Morguard Real Estate Investment Trust Announces 2009 Second Quarter Results



    MISSISSAUGA, ON, Aug. 5 /CNW/ - Morguard Real Estate Investment Trust
("Morguard REIT") (TSX: MRT.UN) today announced its financial results for the
three and six months ended June 30, 2009.
    Morguard REIT's Q2 2009 Financial Statements, and Management's Discussion
and Analysis along with its 2008 Annual Report are available on Morguard
REIT's website at www.morguardreit.com and have been filed with SEDAR at
www.sedar.com.

    
    HIGHLIGHTS FOR Q2 2009

    -   Net operating income increased to $29.7 million from $28.2 million
        for the same period in 2008;
    -   Net income totaled $9.2 million or $0.16 per unit compared to $14.4
        million or $0.24 per unit for the same period in 2008. Included in
        net income for Q2 2008 was a gain on sale of real estate properties
        of $6.8 million;
    -   Recurring distributable income increased to $16.9 million or $0.30
        per unit compared to $15.3 million or $0.26 per unit for the same
        period in 2008;
    -   Funds from operations ("FFO") increased to $18.7 million or $0.32 per
        unit compared to $17.9 million or $0.30 per unit for the same period
        in 2008;
    -   Portfolio occupancy levels decreased slightly to 95.2% from 95.7% at
        June 30, 2008.

    FINANCIAL HIGHLIGHTS

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

    (In thousands of dollars except per unit amounts)

    Three-month period ended June 30,                       2009        2008
    -------------------------------------------------------------------------

    Income from real estate properties                  $ 51,529    $ 49,255
    Property operating income                           $ 29,659    $ 28,240

    Net income for the period from continuing
     operations                                         $  9,200    $  7,396
    Income for the period from discontinued operations         -       7,036
    -------------------------------------------------------------------------
    Net income for the period                           $  9,200    $ 14,432
                                                      -----------------------
                                                      -----------------------

    Net income per unit
      Continuing operations                             $   0.16    $   0.12
      Discontinued operations                                  -        0.12
    -------------------------------------------------------------------------
                                                        $   0.16    $   0.24
                                                      -----------------------
                                                      -----------------------

    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 three months ended June 30,
2009 and 2008.

    
    (In thousands of dollars except per-unit amounts and percentages)

    Three-month period ended June 30,                       2009        2008
    -------------------------------------------------------------------------

    Net income for the period                           $  9,200    $ 14,432
    -------------------------------------------------------------------------

    Add/(deduct)
    Amortization - buildings                               6,698       6,205
    Amortization - intangibles                               972       1,891
    Amortization - above/(below) market rate leases,
     net                                                    (228)       (265)
    Amortization - stepped rents                             231        (157)
    -------------------------------------------------------------------------

    Distributable income                                  16,873      22,106
    Gain on sale of real estate properties                     -      (6,771)
    -------------------------------------------------------------------------

    Recurring distributable income                      $ 16,873    $ 15,335
                                                      -----------------------
                                                      -----------------------

    Distributed income                                  $ 12,888    $ 13,286
                                                      -----------------------
                                                      -----------------------

    Payout ratio:
      Recurring distributable income                       76.4%       86.6%

    Recurring distributable income - per unit           $   0.30    $   0.26

    Weighted average number of units - (in thousands)     57,623      59,050
                                                      -----------------------
                                                      -----------------------


    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 period.

    
    FFO was calculated as follows:

    Three months
     ended,               June 30, 2009               June 30, 2008
                  -----------------------------------------------------------
    (In thousands
    of dollars                Dis-                          Dis-
    except per    Continuing continued          Continuing continued
    unit amounts) Operations Operations  Total  Operations Operations  Total
    -------------------------------------------------------------------------

    Net income/
     (loss)       $  9,200  $      -  $  9,200  $  7,396  $  7,036  $ 14,432

    Add/(deduct)
     items not
     affecting
     cash:
    (Gain)/loss
     on sale of
     real estate
     properties          -         -         -        42    (6,813)   (6,771)
    Amortization -
     buildings       6,698         -     6,698     6,205         -     6,205
    Amortization -
     leasehold
     improvements    1,204         -     1,204     1,508         -     1,508
    Amortization -
     intangibles       972         -       972     1,891         -     1,891
    Amortization -
     deferred
     leasing costs     646         -       646       614         -       614
    -------------------------------------------------------------------------
    Funds from
     operations   $ 18,720  $      -  $ 18,720  $ 17,656  $    223  $ 17,879
                  -----------------------------------------------------------
                  -----------------------------------------------------------

    Funds from
     operations
     per unit:    $   0.32  $      -  $   0.32  $   0.30  $      -  $   0.30
                  -----------------------------------------------------------
                  -----------------------------------------------------------
    

    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 mixed-use properties in
    Canada with a book value of $1.2 billion and approximately 7.6 million
    square feet of leasable space. For more information, visit the Trust's
    website at www.morguardreit.com.
    -------------------------------------------------------------------------
    





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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