Cominar - Record Expansion and Performance in 2007



    
    - Increases of 43.7% in operating revenues and of 42.5% in net operating
      income
    - Distributable income of $63.2 million and adjusted funds from
      operations of $72.3 million
    - Increase of 6.8 million square feet in leasable space
    - Increase of $689.5 million in gross book value
    - Ongoing and upcoming developments representing a total investment of
      $144.2 million
    

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    TSX - CUF.UN

    QUEBEC CITY, March 13 /CNW Telbec/ - Cominar Real Estate Investment Trust
("Cominar" or the "REIT") announces excellent results for the fourth quarter
and fiscal year ended December 31, 2007.

    
    2007 Financial Highlights
    -------------------------

    -------------------------------------------------------------------------
    For the year ended December 31,             2007        2006    % Change
    (in thousands of dollars
     except per-unit amounts)
    -------------------------------------------------------------------------

    Operating revenues                       182,124     126,750        43.7
    Net operating income                     109,771      77,051        42.5
    Distributable income                      63,237      48,061        31.6
    Funds from operations                     72,338      55,655        30.0
    Adjusted funds from operations            60,032      45,692        31.4
    Distributions                             55,454      42,724        29.8

    Per unit (fully diluted)
    Distributable income                        1.49        1.35        10.4
    Funds from operations                       1.68        1.54         9.1
    Adjusted funds from operations              1.42        1.29        10.1
    Distributions (basic)                       1.30        1.23         5.8
    -------------------------------------------------------------------------
    Note: Certain figures for fiscal 2006 have been reclassified in
          conformity with GAAP.
    -------------------------------------------------------------------------


    For the fiscal year ended December 31, 2007, operating revenues totalled
$182.1 million, up 43.7%. This significant increase is due mainly to the
contribution, since June 2007, of the office properties and the industrial and
mixed-use properties acquired from the Alexis Nihon portfolio, as well as the
other acquisitions completed and integrated during fiscal 2006 and 2007.
    Net operating income ("NOI") amounted to $109.8 million, up over 42.5%
fiscal 2006, whereas the operating profit margin was 60.3% of operating
revenues, which is similar to that of the previous year. As a financial
performance indicator, Cominar's operating profit margins remain among the
highest of Canadian real estate investment trusts, thanks to the REIT's
rigorous management.
    Distributable income ("DI") totalled $63.2 million for fiscal 2007, up
31.6% over the previous year. DI per fully diluted unit amounted to $1.49,
compared with $1.35 in 2006, an increase of 10.4%.
    Funds from operations ("FFO") totalled $72.3 million, a 30.0% increase
that reflects the contribution of the acquisitions and developments completed
in 2007 as well as strong organic growth. FFO per fully diluted unit amounted
to $1.68, up 9.1% over $1.54 in 2006,
    Adjusted funds from operations ("AFFO") increased to $60.0 million from
$45.7 million in 2006. AFFO per fully diluted unit grew 10.1%.
    In 2007, Cominar paid total distributions of $55.5 million to unitholders,
compared with $42.7 million in 2006, an increase of 29.8%. The distribution
per unit amounted to $1.30, up from $1.23 in 2006.
    "Fiscal 2007 was highlighted by a record growth and expansion, during
which our portfolio increased by 67.0% or 6.8 million square feet,
representing a $689.5 million investment in high-quality acquisitions and
developments yielding immediate growth and potential for the long term. The
gross book value of Cominar's real estate portfolio grew 81.5% to $1.5 billion
as at December 31, 2007. Over the past five years, including reinvested
distributions and unit price appreciation, Cominar has achieved an average
annual return per unit of 27.7%, which is a very solid performance," indicated
Michel Dallaire, President and Chief Executive Officer of Cominar.
    As at December 31, 2007, Cominar maintained a debt ratio of 55.9%,
convertible debentures included, which is less than the maximum of 65.0%
allowed by its Contract of Trust. Management believes that this disciplined
and conservative practice contributes to ensure the stability of future
distributions and prudent management of the REIT.

    Fourth-Quarter Results
    ----------------------

    For the fourth quarter ended December 31, 2007, operating revenues
totalled $53.3 million, up from $32.3 million for the comparable period of
2006. This strong increase of 65.2% reflects the contribution of the completed
acquisitions and developments as well as excellent organic growth. NOI grew
59.0% to $32.4 million. DI amounted to $17.9 million, compared with
$13.4 million for the corresponding period of 2006, an increase of 33.5%. DI
per fully diluted unit for the fourth quarter of 2007 grew 8.3% to $0.39.
    AFFO was up 39.6% over the fourth quarter of 2006. AFFO per fully diluted
unit grew 15.2% to $0.38.

    Operational Highlights
    ----------------------

    Cominar consistently strives to maximize occupancy rates throughout its
portfolio and has successfully maintained a 95.0% average in occupancy since
its inception. As at December 31, 2007, occupancy stood at 94.7%, compared
with 94.4% as at December 31, 2006, an increase of 0.3%. Leasing activity
remained strong across the REIT's portfolio in 2007, especially in the retail
sector where 95.2% of expiring leases were renewed. The leasing team stepped
up its efforts to renew an aggregate 82.1% of leases expiring in 2007, thereby
achieving a highly satisfactory performance. Cominar also signed new leases
representing 0.8 million square feet of space.

    Acquisitions and Developments Completed in 2007
    -----------------------------------------------

    In 2007, Cominar added 67 properties to its portfolio, representing more
than 6.8 million square feet of leasable space, including the 35 industrial
and mixed-use and 19 office properties acquired in June and July from Alexis
Nihon Real Estate Investment Trust and the other 13 properties acquired during
the year. Cominar also completed four development projects in 2007. Including
the land acquired for future development, Cominar invested $689.5 million in
the expansion of its real estate portfolio during the year.
    These completed acquisitions and developments contributed to increases of
67.0% in the portfolio's total leasable space and of 81.5% in the gross book
value of Cominar's properties, which grew from $846.0 million to
$1.535 billion as at December 31, 2007. While maintaining its dominant
position in the Quebec City area, the Trust continued to build its presence in
the Montreal region and made its first acquisitions in the Ottawa region. For
the fiscal year ended December 31, 2007, properties located in the Quebec City
area accounted for 48.5% of net operating income, compared with 65.9% in 2006;
properties located in the Montreal region accounted for 46.9%, compared with
34.1% in 2006, whereas those located in the Ottawa region accounted for 4.6%
of net operating income.

    Ongoing and Upcoming Developments
    ---------------------------------

    As at March 13, 2008, Cominar had four property development projects in
progress in the Montreal region, representing 0.2 million square feet and a
$23.4 million investment. In addition, to take advantage of the strong economy
in the Greater Quebec City Area, Cominar initiated in 2008 large-scale
projects on three properties, some phases of which are already under way. The
total investment for these construction and development projects over the next
two years should total approximately $144.2 million at an average
capitalization rate of 9.4%, which is much higher than current market rates
for similar properties.

    Subsequent Events
    -----------------

    In February 2008, Cominar completed a transaction to purchase the residual
balance of an interest in industrial and mixed-use properties located in
Montreal. The consideration for the transaction amounted to $18.3 million.
    Also in February 2008, Cominar acquired land covering an area of 212,000
square feet, on which a 28,600-square-foot industrial and mixed-use property
will be built. This property will be fully occupied by a single tenant.

    Outlook
    -------

    "In 2008, we will apply the successful growth strategy that has positioned
us as the leading commercial property owner in Quebec and enabled us to
achieve a solid performance year after year. We will pursue our growth by
taking advantage of new income property acquisition opportunities in our three
sectors, while respecting our rigorous selection criteria and completing
value-enhanced development projects. We will also continue to focus on
proactive leasing in order to optimize our recently acquired properties
through tight cost controls and further operating efficiencies," concluded
Michel Dallaire.

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

    Cominar's consolidated financial statements and the management's
discussion and analysis for the fiscal year ended December 31, 2007 will be
filed with SEDAR at www.sedar.com and are available on Cominar's website at
www.cominar.com.

    March 13, 2008 Conference Call
    ------------------------------

    On Thursday, March 13, 2008, at 11:30 a.m. (EDT), Cominar's management
will hold a conference call to discuss the results for fiscal 2007. Anyone who
is interested may take part in this call by dialing 1-800-732-9307. A
presentation of the 2007 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 its website and archived for
90 days.

    PROFILE as at March 13, 2008
    ----------------------------

    Cominar is the largest commercial property owner and manager in the
Province of Quebec. The REIT owns a real estate portfolio of 208 high-quality
properties, consisting of 36 office, 38 retail and 134 industrial and
mixed-use buildings that cover a total area of over 17.0 million square feet
in the Greater Quebec City, Montreal and Gatineau/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.
    The REIT has a distribution reinvestment plan for its unitholders that
allows participants to reinvest their monthly distributions in additional
Trust units. Participants will be given the right to receive an effective
discount of 5% of distributions to which they are entitled in the form of
additional units. Additional information and enrolment forms are available at
www.cominar.com.

    Forward-Looking Statements and Non-GAAP Financial Measures
    ----------------------------------------------------------

    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 use of forward
looking words such as "may", "will", "expect", "estimate", "anticipate",
"intends", "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.
    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.


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


    COMINAR REAL ESTATE INVESTMENT TRUST
    Consolidated Balance Sheets
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    -------------------------------------------------------------------------

    As at December 31,                                      2007        2006
    (in thousands of dollars)                                  $           $
    -------------------------------------------------------------------------

    ASSETS
    Income properties
    Buildings                                          1,073,830     604,628
    Land                                                 174,657      97,988
    Intangible assets                                     74,608       8,825
                                                       ----------   ---------
                                                       1,323,095     711,441
    Properties under development                          31,401      16,628
    Land held for future development                      29,879       7,604
    Deferred expenses and other assets                    34,920      28,057
    Prepaid expenses                                       3,839       2,654
    Accounts receivable                                   19,660      20,071
    -------------------------------------------------------------------------
                                                       1,442,794     786,455
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES
    Mortgages payable                                    619,755     270,142
    Convertible debentures                               203,852      39,984
    Bank indebtedness                                     35,321      73,616
    Accounts payable and accrued liabilities              35,924      21,606
    Distributions payable to unitholders                   6,246       4,099
    -------------------------------------------------------------------------
                                                         901,098     409,447
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    UNITHOLDERS' EQUITY
    Unitholders' equity                                  541,696     377,008
    -------------------------------------------------------------------------
                                                       1,442,794     786,455
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    COMINAR REAL ESTATE INVESTMENT TRUST
    Consolidated Statements of Unitholders' Equity
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Years ended December 31,                                2007        2006
    (in thousands of dollars)                                  $           $
    -------------------------------------------------------------------------

    Unitholders' contributions
    Balance, beginning of year                           400,698     338,230
    Issue of units                                       196,378      62,468
    Underwriters' fees and offering                       (5,904)          -
    -------------------------------------------------------------------------
    Balance, end of year                                 591,172     400,698
    -------------------------------------------------------------------------

    Cumulative net income
    Balance, beginning of year                           218,538     184,463
    Net income                                            29,241      34,075
    -------------------------------------------------------------------------
    Balance, end of year                                 247,779     218,538
    -------------------------------------------------------------------------

    Cumulative distributions
    Balance, beginning of year                          (242,626)   (199,902)
    Distributions to unitholders                         (55,454)    (42,724)
    -------------------------------------------------------------------------
    Balance, end of year                                (298,080)   (242,626)
    -------------------------------------------------------------------------

    Contributed surplus
    Balance, beginning of year                               398         351
    Unit option plan                                         115          47
    -------------------------------------------------------------------------
    Balance, end of year                                     513         398
    -------------------------------------------------------------------------

    Other equity component
    Convertible debentures equity component                  312           -
    -------------------------------------------------------------------------
    Unitholders' equity                                  541,696     377,008
    -------------------------------------------------------------------------


    COMINAR REAL ESTATE INVESTMENT TRUST
    Consolidated Statements of Income and Comprehensive Income
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Years ended December 31,                                2007        2006
    (in thousands of dollars except per-unit amounts)          $           $
    -------------------------------------------------------------------------

    Operating revenues
    Rental revenue from income properties                182,124     126,750
    -------------------------------------------------------------------------

    Operating expenses
    Operating costs                                       35,126      24,579
    Realty taxes and services                             35,470      24,123
    Property management expenses                           1,757         997
    -------------------------------------------------------------------------
                                                          72,353      49,699
    -------------------------------------------------------------------------

    Operating income before the undernoted               109,771      77,051
    -------------------------------------------------------------------------

    Interest on borrowings                                35,711      20,712
    Depreciation of income properties                     35,514      15,261
    Amortization of deferred leasing costs                 6,965       6,139
    Amortization of other assets                             196         177
    -------------------------------------------------------------------------
                                                          78,386      42,289
    -------------------------------------------------------------------------

    Operating income from real estate assets              31,385      34,762
    -------------------------------------------------------------------------

    Trust administrative expenses                          2,968       2,130

    Other revenues                                           394         489

    Unusual items                                            422        (554)
    -------------------------------------------------------------------------

    Net income from continuing operations                 29,233      32,567

    Net income from discontinued operations                    8       1,508
    -------------------------------------------------------------------------

    Net income and comprehensive income                   29,241      34,075
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic net income per unit                              0,703       0,992
    -------------------------------------------------------------------------
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    Diluted net income per unit                            0,693       0,977
    -------------------------------------------------------------------------
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    COMINAR REAL ESTATE INVESTMENT TRUST
    Consolidated Statements of Cash Flows
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Years ended December 31,                                2007        2006
    (in thousands of dollars)                                  $           $
    -------------------------------------------------------------------------

    OPERATING ACTIVITIES
    Net income                                            29,241      34,075
    Items not affecting cash
      Depreciation of income properties                   36,132      16,276
      Amortization of above- (below-) market leases         (250)        120
      Amortization of deferred leasing costs               6,965       6,139
      Amortization of deferred financing costs and
       other assets                                          930         728
      Amortization of fair value adjustments on
       assumed indebtedness                                  (52)          -
      Accretion of liability component of convertible
       debentures                                              9           -
      Compensation costs related to unit option plan         217         179
      Gain on disposals of income properties                   -        (835)
    -------------------------------------------------------------------------
                                                          73,192      56,682
    -------------------------------------------------------------------------

    Change in non-cash operating working capital items    10,255      (5,269)
    -------------------------------------------------------------------------
                                                          83,447      51,413
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Acquisitions of income properties:
      - from Alexis Nihon REIT property portfolio       (365,330)          -
      - other acquisitions                               (53,052)    (59,260)
    Additions to properties under development
     and land held for future development                (47,863)    (15,122)
    Net proceeds on disposal of income properties         30,000         393
    Leasing costs                                         (9,746)     (7,479)
    Other assets                                            (322)       (225)
    -------------------------------------------------------------------------
                                                        (446,313)    (81,693)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Mortgages payable                                    167,987      59,267
    Repayments of mortgages payable                      (67,389)    (42,584)
    Net proceeds from issue of convertible debentures    182,720           -
    Bank indebtedness                                    (38,394)     47,805
    Net proceeds from issue of units                     169,454       6,668
    Distributions to unitholders                         (51,512)    (40,876)
    -------------------------------------------------------------------------
                                                         362,866      30,280
    -------------------------------------------------------------------------

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




For further information:

For further information: Michel Dallaire, 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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