President and CEO Appointed to the Board of Trustees
MONTREAL, Nov. 3, 2011 /CNW Telbec/ - CANMARC Real Estate Investment
Trust (TSX: CMQ.UN) ("CANMARC" or the "REIT") today reported strong
growth in its financial and operating results for the third quarter of
The REIT also announced that Mr. James W. Beckerleg, President and Chief
Executive Officer of the REIT, has been appointed to the Board of
Trustees, effective November 2, 2011. As founding CEO and leader of
the management team, Mr. Beckerleg will sit as a related Trustee.
"We are pleased to have Jim Beckerleg join us on the Board of Trustees,"
said Karen A. Prentice, Chair of the Board of Trustees. "Mr.
Beckerleg's appointment reaffirms the REIT's commitment to strong
governance and strategic leadership in the real estate sector",
declared Mrs. Prentice. "Jim brings to the Board a wide array of
expertise with a depth of experience in real-estate corporate finance
and acquisitions, having served as an executive and director of several
"Our third-quarter results reflect the full benefit of our acquisitions
over the past year. The investment properties we acquired are accretive
to the REIT'S net operating income, "said Jim Beckerleg, President and
Chief Executive Officer. "During the quarter, we became CANMARC, a
brand that reflects our mission of building and operating a Canadian
commercial real estate portfolio with landmark and other quality
properties. We continue to build an active pipeline of potential
acquisitions and look forward to adding properties in both the office
and retail sectors."
September 30, 2011
September 30, 2010
(in thousands, except per unit items)
Net operating income ("NOI")
Funds from operations ("FFO")
Adjusted funds from operations ("AFFO")
Basic AFFO per unit
Diluted AFFO per unit
Total distributions per unit declared during the quarter
AFFO payout ratio *
* : A decrease in the AFFO payout ratio (distributions per Unit and
Class B LP Unit divided by diluted AFFO per unit) compared to the
previous year represents a positive variance.
Full financial statements and management's discussion and analysis of
results will be posted on SEDAR at www.sedar.com and on the REIT's website at www.canmarc.ca.
NOI was $26.9 million for the third quarter, a 37.3% increase compared
to the same period in 2010. The increase is mainly due to the impact of
several acquisitions made during the past year. The acquisitions
increased the REIT's commercial gross leasable area (GLA) by 21.4% from
approximately 6.6 million square feet at July 1, 2010 to approximately
8.0 million square feet at September 30, 2011.
The AFFO payout ratio of 92.2% represents a 6.6% improvement over the
98.8% payout ratio recorded in the second quarter of 2011. The
improvement is due to the acquisitions completed in the second quarter
of 2011, which contributed fully to the REIT's operating results during
the third quarter this year.
On September 13, 2011, the REIT closed a bought-deal equity financing
for net proceeds of approximately $36.6 million. The net proceeds were
used to repay debt, fund acquisitions and for general purposes of the
REIT. Units were sold at a price of $11.50 per Unit, resulting in a
total of 3,325,000 Units being issued. The proceeds from the equity
issue had a minimal impact on the REIT's operating results in the
Occupancy rates for the REIT's 83 commercial income properties were
relatively stable during the third quarter, increasing slightly to
95.9% at September 30, 2011 from 95.5% at June 30, 2011. However, there
is a 1% increase in occupancy rate at September 30, 2011 compared to
the 94.9% registered at September 30, 2010.
The average lease term to maturity on the REIT's commercial properties
was approximately 8.6 years at September 30, 2011, consistent with the
Debt as a percentage of gross book value is at 49.5%, which remains
below the REIT's target range of 55% to 60%.
On August 2, 2011, the REIT announced that it had discontinued the
position of Executive Chairman. The Board of Trustees further announced
that Karen A. Prentice had been appointed as the first non-executive
Chair of the REIT.
On September 27, 2011 the REIT announced that it had changed its name to
CANMARC Real Estate Investment Trust.
On October 5, 2011, the REIT closed a transaction to acquire a 100
percent interest in a portfolio of 29 neighborhood shopping centres, of
which 24 are leased and anchored by the Jean Coutu Group, for a gross
purchase price of $114.9 million excluding closing and transaction
On October 18, 2011, the REIT closed a transaction to sell its
non-strategic Atlantic-Provinces-based multi- family residential
portfolio for approximately $65 million.
The REIT's management team will hold a conference call today at 11 a.m.
(EDT) to discuss the results for the third quarter. To access the
conference call, please call 1-800-704-5375. A taped replay of the call
will be available until December 3, 2011 by dialling 1-416-626-4100 or
1-800-558-5253 and entering the playback code 21544038. An audio replay
of the conference call will also be available in podcast format in the
Investors section of the REIT's website at www.canmarc.ca.
About CANMARC Real Estate Investment Trust
CANMARC (www.canmarc.ca) is an unincorporated open-ended real estate investment trust
established pursuant to a declaration of trust under the laws of the
Province of Quebec. Managed internally, CANMARC owns a portfolio of
Canadian income-producing commercial properties, consisting of retail
and office properties with certain industrial properties. In total,
CANMARC properties comprise approximately 8.7 million square feet of
commercial gross leasable area and 464 multi-family residential units
located in Quebec, Atlantic Canada, Western Canada and Ontario.
This news release may contain forward-looking information within the
meaning of applicable securities legislation. Forward-looking
information is based on a number of assumptions and is subject to a
number of risks and uncertainties, many of which are beyond the REIT's
control that could cause actual results and events to differ materially
from those that are disclosed in or implied by such forward-looking
information. Such risks and uncertainties include, but are not limited
to, the factors discussed under "Risk Factors" in the REIT's latest
annual information form.
The REIT's objectives and forward-looking statements are based on
certain assumptions, including that (i) the REIT will receive financing
on favourable terms; (ii) the future level of indebtedness of the REIT
and its future growth potential will remain consistent with the REIT's
current expectations; (iii) there will be no changes to tax laws
adversely affecting the REIT's financing capacity or operations; (iv)
the impact of the current economic climate and the current global
financial conditions on the REIT's operations, including its financing
capacity and asset value, will remain consistent with the REIT's
current expectations; (v) the performance of the REIT's investments in
Canada will proceed on a basis consistent with the REIT's current
expectations; and (vi) capital markets will provide the REIT with
readily available access to equity and/or debt.
The forward-looking statements contained in this news release are
expressly qualified in their entirety by this cautionary statement. All
forward-looking statements in this press release are made as of the
date of this press release. The REIT, except as required by applicable
securities legislation, does not undertake to update any such
forward-looking information whether as a result of new information,
future events or otherwise. Additional information about these
assumptions and risks and uncertainties is contained in the REIT's
filings with securities regulatory authorities, including its latest
annual information form, which are available on SEDAR at www.sedar.com.
Note regarding Non-IFRS Financial Measures
Funds from operations ("FFO"), adjusted funds from operations ("AFFO")
and net operating income ("NOI") are not measures recognized under IFRS
and do not have standardized meanings prescribed by IFRS. FFO, AFFO and
NOI are supplemental measures of a Canadian real estate investment
trust's performance and the REIT believes that FFO, AFFO and NOI are
relevant measures of its ability to earn and distribute cash returns to
the unitholders. The IFRS measurement most directly comparable to FFO,
AFFO and NOI are cash flow from operating activities and net income.
FFO is defined as net income in accordance with IFRS, excluding
distributions on Class B LP Units, fair value adjustments relating to
Class B LP Units, investment property and long-term investments,
bargain purchase gain, expenses associated with business combinations,
sales of investment property, and extraordinary items, plus
depreciation and amortization, impairment provisions and after
adjustments for equity accounted entities, joint ventures and
non-controlling interests, if any, calculated to reflect FFO on the
same basis as consolidated properties.
FFO calculated from net income in accordance with IFRS differs from FFO
calculated from net income in accordance with Canadian GAAP as reported
in prior MD&A's. FFO, as currently presented, no longer includes net
amortization of above and below market leases. In-place leases are
included in the value of investment property in accordance with IFRS
and are not separately recorded and amortized. Additionally,
depreciation expense associated with property, plant and equipment is
now added back to calculate FFO based on IFRS, and was previously
excluded from the calculation based on Canadian GAAP.
AFFO is defined as FFO subject to certain adjustments, including: (i)
amortization of fair value mark-to-market adjustments on mortgages
acquired, amortization of deferred financing and leasing costs, and
compensation expense related to unit plans; (ii) adjusting for any
differences resulting from recognizing property incomes on a straight
line basis; (iii) adjusting for non-recurring costs associated with the
IFRS conversion, termination of the executive chairman position and
rebranding costs; and (iv) deducting maintenance capital expenditures
and leasing costs, as determined by the REIT, net of the allocation of
cash from reserves for capital expenditure programs. Other adjustments
may be made to AFFO as determined by the Trustees of the REIT in their
discretion. There has been no significant change in calculated AFFO
after adoption of IFRS, other than the exclusion of non-recurring costs
associated with the IFRS conversion, and depreciation expense
associated with property, plant and equipment which is now added back
to calculate AFFO based on IFRS, and was previously excluded from the
calculation based on Canadian GAAP.
"NOI" is defined as property income, which includes rental income plus
service charge income, less directly attributable property operating
expenses. There has been no significant change in calculated NOI after
adoption of IFRS, other than that NOI no longer includes net
amortization of above and below market leases, as these items are
included in the fair value of investment property in accordance with
IFRS, and are not separately recorded and amortized.
FFO, AFFO and NOI should not be construed as alternatives to net income
or cash flow from operating activities determined in accordance with
IFRS as indicators of the REIT's performance. The REIT's method of
calculating FFO, AFFO and NOI may differ from other issuers' methods
and accordingly may not be comparable to measures used by other
SOURCE CANMARC REAL ESTATE INVESTMENT TRUST
For further information:
James W. Beckerleg
President and Chief Executive Officer
Gordon G. Lawlor, CA
Executive Vice President, Chief Financial
Officer and Secretary
Mélanie Tardif, CMA
NATIONAL Public Relations