Cominar REIT - Sustained Growth in the First Quarter of 2009



    
    - Increases of 18.4% in operating revenues and 16.6% in net operating
      income
    - Distributable income of $17.4 million, up 10.5%
    - Funds from operations of $20.9 million, up 11.4%
    - Strategic acquisition in Montréal: $37 million investment

    Events subsequent to March 31, 2009:

    - Unit offering: $57.5 million
    - Designation of Complexe Jules-Dallaire (Laurier Boulevard project,
      Québec City) and investment by the Dallaire family in this important
      real estate complex
    

    TSX - CUF.UN

    QUEBEC CITY, May 13 /CNW Telbec/ - Cominar Real Estate Investment Trust
("Cominar" or the "REIT") announces solid growth in the first quarter ended
March 31, 2009.

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

    -------------------------------------------------------------------------
    For the quarters ended March 31
    (in thousands of dollars except per         2009        2008           %
     unit amounts)                                                    Change
    -------------------------------------------------------------------------
    Operating revenues(1)(2)                  67,867      57,333        18.4
    Net operating income(1)(2)(3)             36,684      31,450        16.6
    Net income(1)                              4,042       4,125        (2,0)
    Recurring distributable income(1)(3)      17,445      15,794        10.5
    Recurring funds from operations(1)(3)     20,859      18,726        11.4
    Recurring adjusted funds from
     operations(1)(3)                         17,046      15,682         8.7
    Distributions                             16,523      15,369         7.5

    Per unit
    Net income                                  0.09        0.09           -
    Recurring distributable income (FD)(3)(4)   0.38        0.35         8.6
    Recurring funds from operations (FD)(3)(4)  0.44        0.40        10.0
    Recurring adjusted funds from
     operations (FD)(3)(4)                      0.37        0.35         5.7
    Distributions (basic)                      0.360       0.339         6.2
    -------------------------------------------------------------------------
    (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.
    -------------------------------------------------------------------------

    "The first three months of 2009 were our 43rd consecutive quarter of
growth, despite the economic context prevailing since 2008. Our occupancy rate
remained stable and high at 94.5% for the first quarter, holding steady with
the corresponding quarter of 2008 and comparable to the near-stationary
average occupancy rate of the last five years. We see that there is still
solid demand for rental space in our portfolio. Furthermore, despite tighter
lending conditions, we renewed, in advance and at low interest rates, our $255
million operating and acquisition credit facility. We also contracted or
assumed mortgages payable totalling $88.0 million. On April 21, 2009, we
completed a $57.5 million unit offering, the net proceeds of which were used
to pay down the outstanding debt used to finance our ongoing acquisition and
development pipeline. Our financial position remains healthy and solid,
enabling us to pursue our business strategy," indicated Michel Dallaire,
President and Chief Executive Officer of Cominar.

    Operating revenues totalled $67.9 million for the first quarter ended
March 31, 2009, up 18.4%. 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 $36.7 million, up 16.6% over the first
quarter of 2008. The operating profit margin stood at 54.1%, slightly below
the average of previous periods, whereas the same property profit margin held
virtually steady with 2008, at 53.6%.

    Net income amounted to $4.0 million or $0.09 per unit, which is comparable
to the corresponding quarter of 2008.

    Distributable income totalled $17.4 million, up 10.5% over the first
quarter of 2008. Recurring distributable income per fully diluted unit
amounted to $0.38, up from $0.35 for the corresponding quarter of 2008, an
increase of 8.6%.

    Recurring funds from operations totalled $20.9 million, an increase of
11.4% reflecting the contribution of the acquisitions and developments
completed in 2008 and the beginning of 2009 and the 2.3% growth in same
property net operating income. Recurring adjusted funds from operations per
fully diluted unit grew by 5.7% to $0.37, up from $0.35 for the first quarter
of 2008.

    Cominar paid distributions totalling $16.5 million to unitholders in the
first quarter de 2009, compared with $15.4 million in the corresponding
quarter of 2008, an increase of 7.5%. Distributions per unit amounted to
$0.360, compared with $0.339 in the first quarter of 2008.

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

    On February 19, 2009, Cominar announced the renewal of its $255 million
operating and acquisition credit facility, which will now mature on June 19,
2010. During the first quarter of 2009, Cominar also contracted or assumed
mortgages payable totalling $88.0 million and bearing interest at a weighted
average contractual rate of 4.65%. In addition, it repaid outstanding
mortgages payable of $47.1 million bearing interest at a weighted average
contractual rate of 5.53% using its credit facilities and new mortgages
payable.

    The overall debt ratio stood at 62.8%, 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 interest coverage ratio remained conservative
at 2.42:1 - on an annualized basis this ratio is rather at 2.6:1 - and the
weighted average contractual interest rate of its long-term debt was 5.55%,
down eight basis points from December 31, 2008.

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

    As at March 31, 2009, the occupancy rate stood at 94.5%, holding steady
with the first quarter of 2008 and comparable to the average occupancy rate of
the last five years. In the first quarter, the leasing team renewed 35.0% of
expiring leases in 2009; note that 13.4% of Cominar's leases will expire this
year. In addition, Cominar signed new leases representing 0.2 million square
feet of leasable space.

    Acquisition Completed in the First Quarter of 2009
    --------------------------------------------------

    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
    --------------------

    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. These developments are progressing on schedule.

    Events Subsequent to March 31, 2009
    -----------------------------------

    Complexe Jules-Dallaire - In recent weeks, Cominar announced that its
large-scale real estate project on Laurier Boulevard, in Québec City, had been
officially named "Complexe Jules-Dallaire", in honour and memory of Cominar's
founder, the late Jules Dallaire. The REIT also announced that the Dallaire
family had entered into an agreement pursuant to which it acquired, effective
May 4, 2009, a 5% interest in this large-scale complex for a purchase price of
approximately $2.0 million, reflecting the share of the investments made to
date in the complex. In addition, the Dallaire family will assume its share of
the project's future expenses. Complexe Jules-Dallaire will be managed by Les
services administratifs Cominar inc., a wholly-owned subsidiary of Cominar.
Day-to-day management, budgetary matters and leasing will remain under the
control of Cominar.

    $57.5 million unit offering - On April 21, 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 pay down debt outstanding under current credit
facilities, which debt was used to finance Cominar's ongoing acquisition and
development pipeline. Cominar thus lowered its overall debt ratio to 59.9% as
at May 12, 2009.

    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 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.

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

    Cominar's interim consolidated financial statements and the management's
discussion and analysis for the first quarter ended March 31, 2009 will be
filed with SEDAR at www.sedar.com and are available on Cominar's website at
www.cominar.com.

    May 13, 2009 Conference Call
    ----------------------------

    On Wednesday, May 13, 2009, at 11:00 a.m. (EDT) Cominar's management will
hold a conference call to discuss the results for the first quarter of 2009.
Anyone who is interested may take part in this call by dialing 1 (800)
595-8550. 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 its
website and archived for 90 days.

    PROFILE as at May 13, 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, 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 March 31             2009                    2008
                                  DI     FFO    AFFO      DI     FFO    AFFO
    -------------------------------------------------------------------------
    Net income (GAAP)          4,042   4,042   4,042   4,125   4,125   4,125
    + Amortization of income
     properties               14,219  14,219  14,219  12,470  12,470  12,470
    + Amortization of
     capitalized leasing
     costs                         -   2,598   2,598       -   2,131   2,131
    - Amortization of
     below-market leases        (204)      -    (204)   (127)      -    (127)
    + Compensation expense
     related to unit option
     plan                        173       -     173     130       -     130
    + Accretion of liability
     component of convertible
     debentures                   10       -       -       9       -       -
    - Rental income -
     straight-line accounting
     for leases                 (764)      -    (764)   (782)      -    (782)
    - Amortization of fair
     value adjustments on
     assumed indebtedness        (31)      -       -     (31)      -       -
    - Amortization of
     capitalized leasing
     costs                         -       -  (2,598)      -       -  (2,131)
    - Capital expenditures -
     maintenance of ability
     to generate rental
     income                        -       -    (420)      -       -    (134)
    -------------------------------------------------------------------------
                              17,445  20,859  17,046  15,794  18,726  15,682
    -------------------------------------------------------------------------

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


    CONSOLIDATED BALANCE SHEETS
    (unaudited, in thousands of dollars)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                         As at         As at
                                                      March 31,  December 31,
                                                          2009          2008
                                                             $             $
    -------------------------------------------------------------------------

    ASSETS
    Income properties
      Buildings                                      1,241,937     1,228,770
      Land                                             202,211       199,211
      Intangible assets                                 77,893        79,106
                                                    -----------   -----------
                                                     1,522,041     1,507,087
    Properties under development                        98,521        72,945
    Land held for future development                    37,176        20,857
    Capitalized leasing costs and other assets          45,061        44,141
    Prepaid expenses                                     8,892         1,954
    Accounts receivable                                 26,444        21,352
    -------------------------------------------------------------------------
                                                     1,738,135     1,668,336
    -------------------------------------------------------------------------

    LIABILITIES
    Mortgages payable                                  767,135       730,711
    Convertible debentures                             204,084       203,723
    Bank indebtedness                                  218,401       186,987
    Accounts payable and accrued liabilities            43,134        34,987
    Distributions payable to unitholders                 5,505             -
    -------------------------------------------------------------------------
                                                     1,238,259     1,156,408
    -------------------------------------------------------------------------
    UNITHOLDERS' EQUITY
    Unitholders' equity                                499,876       511,928
    -------------------------------------------------------------------------
                                                     1,738,135     1,668,336
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS OF
    UNITHOLDERS' EQUITY
    For the quarters ended March 31
    (unaudited, in thousands of dollars)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                          2009          2008
                                                             $             $
    -------------------------------------------------------------------------

    Unitholders' contributions
    Balance, beginning of period                       600,965       591,172
    Issue of units                                         256         1,132
    -------------------------------------------------------------------------
    Balance, end of period                             601,221       592,304
    -------------------------------------------------------------------------

    Cumulative net income
    Balance, beginning of period                       272,399       247,779
    Change due to new accounting policy                      -          (365)
    Net income                                           4,042         4,125
    -------------------------------------------------------------------------
    Balance, end of period                             276,441       251,539
    -------------------------------------------------------------------------

    Cumulative distributions
    Balance, beginning of period                      (362,817)     (298,080)
    Distributions to unitholders                       (16,523)      (15,369)
    -------------------------------------------------------------------------
    Balance, end of period                            (379,340)     (313,449)
    -------------------------------------------------------------------------

    Contributed surplus
    Balance, beginning of period                         1,069           513
    Unit option plan                                       173           124
    -------------------------------------------------------------------------
    Balance, end of period                               1,242           637
    -------------------------------------------------------------------------

    Other equity component
    Equity component of convertible debentures             312           312
    -------------------------------------------------------------------------
    Total unitholders' equity                          499,876       531,343
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS OF INCOME
    AND COMPREHENSIVE INCOME
    For the quarters ended March 31
    (unaudited, in thousands of dollars except per unit amounts)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                          2009          2008
                                                             $             $
    -------------------------------------------------------------------------

    Operating revenues
    Rental revenue from income properties               67,867        57,333
    -------------------------------------------------------------------------

    Operating expenses
    Operating costs                                     14,887        11,959
    Realty taxes and services                           15,431        13,332
    Property management expenses                           865           592
    -------------------------------------------------------------------------
                                                        31,183        25,883
    -------------------------------------------------------------------------

    Operating income before the undernoted              36,684        31,450
    -------------------------------------------------------------------------

    Interest on borrowings                              14,696        11,850
    Depreciation of income properties                   14,219        12,459
    Amortization of capitalized leasing costs            2,598         2,124
    Amortization of other assets                            91            62
    -------------------------------------------------------------------------
                                                        31,604        26,495
    -------------------------------------------------------------------------

    Operating income from real estate assets             5,080         4,955
    -------------------------------------------------------------------------

    Trust administrative expenses                       (1,093)         (879)

    Other revenues                                          55            51
    -------------------------------------------------------------------------

    Net income from continuing operations                4,042         4,127

    Net loss from discontinued operations                    -            (2)
    -------------------------------------------------------------------------

    Net income and comprehensive income                  4,042         4,125
    -------------------------------------------------------------------------

    Basic net income per unit                            0.088         0.091
    -------------------------------------------------------------------------

    Diluted net income per unit                          0.088         0.090
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS
    OF CASH FLOWS
    For the quarters ended March 31
    (unaudited, in thousands of dollars)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                          2009          2008
                                                             $             $
    -------------------------------------------------------------------------

    OPERATING ACTIVITIES
    Net income                                           4,042         4,125
    Items not affecting cash:
    Depreciation of income properties                   14,219        12,470
    Amortization of below-market leases                   (204)         (127)
    Amortization of capitalized leasing costs            2,598         2,131
    Amortization of capitalized financing costs
     and other assets                                      711           435
    Amortization of fair value adjustments on
     assumed indebtedness                                  (31)          (31)
    Accretion of liability component of convertible
     debentures                                             10             9
    Compensation expense related to unit option plan       173           130
    -------------------------------------------------------------------------
                                                        21,518        19,142
    -------------------------------------------------------------------------

    Change in non-cash working capital items            (4,802)      (14,590)
    -------------------------------------------------------------------------
                                                        16,716         4,552
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Additions to income properties                     (26,773)      (23,241)
    Additions to properties under development and
     land held for future development                  (28,930)       (5,907)
    Capitalized leasing costs                           (4,236)       (4,574)
    Other assets                                           (94)         (540)
    -------------------------------------------------------------------------
                                                       (60,033)      (34,262)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Mortgages payable                                   74,318        29,864
    Repayment of mortgages payable                     (51,546)      (55,228)
    Bank indebtedness                                   31,307        70,505
    Net proceeds from issue of units                       (12)          572
    Distributions to unitholders                       (10,750)      (16,003)
    -------------------------------------------------------------------------
                                                        43,317        29,710
    -------------------------------------------------------------------------

    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

Organization Profile

Cominar Real Estate Investment Trust

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890