Morguard Real Estate Investment Trust Announces Q2 2008 Results



    MISSISSAUGA, ON, July 31 /CNW/ - Morguard Real Estate Investment Trust
("Morguard REIT") (TSX: MRT.UN) today announced its financial results for the
three and six-month periods ended June 30, 2008.
    Morguard REIT's Q2 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 Q2 2008 increased to $27.5 million from
        $26.1 million for the same period in 2007;

    -   Net income for Q2 2008 totaled $14.4 million or $0.24 per unit
        compared to $32.7 million or $0.55 per unit for the same period in
        2007. Included in net income for Q2 2008 was a gain on sale of real
        estate properties of $6.8 million compared to $25.2 million for the
        same period in 2007;

    -   Recurring distributable income for Q2 2008 increased to $14.6 million
        or $0.25 per unit compared to $13.7 million or $0.23 per unit (fully
        diluted) for the same period in 2007;

    -   Funds from operations ("FFO") for Q2 2008 increased to $17.1 million
        or $0.29 per unit compared to $15.9 million or $0.27 per unit for the
        same period in 2007;

    -   Overall occupancy levels for 2008 remains high and stable at 96%
        compared with 94% in Q2 2007.


    FINANCIAL HIGHLIGHTS

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

    (In thousands of dollars except per unit amounts)

    Three-month period ended June 30,                        2008       2007
    -------------------------------------------------------------------------

    Income from real estate properties                   $ 49,255   $ 46,093
    Net operating income                                 $ 27,472   $ 26,095

    Net income from continuing operations                $  7,354   $  6,527
    Income from discontinued operations                     7,036     26,149
    -------------------------------------------------------------------------
    Net income                                           $ 14,390   $ 32,676
                                                     ------------------------
                                                     ------------------------

    Net income per unit (basic and diluted)
      Continuing operations                              $   0.12   $   0.11
      Discontinued operations                                0.12       0.44
    -------------------------------------------------------------------------
                                                         $   0.24   $   0.55
                                                     ------------------------
                                                     ------------------------
    

    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 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-month period ended June
30, 2008 and 2007.

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

    Three-month period ended June 30,                        2008       2007
    -------------------------------------------------------------------------

    Net income                                           $ 14,390   $ 32,676
    -------------------------------------------------------------------------

    Add (deduct)
    Amortization - buildings                                5,479      5,319
    Amortization - intangibles                              1,891      1,512
    Amortization - above/(below) market rate leases, net     (265)      (226)
    Stepped rents - straight-line adjustment                 (157)      (354)
    -------------------------------------------------------------------------

    Distributable income                                   21,338     38,927
    Gain on sale of real estate properties                 (6,771)   (25,236)
    -------------------------------------------------------------------------

    Recurring distributable income                       $ 14,567   $ 13,691
                                                     ------------------------
                                                     ------------------------

    Distributed income                                   $ 13,286   $ 13,289
                                                     ------------------------
                                                     ------------------------
    Payout ratio:
      Recurring distributable income                        91.2%      97.1%

    Recurring distributable income -
     basic and diluted                                   $   0.25   $   0.23

    Weighted average number of units -
     basic and diluted (in thousands)                      59,050     59,063
                                                     ------------------------
                                                     ------------------------
    


    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:

    (In thousands of dollars except per-unit amounts)

    Three-month
     period ended        June 30, 2008                 June 30, 2007
               --------------------------------------------------------------

                Continuing Discontinued        Continuing Discontinued
                Operations Operations   Total  Operations Operations   Total
    -------------------------------------------------------------------------
    Net income     $ 7,354   $ 7,036   $14,390   $ 6,527   $26,149   $32,676

    Add (deduct)
     items not
     affecting cash:
    (Gain)/Loss on
     sale of real
     estate
     properties         42    (6,813)   (6,771)        -   (25,236)  (25,236)
    Amortization -
     buildings       5,479         -     5,479     5,153       166     5,319
    Amortization -
     leasehold
     improvements    1,508         -     1,508     1,244         3     1,247
    Amortization -
     intangibles     1,891         -     1,891     1,512         -     1,512
    Amortization -
     leasing costs     614         -       614       391        16       407
    -------------------------------------------------------------------------
    Funds from
     operations    $16,888   $  223    $17,111   $14,827   $ 1,098   $15,925
                  -----------------------------------------------------------
                  -----------------------------------------------------------

    Funds from
     operations
     per unit:
      Basic and
       diluted     $  0.29   $     -   $  0.29   $  0.25   $  0.02   $  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 50 retail, office, and industrial 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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