Huntingdon REIT reports 2006 financial results and achievements



    WINNIPEG, March 26 /CNW/ - Huntingdon Real Estate Investment Trust
("HREIT") (TSX: HNT.UN) is pleased to report the financial results for the
year ended December 31, 2006. The following comments in regard to the
financial position and operating results of HREIT should be read in
conjunction with the 2006 Annual Report and the financial statements for the
year ended December 31, 2006, which may be obtained from the HREIT website at
www.hreit.ca or the SEDAR website at www.sedar.com.

    2006 HIGHLIGHTS

    
    Financial Highlights - 2006
    -------------------------------------------------------------------------
                                     Year Ended December 31
                  -----------------------------------------------------------
                                  Total                 Per Unit - Basic
                  -----------------------------------------------------------
                      2006        2005    % Change   2006     2005   $ Change
                    --------    --------  -------- -------- -------- --------
    Operating
     income       $32,741,820  $10,117,412   224%  $ 0.485  $ 0.283  $ 0.202
    Distributable
     income       $14,685,156  $ 5,779,916   154%  $ 0.217  $ 0.162  $ 0.055
    Cash from
     operating
     activities   $ 9,474,200  $ 6,637,066    43%  $ 0.140  $ 0.185  $(0.045)
    FFO           $15,840,804  $ 5,285,624   200%  $ 0.234  $ 0.148  $ 0.086
    AFFO          $12,318,394  $ 5,252,483   135%  $ 0.182  $ 0.147  $ 0.035
    Income (loss)
     from
     continuing
     operations   $(1,024,458) $   474,044 (316)%  $(0.015) $ 0.013  $(0.028)
    Income (loss) $   (74,682) $   491,478 (115)%  $(0.001) $ 0.014  $(0.015)

    -   Operating income increased by $22.6 Million or 224% in total and by
        $0.202 or 71% on a per unit basis.
    -   "Same property" operating income for the fourth quarter of 2006
        increased by $690,768 or 13%, compared to the fourth quarter of 2005.
    -   Funds from operations (FFO) increased by $10.6 Million or 200% in
        total and by $0.086 or 58% on a per unit basis.

    Acquisition and Development
    -   Invested $135 Million in the acquisition of ten additional
        properties, representing 1.12 million square feet of leasable area.
    -   Sold one light industrial property at a net gain of $885,162.
    -   Year end portfolio consisting of 51 properties with a total leasable
        area of 4.3 million square feet.

    Capital Structure
    -   Financed $141.7 Million of mortgage debt.
    -   Weighted average interest rate on the total mortgage debt of 6.79% at
        December 31, 2006.
    -   Mortgage debt to total capitalization ratio of 59.9% at December 31,
        2006.
    

    In the two years since its inception as a real estate investment trust on
February 23, 2005, HREIT has undergone a dramatic growth period, ending the
2006 fiscal year with a real estate portfolio approaching the $400 Million
level and generating revenues in excess of $57 Million. During 2006, the
property portfolio increased by $141.6 Million or 52.8%, representing the
acquisition of ten new properties and the sale of one of the 2005 property
acquisitions. In total, the gross leasable area of the property portfolio
increased by over one million square feet in 2006, with the office property
component accounting for 67% of the increase.
    On a weighted average basis, the 2006 property acquisitions were owned by
HREIT for a period of approximately 7 1/2 months. The inclusion of the 2006
property acquisitions for a full 12 months will result in a significant
increase in operating income and cash flows in 2007. Based on the
annualization of the operating results for the fourth quarter of 2006, the
incremental operating income associated with the 2006 property acquisitions is
projected to be in excess of $6.5 Million.
    In accordance with its strategy of pursuing opportunities to maximize the
cash flow and long-term value of existing property holdings, HREIT invested
approximately $8.7 Million in capital improvements, property renovations and
remarketing initiatives in 2006. The majority of the investment capital was
directed toward the funding of comprehensive leasehold and property
improvement programs at seven properties, all of which were acquired in 2005.
For two of the properties, 110 Lowson Crescent and Speedvale Centre, the
improvements were substantially complete as of December 31, 2006 and resulted
in an immediate improvement in operating results. The combined operating
income of 110 Lowson Crescent and Speedvale Centre for the fourth quarter of
2006 increased by approximately $195,000 or 78%, compared to the fourth
quarter of 2005. The return on the remaining properties is also expected to
increase by a significant amount, as the property renovations and remarketing
initiatives are completed throughout 2007.
    On a "same property" basis, the net operating income for the 37
properties, which have been in the HREIT portfolio since October 1, 2005,
increased by approximately $690,000 or 13% in the fourth quarter of 2006,
compared to the fourth quarter of 2005. On an annualized basis, the fourth
quarter improvement represents an increase of approximately $2.8 Million. The
"same property" comparison provides a good indication of the extent to which
property improvements, combined with rent increases and improved occupancy
levels, are contributing to significant growth in the income potential of the
property portfolio.
    In summary, a very solid foundation has been established over the past
two years in terms of creating a diversified portfolio of quality commercial
properties. There is expected to be a significant amount of income growth and
value which is projected in 2007 from the operation of the 2006 property
acquisitions for a full year and as a result of the completion of
comprehensive leasehold and property improvement programs at a number of
higher profile properties. Income from new property acquisitions will further
enhance the overall net operating income and cash flows of HREIT.

    
    RESULTS OF OPERATIONS

    Summary of Operating/Cash Flow Results
    -------------------------------------------------------------------------
                                                          Year Ended
                                                          December 31
                                                  ---------------------------
                                                       2006          2005
                                                  ------------- -------------
    Total revenue                                 $ 57,363,580  $ 18,443,543
    Operating income                              $ 32,741,820  $ 10,117,412
    Income (loss) from continuing operations      $ (1,024,458) $    474,044
    Income (loss)                                 $    (74,682) $    491,478
    Cash from operating activities                $  9,474,200  $  6,637,066
    Distributable income                          $ 14,685,156  $  5,779,916
    Funds from operations (FFO)                   $ 15,840,804  $  5,285,624
    Adjusted Funds from Operations (AFFO)         $ 12,318,394  $  5,252,483
    Cash distributions - total                    $ 18,931,533  $ 13,025,222
                       - per unit                 $       0.28  $       0.21

    Per Unit
                                         Basic   Diluted     Basic   Diluted
                                       --------------------------------------
    Operating income                   $ 0.485   $ 0.485   $ 0.283   $ 0.282
    Income (loss) from continuing
     operations                        $(0.015)  $(0.015)  $ 0.013   $ 0.013
    Income (loss)                      $(0.001)  $(0.001)  $ 0.014   $ 0.014
    Cash from operating activities     $ 0.140   $ 0.140   $ 0.185   $ 0.185
    Distributable income               $ 0.217   $ 0.217   $ 0.162   $ 0.161
    Funds from operations (FFO)        $ 0.234   $ 0.234   $ 0.148   $ 0.147
    Adjusted funds from operations
     (AFFO)                            $ 0.182   $ 0.182   $ 0.147   $ 0.146
    

    The operating income and cash flow results for 2006 were generally in
accordance with expectations, with HREIT achieving a $22,624,408, or 224%,
increase in operating income and a $2,837,134, or 43%, increase in cash from
operating activities. After deducting amortization expense, however, HREIT
incurred a net loss of $74,682. The variance between the actual net loss and
the expected increase in net income in 2006 is due to a number of factors,
including trust expenses and amortization charges, which were higher than
anticipated and the exclusion of rent payments which were funded from cash in
escrow. The operating results for 2006 exclude $1,340,276 of rent payments,
which were funded from cash in escrow, compared to $69,267 in 2005. Funds
released from escrow to fund rent payments or supplement income are not
included in revenue under generally accepted accounting principals.

    
    COMPARISON TO PRECEDING QUARTER

    Analysis of Net Income - 2006 Fourth Quarter vs. 2006 Third Quarter
    -------------------------------------------------------------------------
                                        Three Months Ended
                                    ---------------------------
                                     December 31, September 30,     Increase
                                         2006          2006        (Decrease)
                                    -----------------------------------------
    Operating income                $  9,805,475  $  9,351,792  $    453,683
    Financing expense                  4,833,053     4,693,119       139,934
                                    ------------- ------------- -------------
    Operating income, net of
     financing expense                 4,972,422     4,658,673       313,749
    Trust expense                        509,626       757,616      (247,990)
                                    ------------- ------------- -------------
    Income from continuing operations,
     before amortization               4,462,796     3,901,057       561,739
    Amortization                       4,578,242     4,961,063      (382,821)
                                    ------------- ------------- -------------
    Income (loss) from continuing
     operations                         (115,446)   (1,060,006)      944,560
    Income from discontinued
     operations                                -       882,827      (882,827)
                                    ------------- ------------- -------------
    Net income (loss)               $   (115,446) $   (177,179) $     61,733
                                    ------------- ------------- -------------
                                    ------------- ------------- -------------
    

    During the fourth quarter of 2006, HREIT incurred a loss from continuing
operations of $115,446, compared to a loss from continuing operations of
$1,060,066 in the third quarter of 2006. After providing for income from
discontinued operations, HREIT completed the fourth quarter of 2006 with a
loss of $115,446, compared to a loss of $177,179 during the third quarter of
2006. During the third quarter of 2006, HREIT generated income from
discontinued operations of $882,827, primarily due to the gain on the sale of
the light industrial property on August 1, 2006.

    HREIT is a real estate investment trust, which is listed on the Toronto
Stock Exchange under the symbol HNT.UN. The objective of HREIT is to provide
Unitholders with stable cash distributions from investment in a geographically
diversified Canadian portfolio of quality commercial and industrial real
estate properties. There are currently 71,872,235 trust units outstanding. For
further information on HREIT, please visit our website at www.hreit.ca.

    This press release contains certain statements that could be considered
as forward-looking information. The forward-looking information is subject to
certain risks and uncertainties, which could result in actual results
differing materially from the forward-looking statements.

    The Toronto Stock Exchange has not reviewed or approved the contents of
    this press release and does not accept responsibility for the adequacy or
    accuracy of this press release.





For further information:

For further information: Arni Thorsteinson, President & Chief Executive
Officer, or Gino Romagnoli, Investor Relations, Tel: (204) 475-9090, Fax:
(204) 452-5505, Email: info@hreit.ca

Organization Profile

HUNTINGDON REAL ESTATE INVESTMENT TRUST

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