Huntingdon REIT reports 2009 second quarter results



    WINNIPEG, Aug. 11 /CNW/ - Huntingdon Real Estate Investment Trust
("HREIT") (TSX: HNT.UN) today reported its operating results for the quarter
ended June 30, 2009. The following comments in regard to the financial
position and operating results of HREIT should be read in conjunction with the
June 30, 2009 Management Discussion and Analysis and the financial statements
for the quarter ended June 30, 2009, which may be obtained from the HREIT
website at www.hreit.ca or the SEDAR website at www.sedar.com.
    HREIT's primary objective during 2009 is to complete a selective
divestiture program in order to create funds for the pay down of higher cost
debt, the retirement of the Series A and B convertible debentures, which
mature in 2010, and the funding of committed leasehold and property
improvements. HREIT is also striving to attain improved NOI results from its
overall real estate portfolio.
    During the second quarter of 2009, HREIT achieved its primary objective
for the year, as a result of completing the sale of three properties for gross
proceeds of $90.6 million, encompassing approximately 520,000 square feet of
leaseable space and representing approximately 10% of the total leaseable
space of HREIT's property portfolio. In total, the three property sales
generated net cash proceeds of $5.8 Million, after the repayment of $61.4
million of mortgage loan debt, and $22.1 million of interim mortgage loan
financing. As a result of the debt repayment, the weighted average interest
rate of mortgage loans payable decreased from 6.28% as of December 31, 2008 to
5.82% as of June 30, 2009 and the mortgage loan to gross book value ratio
decreased from 60% to 53%.
    Since June 30, 2009, HREIT generated net cash proceeds of approximately
$600,000 from the sale of a fourth property and the interim mortgage loans
were paid in full. In addition, another two properties are under an
unconditional sale contract with an expected closing date of September 1, 2009
and will generate projected net cash receipts of approximately $3.9 million.
The net cash proceeds will assist in the retirement of the Series "A"
convertible debentures in March 2010.
    During the second quarter of 2009, NOI increased by 9%, compared to the
first quarter of 2009, while cash from operating activities, before non-cash
operating items, decreased by 12%. The decrease in cash from operating
activities is mainly due to increased lease acquisition costs. During the
first six months of 2009, HREIT expended $2.5 million on lease acquisition
costs and property renovations and upgrades, representing 50% of the total
amount which is expected to be incurred for 2009. Expenditures for the second
quarter of 2009 amounted to $1.9 million.

    
    FINANCIAL AND OPERATING SUMMARY

                                Three Months Ended          Six Months Ended
                          ------------------------- -------------------------
                              June 30,     June 30,     June 30,     June 30,
                             ---------    ---------    ---------    ---------
                                 2009         2008         2009         2008
                                ------       ------       ------       ------

    KEY PERFORMANCE INDICATORS

    Operating results
      Total revenue        16,243,978   15,663,903   32,124,494   32,309,798
      Net operating
       income               8,797,515    8,758,655   16,856,913   18,182,477
      Income (loss) from
       continuing
       operations before
       income tax
       recovery            (2,345,888)  (3,647,275)  (5,715,344)  (5,344,790)
      Income (loss) from
       continuing
       operations          (2,550,532)  (2,010,550)  (5,300,382)  (2,977,501)
      Income (loss) for
       the period            (257,660)  (2,775,365)  (3,066,963)  (4,740,710)

    Cash flows
      Cash inflow
       (outflow) from
       operating
       activities           1,702,009    1,297,731    2,480,134    3,067,711
      Funds from
       Operations (FFO)     1,927,935    2,120,311    2,834,347    4,936,322
      Adjusted Funds
       from Operations
       (AFFO)                 924,514    1,727,374    2,152,192    3,120,759
      Distributable
       income               2,423,219    2,694,797    4,169,517    5,739,025

    Operations
      Quarter end
       occupancy rate                                        92%          94%
      Increase (decrease)
       in same property
       operating income      (245,949)  (1,059,490)

    Capital reinvestment
      Additions to
       building and
       equipment              347,599      698,823      401,504    1,225,596
      Additions to
       properties under
       development                  -    3,332,893            -    5,911,765
      Lease acquisition
       costs                1,572,327      871,153    2,130,144    2,361,744

    DISTRIBUTIONS
     Amount - total                 -    5,067,476            -   10,128,516
            - per unit              -         0.07            -         0.14

    Financing
      Mortgage loan debt
       to gross book value
       ratio                                                 53%          59%
      Weighted average
       interest rate of
       long-term debt                                      5.82%        6.41%


    PER UNIT AMOUNTS

                                        Three Months Ended June 30
                               ----------------------------------------------
                                      2009                      2008
                               -----------------          ----------------
                                Basic      Diluted        Basic      Diluted
                               -------     -------       -------     -------
    Operating income            0.120        0.120        0.121        0.122
    Income (loss) from
     continuing operations
     before income tax
     recovery expense          (0.032)      (0.032)      (0.050)      (0.050)
    Income (loss) from
     continuing operations     (0.035)      (0.035)      (0.028)      (0.028)
    Income (loss) for the
     period                    (0.004)      (0.004)      (0.038)      (0.038)
    FFO                         0.026        0.026        0.029        0.029
    AFFO                        0.013        0.013        0.024        0.024
    Distributable income        0.033        0.033        0.037        0.037


                                         Six Months Ended June 30
                               ---------------------------------------------
                                      2009                      2008
                               -----------------          ----------------
                                Basic      Diluted        Basic      Diluted
                               -------     -------       -------     -------
    Operating income            0.230         0.23        0.251        0.251
    Income (loss) from
     continuing operations
     before income tax
     recovery expense          (0.078)      (0.078)      (0.074)      (0.074)
    Income (loss) from
     continuing operations     (0.072)      (0.072)      (0.041)      (0.041)
    Income (loss) for the
     period                    (0.042)      (0.042)      (0.066)      (0.066)
    FFO                         0.039        0.039        0.068        0.068
    AFFO                        0.029        0.029        0.043        0.043
    Distributable income        0.057        0.057        0.079        0.079


    Second Quarter 2009 Compared to Second Quarter 2008

    -   NOI was relatively unchanged, increasing by approximately $39,000.

    -   Loss from continuing operations, before taxes, decreased by
        approximately $1.3 million or 36% primarily due to decreased
        amortization charges and strategic review expenses offset by
        increased financing costs.

    -   Income from discontinued operations amounted to $2.3 million,
        compared to a loss from discontinued operations of approximately
        $765,000 during the second quarter of 2008. The Q2-09 income includes
        a gain on sale of properties of $2.3 million.

    -   After considering future income tax recoveries, the second quarter
        loss was approximately $258,000, compared to a net loss of
        $2.8 Million in the second quarter of 2009.

    -   Cash provided by operating activities, excluding changes in non-cash
        operating items, decreased by $404,000. The decrease is primarily the
        result of increased leasing costs.

    -   FFO decreased by $192,000 or 9% during the second quarter of 2009,
        compared to the second quarter of 2008, while AFFO decreased by
        $803,000 or 46%. On a per unit basis, FFO decreased by $0.003 per
        unit, while AFFO decreased by $0.011 per unit.

    -   Distributable Income decreased by $271,000 or 10%, during the second
        quarter of 2009, compared to the second quarter of 2008


    Comparison to Preceding Quarter
    -------------------------------------------------------------------------

                                        Three Months Ended        Effect on
                                    ---------------------------     Income
                                        June 30,     March 31,     Increase
                                         2009          2009       (Decrease)
                                    -----------------------------------------
    Total revenues                  $ 16,243,978  $ 15,880,516  $    363,462
    Total operating and property
     management costs                  7,446,463     7,821,118       374,655
                                    ------------- ------------- -------------
    Net operating income               8,797,515     8,059,398       738,117
    Trust expenses                       830.413       788,675       (41,738)
                                    ------------- ------------- -------------
    Income before financing
     expense, amortization,
     discontinued operations
     and taxes                         7,967,102     7,270,723       696,379
    Financing expense                  6,015,244     6,477,719      (462,475)
                                    ------------- ------------- -------------
    Income before amortization,
     discontinued operations
     and taxes                         1,951,858       793,004     1,158,854
    Amortization                       4,297,746     4,162,460      (135,286)
                                    ------------- ------------- -------------
    Loss from continuing operations
     before income tax
     recoveries/expense               (2,345,888)   (3,369,456)    1,023,568
    Income tax recoveries               (204,644)      619,606      (824,250)
                                    ------------- ------------- -------------
    Loss from continuing operations   (2,660,532)   (2,749,850)      199,318
    Income from discontinued
     operations                        2,292,872       (59,455)    2,352,327
                                    ------------- ------------- -------------
    Income (loss) for the period    $   (257,660) $ (2,809,305) $  2,551,645
                                    ------------- ------------- -------------
                                    ------------- ------------- -------------
    

    Excluding income tax recoveries and discontinued operations, HREIT
incurred a loss of approximately $2.9 million during the second quarter of
2009, compared to a loss of approximately $3.4 million in the first quarter of
2009, representing a decrease in the loss of approximately $500,000. The
decrease in the loss mainly reflects an increase in net operating income of
approximately $738,000, partially offset by an increase in financing and
amortization costs.
    After including income tax recoveries and discontinued operations, HREIT
completed the second quarter of 2009 with a loss of $258,000 compared to a
loss of $2.8 million during the first quarter of 2009.

    Outlook for Second Half of 2009

    HREIT has improved its overall financial position during the second
quarter of 2009, as a result of the property sales and improved operating
results. During the third quarter of 2009, the sale of additional properties,
combined with the existing working capital, is expected to provide HREIT with
sufficient resources to meet its projected funding commitments for the balance
of the year.
    The following additional property sales have closed, or will close,
subsequent to the end of the second quarter of 2009:

    
    -   Southfort Square, a retail property located in Fort Saskatchewan,
        Alberta, was sold on July 1, 2009 at a gross selling price of
        $1,725,000. After accounting for expenses and the repayment of
        approximately $1.02 million of first mortgage debt, the sale resulted
        in net cash proceeds of approximately $600,000.

    -   Willowcreek Centre, a retail property located in Peterborough,
        Ontario, was sold for for a price of $7.25 Million. The sale is
        expected to close on September 1, 2009 and will result in net cash
        receipts of approximately $2.6 million.

    -   Douglasview Centre, a retail property located in Calgary, Alberta,
        was sold for a price of $3.9 million. The sale is expected to close
        on September 1, 2009 and will result in net cash receipts of
        approximately $1.2 million.

    HREIT has $37.3 million of mortgage loan debt maturing during the
remainder of 2009. All of the maturing debt is expected to be renewed, upward
re-financed or repaid from the proceeds arising from the sale of properties.

    About HREIT
    -----------
    

    HREIT is a real estate investment trust, which is listed on the Toronto
Stock Exchange under the symbols HNT.UN (Trust Units) and HNT.DB.C (Series C
Convertible Debentures). HREIT owns 72 income producing office, industrial,
retail and standalone parking lot properties that have a total gross leaseable
owned area of 4.8 million square feet; two land parcels held for development;
two properties held for sale; and other development and expansion
opportunities within the existing portfolio. The properties are located in
Manitoba, Ontario, Saskatchewan, Alberta, British Columbia and Northwest
Territories. HREIT also owns CRESI Inc., a third party property management
business. 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

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