Cominar announces solid growth in fiscal 2006



    
    - 20.7% annual return per unit, including reinvestment of distributions
      and increase in unit price
    - Increases of 8.3% in operating revenues and 9.0% in net operating
      income
    - Recurring distributable income and funds from operations per unit up
      3.8% and 5.4%, respectively
    - Closed acquisitions and completed developments representing a million
      square feet of space for a $67 million total investment
    - Ongoing and upcoming developments represent a $39 million total
      investment
    - Subsequent events: agreement with Homburg to acquire 6.5 million square
      feet of Alexis Nihon portfolio for $592 million and four acquisitions
    - New addition to Board of Trustees: Gérard Coulombe, Q.C., Chairman of
      the Board of Desjardins Ducharme L.L.P.
    -------------------------------------------------------------------------
    
    TSX - CUF.UN

    QUEBEC CITY, March 14 /CNW Telbec/ - Cominar Real Estate Investment Trust
("Cominar" or the "REIT") announced today solid financial results for the
fourth quarter and for the fiscal year ended December 31, 2006.

    
    Financial Highlights 2006 Results
    ---------------------------------

    -------------------------------------------------------------------------
    For the year ended December 31
    (Dollar amounts in thousands,
     except per unit amounts)                     2006       2005  % Change
    -------------------------------------------------------------------------
    Operating revenues                        $131,686   $121,561       8.3%
    Net operating income                        80,271     73,644       9.0
    Recurring net income(1)                     33,794     31,079       8.7
    RDI(2)                                      48,615     44,749       8.6
    Recurring FFO(2)                            56,209     51,363       9.4
    Recurring AFFO(2)                           46,246     41,115      12.5
    Cash distributions                          42,724     39,549       8.0
    Per unit (fully diluted)
    RDI(2)                                    $   1.36   $   1.31       3.8%
    Recurring FFO(2)                              1.56       1.48       5.4
    Recurring AFFO(2)                             1.30       1.22       6.6
    Cash distributions(basic)                     1.23       1.21       1.7
    -------------------------------------------------------------------------
    (1) Excluding gains on sale of real estate assets of $835 and $248
        realized in 2006 and 2005, respectively, and $554 in non-recurring
        expenses incurred in the first quarter of 2006 in connection with our
        offer for Alexis Nihon Real Estate Investment Trust.
    (2) Excluding $554 in non-recurring expenses incurred in the first
        quarter of 2006 in connection with our offer for Alexis Nihon Real
        Estate Investment Trust.
    -------------------------------------------------------------------------

    For the fiscal year ended December 31, 2006, Cominar's operating revenues
amounted to $131.7 million, an 8.3% increase over fiscal 2005. The increase
was mainly the effect of new revenue generated through the acquisition and
integration of new properties throughout the year and the strong performance
of our existing property portfolio. Net operating income stood at
$80.3 million, up 9.0% from the previous year.
    For comparison purposes, the calculations of distributable income, funds
from operations and adjusted funds from operations were adjusted to exclude
$554,000 in non-recurring expenses incurred in the first quarter of the year
in connection with our offer for Alexis Nihon Real Estate Investment Trust.
    Taking this adjustment into consideration, recurring distributable income
("RDI") for fiscal 2006 was $48.6 million compared to $44.7 million in 2005,
an increase of 8.6%. Per fully diluted unit, RDI was $1.36 compared to $1.31
for 2005, up 3.8%.
    Recurring funds from operations ("Recurring FFO") increased in 2006 by
9.4% to $56.2 million. Per fully diluted unit, they stood at $1.56 compared to
$1.48 in 2005, a 5.4% increase.
    Recurring adjusted funds from operations were at $46.2 million compared to
$41.1 million in fiscal 2005. On a fully diluted per unit basis, they were up
6.6%.
    The calculation of net income was also adjusted to exclude the
non-recurring expenses mentioned above and gains of $835,000 and $248,000 from
the sale of real estate assets in 2006 and 2005, respectively. For 2006,
recurring net income stood at $33.8 million, compared to $31.1 million in
2005, up 8.7%.
    In 2006, Cominar paid total distributions of $42.7 million to unitholders,
up 8.0% over total distributions in 2005. Distribution per unit stood at $1.23
compared to $1.21 for the previous fiscal year.
    "Over the past five years, including the reinvestment of distributions and
the increase in unit price, Cominar's average annual return per unit was
19.2%, which is a solid performance. In 2006, we continued to increase the
value of the real estate portfolio by closing acquisitions and completing
developments representing approximately one million square feet for a
$67 million investment at a 9.5% weighted average capitalization rate" said
Cominar's President and Chief Executive Officer Michel Dallaire. "In addition,
we have ongoing and upcoming development projects totalling $39 million", he
added.
    As at December 31, 2006, Cominar's debt to gross book value ratio stood at
45.6%, providing it with $177.5 million to fund future acquisitions and
developments at its preferred debt ratio of 55%.

    Fourth Quarter Results
    ----------------------
    For the quarter ended December 31, 2006, operating revenues were
$33.4 million versus 31.1 million for the comparable period in 2005, a 7.6%
increase. Net operating income increased to $21.1 million from $19.7 million
in the fourth quarter of 2005, up 7.2%. RDI was $13.4 million, compared to
$12.3 million for the previous corresponding period. On a per unit basis, RDI
was up one cent from $0.35 in 2005 to $0.36 in 2006.
    Recurring FFO for the fourth quarter increased 8.8% from 2005. On a per
unit basis, they were also up one cent.

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

    Portfolio occupancy stood at 94.4% at the end of 2006, slightly down from
95.3% in 2005, as a result of the bankruptcy, in the third quarter, of a
tenant which was the sole occupant of a 275,000 square foot industrial and
mixed-use property in Laval, offset by gains in the office and retail sectors.
Leasing activities remained strong during the year with 85.6% of leases
expiring in 2006 renewed, an all time high. In addition, Cominar was able to
sign new leases representing 0.6 million square feet of space. Rental rates
upon renewal were up in all three sectors of activity.

    Acquisition and Development Program
    -----------------------------------

    Cominar closed acquisitions and completed developments representing
approximately one million square feet of leasable space during fiscal 2006,
for a $67 million investment, at a 9.5% weighted average capitalization rate.
As of today, the REIT had over $39 million of ongoing and upcoming development
projects representing 0.6 million square feet of space, which should be
integrated into the portfolio in 2007.

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

    On February 20, 2007, Cominar announced that it had entered into a binding
asset purchase agreement with Homburg Invest Inc. ("Homburg") pursuant to
which Cominar agreed to purchase 6.5 million square feet of office and
industrial properties of Alexis Nihon Real Estate Investment Trust
("Alexis Nihon") for a sum of $592 million. The transaction is conditional
upon the success of Homburg's offer for Alexis Nihon.
    Up to now in 2007, the REIT has acquired four properties representing
112,146 square feet of space for a total investment of $8.2 million at a
weighted average capitalization rate of 9.1%, and land for future developments
totalling $9.6 million.

    Changes to Board of Trustees
    ----------------------------

    Cominar is also pleased to announce the appointment of Gérard Coulombe,
Q.C. as Trustee. In order to allow Mr. Coulombe to join the Board of Trustees
and to increase the number of non-management trustees, Michel Berthelot has
resigned as Trustee but remains Executive Vice President and Chief Financial
Officer of the REIT.
    "Gérard Coulombe brings a wealth of experience to us" said Michel
Dallaire. "I am delighted that he has agreed to take on this role within
Cominar."
    Mr. Coulombe holds a law degree from Ottawa University and has done
post-graduate studies at Oxford University, where he was a Rhodes Scholar. He
is Chairman of the Board of Desjardins Ducharme L.L.P., a leading Quebec law
firm, where he practises business law. He is listed by LEXPERT as a leading
practitioner in banking, corporate finance and securities, and mergers and
acquisitions. He sits on the board of directors of several corporations,
including the National Bank of Canada, the National Bank Life Insurance
Company and National Bank Trust. Mr. Coulombe will sit on Cominar's Governance
and Nominating Committee as well as on the Compensation Committee.

    Outlook
    -------

    "We have every reason to be confident about Cominar's future. Fiscal 2007
is off to a good start with our most significant transaction to date just
announced. Our proposed $592 million acquisition of the office and industrial
portfolio of Alexis Nihon, which represents approximately 72% of its leasable
space, will bring our asset base to over $1.4 billion and is expected to be
immediately accretive to our distributable income and funds from operations,"
Michel Dallaire concluded.

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

    Cominar's consolidated financial statements and the management's
discussion and analysis for the fiscal year ended December 31, 2006 will be on
file with SEDAR at www.sedar.com and are available on Cominar's website at
www.cominar.com.

    Conference Call and Webcast
    -----------------------------

    On Wednesday, March 14, 2007, at 11:30 a.m. EST, Cominar's management will
hold a conference call to discuss the fiscal 2006 results. Anyone who is
interested may take part in this call by dialing 1-800-732-9307. A
presentation of the 2006 results will be available at www.cominar.com under
the title "Conference Call." The event will also be webcast on www.q1234.com.

    PROFILE as at March 14, 2007
    ----------------------------

    Cominar is one of the largest commercial real estate property owners and
managers in the province of Quebec. It owns a high quality portfolio of
143 properties in the Greater Montreal and Quebec City areas, consisting of
15 office, 31 retail, and 97 industrial and mixed-use buildings, totalling
over 10.3 million square feet. The REIT's objectives are to deliver to its
unitholders growing cash distributions and to maximize unitholder value
through proactive management and the growth of its portfolio.
    Cominar has a distribution reinvestment plan for its unitholders that
allows participants to reinvest their monthly cash 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 enrollment 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 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 and Cominar has no obligation to update such
statements.
    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 complete consolidated financial statements, including the related
notes, are available on Cominar's website www.cominar.com under "Quarterly
Reports" and on SEDAR at www.sedar.com.


    COMINAR REAL ESTATE INVESTMENT TRUST
    Consolidated Balance Sheets
    -------------------------------------------------------------------------
    As at December 31,                                 2006            2005
    (in thousands of dollars)                             $               $
    -------------------------------------------------------------------------

    ASSETS
    Income properties                               711,441         658,855
    Properties under development                     16,628          22,777
    Land held for future development                  7,604           1,243
    Deferred expenses and other assets               31,819          30,009
    Prepaid expenses                                  2,654           2,355
    Accounts receivable                              20,071          12,343
    -------------------------------------------------------------------------
                                                    790,217         725,582
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND UNITHOLDERS' EQUITY
    Liabilities
    Mortgages payable                               270,649         253,581
    Convertible debentures                           43,239          97,535
    Bank indebtedness                                73,616          25,811
    Accounts payable and accrued liabilities         21,606          21,890
    Distributions payable to unitholders              4,099           3,623
    -------------------------------------------------------------------------
                                                    413,209         402,440
    -------------------------------------------------------------------------

    Unitholders' equity
    Unitholders' contributions                      400,698         338,230
    Cumulative net income                           218,538         184,463
    Cumulative distributions                       (242,626)       (199,902)
    Contributed surplus                                 398             351
    -------------------------------------------------------------------------
                                                    377,008         323,142
    -------------------------------------------------------------------------
                                                    790,217         725,582
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    COMINAR REAL ESTATE INVESTMENT TRUST
    Consolidated Statements of Unitholders' Equity
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Period ended December 31,                          2006            2005
    (in thousands of dollars)                             $               $
    -------------------------------------------------------------------------

    Unitholders' contributions
    Balance, beginning of year                      338,230         328,433
    Issue of units                                   62,468           9,797
    -------------------------------------------------------------------------
    Balance, end of year                            400,698         338,230
    -------------------------------------------------------------------------

    Cumulative net income
    Balance, beginning of year                      184,463         153,136
    Net income                                       34,075          31,327
    -------------------------------------------------------------------------
    Balance, end of year                            218,538         184,463
    -------------------------------------------------------------------------

    Cumulative distributions
    Balance, beginning of year                     (199,902)       (160,353)
    Distributions to unitholders                    (42,724)        (39,549)
    -------------------------------------------------------------------------
    Balance, end of year                           (242,626)       (199,902)

    Contributed surplus
    Balance, beginning of year                          351             252
    Unit option plan                                     47              99
    -------------------------------------------------------------------------
    Balance, end of year                                398             351
    -------------------------------------------------------------------------
    Unitholders' equity                             377,008         323,142
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    COMINAR REAL ESTATE INVESTMENT TRUST
    Consolidated Statements of Income
    -------------------------------------------------------------------------
    Period ended December 31,                          2006            2005
    (in thousands of dollars except per unit amounts)     $               $
    -------------------------------------------------------------------------

    Operating revenues
    Rental revenue from income properties           131,686         121,561
    -------------------------------------------------------------------------

    Operating expenses
    Operating costs                                  25,491          24,609
    Realty taxes and services                        24,919          22,065
    Property management expenses                      1,005           1,243
    -------------------------------------------------------------------------
                                                     51,415          47,917
    -------------------------------------------------------------------------
    Operating income before the under noted          80,271          73,644
    -------------------------------------------------------------------------

    Interest on borrowings                           22,021          20,533
    Depreciation of income properties                16,188          14,678
    Amortization of deferred leasing costs            6,139           5,491
    Amortization of deferred financing costs
     and other assets                                   728             703
    -------------------------------------------------------------------------
                                                     45,076          41,405
    -------------------------------------------------------------------------
    Operating income from real estate assets         35,195          32,239
    Trust administrative expenses                     2,130           1,757
    Other revenues                                      488             238
    Unusual item                                        554               -
    -------------------------------------------------------------------------
    Net income from continuing operations            32,999          30,720
    Net income from discontinued operations           1,076             607
    -------------------------------------------------------------------------
    Net income                                       34,075          31,327
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic net income per unit                         0.992           0.961
    -------------------------------------------------------------------------
    Diluted net income per unit                       0.977           0.946
    -------------------------------------------------------------------------


    COMINAR REAL ESTATE INVESTMENT TRUST
    Consolidated Statements of Cash Flows
    -------------------------------------------------------------------------
    Period ended December 31,                          2006            2005
    (in thousands of dollars)                             $               $
    -------------------------------------------------------------------------

    OPERATING ACTIVITIES
    Net income                                       34,075          31,327
    Items not affecting cash
      Depreciation of income properties              16,276          14,793
      Amortization of above-market leases               120             120
      Amortization of deferred leasing costs          6,139           5,491
      Amortization of deferred financing costs
       and other assets                                 728             703
      Compensation costs related to unit option plan    179             200
      Gain on sale of real estate assets               (835)           (248)
    -------------------------------------------------------------------------
                                                     56,682          52,386
    Change in non-cash operating working
     capital items                                   (5,269)          2,634
    -------------------------------------------------------------------------
                                                     51,413          55,020
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Mortgages payable                                59,652               -
    Repayments of mortgages payable                 (42,584)         (9,693)
    Bank indebtedness                                47,805          25,811
    Financing costs                                    (385)              -
    Distributions to unitholders                    (40,876)        (38,347)
    Net proceeds from issue of units (note 10)        6,668           6,101
    -------------------------------------------------------------------------
                                                     30,280         (16,128)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Acquisitions of income properties               (59,260)        (24,281)
    Acquisitions of properties under development
     and land held for future development           (15,122)        (14,305)
    Net proceeds on disposal of real estate assets      393             675
    Leasing costs                                    (7,479)         (8,934)
    Other assets                                       (225)           (221)
    -------------------------------------------------------------------------
                                                    (81,693)        (47,066)
    -------------------------------------------------------------------------
    Net change in cash and cash equivalents               -          (8,174)
    Cash and cash equivalents, beginning of year          -           8,174
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of year                -               -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
    %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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