Morguard Real Estate Investment Trust Announces Q1 2007 Results



    TORONTO, April 27 /CNW/ - Morguard Real Estate Investment Trust
("Morguard REIT") (TSX: MRT.UN) today announced its financial results for the
three month period ended March 31, 2007.
    Morguard REIT's Q1 2007 Financial Statements, and Management's Discussion
and Analysis along with its 2006 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 Q1 2007 increased to $26.4 million from
        $24.7 million for the same period in 2006;

    -   Net income for Q1 2007 totaled $7.8 million or $0.13 per unit
        compared to $4.9 million or $0.11 per unit for the same period in
        2006;

    -   Recurring distributable income for Q1 2007 increased to $14.2 million
        or $0.24 per unit compared to $11.3 million or $0.24 per unit (fully
        diluted) for the same period in 2006;

    -   Funds from operations ("FFO") for Q1 2007 increased to $16.2 million
        or $0.27 per unit compared to $13.0 million or $0.27 per unit (fully
        diluted) for the same period in 2006;

    -   Occupancy levels increased to 95% at March 31, 2007 compared to 93%
        at March 31, 2006.

    FINANCIAL HIGHLIGHTS

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

                                                         Three months ended
                                                                March 31,
    (In thousands of dollars except per unit amounts)       2007      2006
    -------------------------------------------------------------------------
    Income from real estate properties                   $ 48,458   $ 43,980
    Net operating income                                 $ 26,442   $ 24,685

    Net income from continuing operations                $  6,379   $  4,000
    Income from discontinued operations                     1,383        886
    -------------------------------------------------------------------------
    Net income                                           $  7,762   $  4,886
                                                        ---------------------
                                                        ---------------------
    Net income per unit (basic and diluted)
         Continuing operations                           $   0.11   $   0.09
         Discontinued operations                             0.02       0.02
    -------------------------------------------------------------------------
                                                         $   0.13   $   0.11
                                                        ---------------------
                                                        ---------------------

    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 period ended March 31, 2007 and
2006.


    (In thousands of dollars except per unit                   March 31,
     amounts and percentages)                                2007       2006
    -------------------------------------------------------------------------
    Net income                                           $  7,762   $  4,886
    -------------------------------------------------------------------------
    Add (deduct)
    Stepped rents - straight-line adjustment                 (406)      (551)
    Amortization - buildings                                5,312      6,148
    Amortization - intangibles                              1,496        253
    Amortization - above/below market rate leases, net       (198)        26
    Amortization - issue costs convertible debentures           -        315
    Accretion of convertible debentures                         -        229
    -------------------------------------------------------------------------
    Distributable income                                   13,966     11,306
    Cost of early extinguishment of mortgage bonds
     payable                                                  242          -
    -------------------------------------------------------------------------
    Recurring distributable income                       $ 14,208   $ 11,306
                                                        ---------------------
                                                        ---------------------

    Distributed income                                   $ 13,287   $ 10,211
                                                        ---------------------
                                                        ---------------------

    Payout Ratio:  Recurring distributable income            93.5%      90.3%

    Per Unit
    Basic:   Distributable income                        $   0.24   $   0.25
             Recurring distributable income              $   0.24   $   0.25
    Diluted: Distributable income                        $   0.24   $   0.24
             Recurring distributable income              $   0.24   $   0.24

    Weighted average number of units (in thousands)        59,050     45,524
                                                        ---------------------
                                                        ---------------------

    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:

                                                 March 31, 2007
                                  -------------------------------------------
    (In thousands of dollars        Continuing   Discontinued
     except per unit amounts)       Operations     Operations          Total
    -------------------------------------------------------------------------
    Net income                     $     6,379    $     1,383    $     7,762

    Add (deduct) items not
     affecting cash:
    Amortization - buildings             5,312              -          5,312
    Amortization - leasehold
                   improvements          1,239              -          1,239
    Amortization - intangibles           1,496              -          1,496
    Amortization - leasing costs           398              -            398
    -------------------------------------------------------------------------
    Funds from operations          $    14,824    $     1,383    $    16,207
                                  -------------------------------------------
                                  -------------------------------------------
    Funds from operations
     per unit:
      Basic                        $      0.25    $      0.02    $      0.27
      Diluted                      $      0.25    $      0.02    $      0.27
                                  -------------------------------------------
                                  -------------------------------------------


                                                 March 31, 2006
                                  -------------------------------------------
    (In thousands of dollars        Continuing   Discontinued
     except per unit amounts)       Operations     Operations          Total
    -------------------------------------------------------------------------
    Net income                     $     4,000    $       886    $     4,886

    Add (deduct) items not
     affecting cash:
    Amortization - buildings             4,794          1,354          6,148
    Amortization - leasehold
                   improvements          1,240             78          1,318
    Amortization - intangibles             253              -            253
    Amortization - leasing costs           325             48            373
    -------------------------------------------------------------------------
    Funds from operations          $    10,612    $     2,366    $    12,978
                                  -------------------------------------------
                                  -------------------------------------------
    Funds from operations
     per unit:
      Basic                        $      0.23    $      0.05    $      0.28
      Diluted                      $      0.23    $      0.04    $      0.27
                                  -------------------------------------------
                                  -------------------------------------------

    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 68 retail, office, and industrial properties in
    Canada with a book value of $1.3 billion and approximately 9.3 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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