------------------------------------

    Operating revenues
    Rental revenue from income
     properties                         67,373    58,994   135,240   116,327
    -------------------------------------------------------------------------

    Operating expenses
    Operating costs                     11,757    10,248    26,644    22,207
    Realty taxes and services           15,211    13,578    30,642    26,910
    Property management expenses           858       698     1,723     1,290
    -------------------------------------------------------------------------
                                        27,826    24,524    59,009    50,407
    -------------------------------------------------------------------------

    Operating income before the
     undernoted                         39,547    34,470    76,231    65,920
    -------------------------------------------------------------------------

    Interest on borrowings              14,533    12,002    29,229    23,852
    Depreciation of income properties   13,731    12,622    27,950    25,081
    Amortization of capitalized
     leasing costs                       2,389     2,106     4,987     4,230
    Amortization of other assets            91        72       182       134
    -------------------------------------------------------------------------
                                        30,744    26,802    62,348    53,297
    -------------------------------------------------------------------------

    Operating income from real estate
     assets                              8,803     7,668    13,883    12,623
    -------------------------------------------------------------------------

    Trust administrative expenses       (1,161)     (984)   (2,254)   (1,863)

    Other revenues                          73       124       128       175
    -------------------------------------------------------------------------

    Net income from continuing
     operations                          7,715     6,808    11,757    10,935

    Net income from discontinued
     operations                              -        18         -        16
    -------------------------------------------------------------------------

    Net income and comprehensive income  7,715     6,826    11,757    10,951
    -------------------------------------------------------------------------

    Basic net income per unit            0.155     0.150     0.246     0.242
    -------------------------------------------------------------------------

    Diluted net income per unit          0.155     0.149     0.246     0.239
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS
    OF CASH FLOWS

    For the periods ended June 30
    (unaudited, in thousands of dollars)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                               Cumulative
                                             Quarter          (six months)
    -------------------------------------------------------------------------
                                          2009      2008      2009      2008
                                             $         $         $         $
    -------------------------------------------------------------------------

    OPERATING ACTIVITIES
    Net income                           7,715     6,826    11,757    10,951
    Items not affecting cash:
    Depreciation of income properties   13,731    12,634    27,950    25,104
    Amortization of below-market leases   (175)     (126)     (379)     (253)
    Amortization of capitalized leasing
     costs                               2,389     2,112     4,987     4,243
    Amortization of capitalized
     financing costs and other assets      797       493     1,508       928
    Amortization of fair value
     adjustments on assumed indebtedness   (31)      (32)      (62)      (63)
    Accretion of liability component of
     convertible debentures                 10         9        20        18
    Compensation expense related to
     unit option plan                      150       171       323       301
    -------------------------------------------------------------------------
                                        24,586    22,087    46,104    41,229
    -------------------------------------------------------------------------

    Change in non-cash working capital
     items                             (18,301)   (4,298)  (23,103)  (18,888)
    -------------------------------------------------------------------------
                                         6,285    17,789    23,001    22,341
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Additions to income properties      (4,248)  (33,377)  (31,021)  (56,618)
    Additions to properties under
     development and land held for
     future development                (22,599)   (5,090)  (51,529)  (10,997)
    Net proceeds on disposal of share
     in a property held in co-ownership  2,015         -     2,015         -
    Capitalized leasing costs           (4,652)   (4,352)   (8,888)   (8,926)
    Other assets                          (132)   (1,081)     (226)   (1,621)
    -------------------------------------------------------------------------
                                       (29,616)  (43,900)  (89,649)  (78,162)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Mortgages payable                   19,844    81,368    94,162   111,232
    Repayment of mortgages payable      (4,863)  (84,635)  (56,409) (139,863)
    Bank indebtedness                  (29,236)   41,421     2,071   111,926
    Net proceeds from issue of units    54,941     2,850    54,929     3,422
    Distributions to unitholders       (17,355)  (14,893)  (28,105)  (30,896)
    -------------------------------------------------------------------------
                                        23,331    26,111    66,648    55,821
    -------------------------------------------------------------------------

    Net change in cash and cash
     equivalents                             -         -         -         -
    Cash and cash equivalents,
     beginning of period                     -         -         -         -
    Cash and cash equivalents, end
     of period                               -         -         -         -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
    %SEDAR: 00010204EF




For further information:

For further information: Michel Dallaire, P.Eng., President and Chief
Executive Officer, (418) 681-8151, mdallaire@cominar.com; Michel Berthelot,
CA, Executive Vice President and Chief Financial Officer, (418) 681-8151,
mberthelot@cominar.com

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