Morguard Real Estate Investment Trust Announces 2008 Results



    MISSISSAUGA, ON, Feb. 26 /CNW/ - Morguard Real Estate Investment Trust
("Morguard REIT") (TSX: MRT.UN) today announced its financial results for the
year ended December 31, 2008.
    Morguard REIT's 2008 Financial Statements, and Management's Discussion
and Analysis along with its 2007 Annual Report are available on Morguard
REIT's website at www.morguardreit.com and have been filed with SEDAR at
www.sedar.com.

    
    HIGHLIGHTS

    -   Net operating income for 2008 increased to $112.4 million from
        $107.4 million for the same period in 2007;
    -   Net income for 2008 totaled $84.3 million or $1.43 per unit compared
        to $63.3 million or $1.07 per unit for the same period in 2007.
        Included in net income for 2008 was a gain on sale of real estate
        properties of $49.0 million compared to $34.7 million for the same
        period in 2007;
    -   Recurring distributable income for 2008 increased to $61.8 million or
        $1.05 per unit compared to $56.8 million or $0.96 per unit for the
        same period in 2007;
    -   Funds from operations ("FFO") for 2008 increased to $71.5 million or
        $1.21 per unit compared to $66.1 million or $1.12 per unit for the
        same period in 2007;
    -   Overall occupancy levels for 2008 remain high with the retail sector
        ending the year at 98% and the office sector at 94%.

    FINANCIAL HIGHLIGHTS

    Net Income
    ----------

    (In thousands of dollars except per unit amounts)       2008        2007
    -------------------------------------------------------------------------

    Income from real estate properties                  $201,985    $189,767
    Property operating income                           $112,412    $107,429

    Net income for the year from continuing operations  $ 72,006    $ 26,957
    Income for the year from discontinued operations      12,316      36,367
    -------------------------------------------------------------------------
    Net income for the year                             $ 84,322    $ 63,324
                                                        ---------------------
                                                        ---------------------

    Net income per unit (basic and diluted)
      Continuing operations                             $   1.22    $   0.46
      Discontinued operations                               0.21        0.61
    -------------------------------------------------------------------------
                                                        $   1.43    $   1.07
                                                        ---------------------
                                                        ---------------------


    Distributable Income
    --------------------
    
    The Trust distributes a portion of its net income after adjusting for
amortization of buildings and intangible assets and providing for any reserve
that the Trustees, in their discretion, consider reasonable. The adjusted net
income is referred to as distributable income and is computed as income, in
accordance with Canadian GAAP, before deduction for amortization of buildings
and intangible assets, less any reserves, provisions and allowances
established by the Trustees, plus any amount the Trustees, in their
discretion, determine to be appropriate.
    Recurring distributable income is distributable income excluding gain on
sales, unusual or non-recurring items and provisions for a diminution in value
of real estate properties.
    The following table outlines the Trust's distributable income, recurring
distributable income and payout ratios for the years ended December 31, 2008
and 2007.

    
    (In thousands of dollars except per-unit amounts
     and percentages)                                       2008        2007
    -------------------------------------------------------------------------
    Net income for the year                             $ 84,322    $ 63,324
    -------------------------------------------------------------------------

    Add/(deduct)
    Amortization - buildings                              21,957      21,697
    Amortization - intangibles                             5,868       6,190
    Amortization - above/(below) market rate leases, net  (1,028)       (910)
    Amortization - stepped rents                            (731)     (1,221)
    -------------------------------------------------------------------------

    Distributable income                                 110,388      89,080
    Gain on sale of real estate properties               (48,959)    (34,718)
    Cost of early extinguishment of mortgages payable          -         242
    Provision for diminution in value of real estate
     properties                                              400       2,150
    -------------------------------------------------------------------------

    Recurring distributable income                      $ 61,829    $ 56,754
                                                        ---------------------
                                                        ---------------------

    Distributed income - regular                        $ 53,122    $ 53,164
    Distributed income - special                          10,035           -
    -------------------------------------------------------------------------
    Total distributed income                            $ 63,157    $ 53,164
                                                        ---------------------
                                                        ---------------------

    Payout ratio:
      Recurring distributable income(1)                     85.9%       93.7%

    Recurring distributable income - basic and diluted  $   1.05    $   0.96

    Weighted average number of units - basic and
     diluted (in thousands)                               59,034      59,069
                                                        ---------------------
                                                        ---------------------

    ------------------------------
    (1) Payout ratio is calculated using regular distributions as a
        percentage of recurring distributable income.



    Funds from Operations
    ---------------------
    
    The real estate industry has adopted a measure of funds from operations
("FFO") to supplement net income as an operating performance measurement. The
Trust's calculation of FFO is consistent with the definition provided by the
Real Property Association of Canada ("REALPac").
    FFO is defined as net income adjusted for amortization of buildings,
deferred leasing costs, intangible items and any gain or loss on sale of real
estate properties and any provisions against capital. FFO per unit is
calculated by dividing FFO attributable to unitholders by the weighted average
number of units outstanding for the year.
    FFO was calculated as follows:

    
                           2008                          2007
                  -----------------------------------------------------------
    (In thousands
    of dollars                Dis-                          Dis-
    except per    Continuing continued          Continuing continued
    unit amounts) Operations Operations  Total  Operations Operations  Total
    -------------------------------------------------------------------------
    Net income    $ 72,006  $ 12,316  $ 84,322  $ 26,957  $ 36,367  $ 63,324

    Add/(deduct)
     items not
     affecting
     cash:
    Gain on sale
     of real
     estate
     properties    (36,981)  (11,978)  (48,959)        -   (34,718)  (34,718)
    Provision for
     diminution
     in value of
     real estate
     properties          -       400       400         -     2,150     2,150
    Amortization -
     buildings      21,957         -    21,957    21,074       623    21,697
    Amortization -
     intangibles     5,868         -     5,868     6,190         -     6,190
    Amortization -
     leasehold
     improvements    5,759         -     5,759     5,325        46     5,371
    Amortization -
     leasing costs   2,183         -     2,183     2,030        35     2,065
    -------------------------------------------------------------------------
    Funds from
     operations   $ 70,792  $    738  $ 71,530  $ 61,576  $  4,503  $ 66,079
                  -----------------------------------------------------------
                  -----------------------------------------------------------

    Funds from
     operations
     per unit:
      Basic and
       diluted    $   1.20  $   0.01  $   1.21  $   1.04  $   0.08  $   1.12
                  -----------------------------------------------------------
                  -----------------------------------------------------------
    

    Readers are cautioned that although the terms "Operating Income", "Funds
from Operations", "Distributable Income" and "Recurring Distributable Income"
are commonly used to measure, compare and explain the operating and financial
performance of Canadian real estate investment trusts and such terms are
defined in the Management's Discussion and Analysis, such terms are not
recognized terms under Canadian generally accepted accounting principles. Such
terms do not necessarily have a standardized meaning and may not be comparable
to similarly titled measures presented by the other publicly traded entities.

    
    -------------------------------------------------------------------------
    Morguard is a closed-end real estate investment trust, which owns a
    diversified portfolio of 50 retail, office, and industrial properties in
    Canada with a book value of $1.2 billion and approximately 7.7 million
    square feet of leasable space.  For more information, visit the Trust's
    website at www.morguardreit.com.
    -------------------------------------------------------------------------
    

    %SEDAR: 00008756E




For further information:

For further information: Rai Sahi, President and Chief Executive
Officer, Tel: (905) 281-4800, or; Tim Walker, Vice President and Chief
Financial Officer, Tel: (905) 281-4800


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