Nexus Real Estate Investment Trust announces continued strong Q1 results and June distribution

TORONTO and MONTREAL, May 30, 2017 /CNW Telbec/ - NEXUS Real Estate Investment Trust (the "REIT") (TSXV: NXR.UN) announced today its results for the three months ended March 31, 2017 and the declaration of the June 2017 distribution.

Highlights

  • AFFO per unit of $0.054 for the quarter, increase of 2.3% over normalized AFFO per unit for Q1 2016 of $0.053.
  • AFFO payout ratio of 74.0% for the quarter, down from the normalized AFFO payout ratio of 75.7% in the same quarter of the prior year.
  • Conservative debt to total assets ratio of 48.1%.
  • Industry leading 100% occupancy for the 17th straight quarter.
  • Contractual rent increases took effect January 1, 2017, amounting to $43,000 for the quarter.
  • Completed merger with Nobel REIT on April 3, 2017; combined entity renamed Nexus REIT (TSXV: NXR.UN).
  • Strategic relationship established with RFA Capital, complementing existing relationship with TriWest Capital Partners.

"We continue to deliver the strong consistent results our unitholders expect and are pleased to see that the market is recognizing the value we have created through our prudent management and growth, including the addition of the former Nobel REIT property platform." stated Kelly Hanczyk, the REIT's Co-Chief Executive Officer. "Now that the merger has been completed, we look forward to continued growth in 2017 through leveraging our relationships with RFA, TriWest Capital Partners, and others within the industry."

Summary of Results

Included in the tables that follow and elsewhere in this news release are non-IFRS measures that should not be construed as an alternative to net income / loss, cash from operating activities or other measures of financial performance calculated in accordance with IFRS, and may not be comparable to similar measures as reported by other issuers. Readers are encouraged to refer to the REIT's MD&A for further discussion of the non-IFRS measures presented.

 




Three months ended March 31,


2017

2016

Financial Results

$

$

Property revenue

4,010,136

3,724,541

Net operating income

3,318,986

3,150,355

Net income

13,289

2,326,752

Net income excluding transaction costs, fair value adjustments and other income

1,778,830

1,647,213




Three months ended March 31,


2017

2016

Financial Highlights

$

$

FFO (1) (4)

2,020,773

2,132,320

Normalized FFO (1) (4)

2,020,773

1,875,792

AFFO (1) (4)

2,265,836

2,368,903

Normalized AFFO

2,265,836

2,112,375

Distributions declared (2) 

1,677,645

1,599,578

Weighted average units outstanding – basic (3)

41,886,354

39,954,855

Weighted average units outstanding – diluted (3)

41,901,070

39,954,855

Distributions per unit, basic and diluted (2)

0.040

0.040

FFO per unit, basic and diluted (1) (4)

0.048

0.053

Normalized FFO per unit, basic and diluted (1) (4)

0.048

0.047

AFFO per unit, basic and diluted (1) (4)

0.054

0.059

Normalized AFFO per unit, basic and diluted (1) (4)

0.054

0.053

AFFO payout ratio, basic (1) (2) (4)

74.0%

67.5%

Normalized AFFO payout ratio, basic (1) (2) (4)

74.0%

75.7%

Debt to total assets ratio

48.1%

49.6%

(1)

Non-IFRS Measure

(2)

Includes distributions payable to holders of Class B LP Units which are accounted for as interest expense in the consolidated financial statements.

(3)

Weighted average number of units includes the Class B LP Units.

(4)

For the three months ended March 31, 2016, FFO and AFFO include $256,528 of other income relating to the release in the first quarter of 2016 of funds previously held in an environmental escrow in connection with the acquisition of ten industrial properties on January 14, 2014. This is a one-time item which is excluded from normalized FFO and normalized AFFO for the three months ended March 31, 2016. 

 

Revenues and Results from Operations in Line with Expectations

Property revenue increased to $4,010,136 in the quarter as compared to $3,724,541 in the same quarter of 2016. Net operating income grew to $3,318,986 in the quarter as compared to $3,150,355 in the same quarter of 2016. The growth in property revenue and net operating income is primarily attributable to the impact of the acquisition completed on August 22, 2016, which contributed approximately $160,000 to property revenue and net operating income in the quarter. Contractual rent increases of $43,000, net of straight-line adjustments, added $34,000 of operating income in the quarter as compared to the same quarter of 2016.

Transaction Costs

Transaction costs of $778,155 for the three months ended March 31, 2017 relate to legal and other professional fees incurred with respect to the acquisition of Nobel REIT. These costs have been expensed in the period incurred as the acquisition, which closed on April 3, 2017, will be accounted for as a business combination.

Balance Sheet and Liquidity

The REIT's debt to total assets ratio was 48.1% at March 31, 2017, down from 49.6% at December 31, 2016. Debt balances were lower by approximately $871,000 at March 31, 2017 as compared to December 31, 2016, and total assets increased approximately $450,000 as compared to December 31, 2016.

June Distribution

The REIT will make a cash distribution in the amount of $0.01333 per unit, representing $0.16 per unit on an annualized basis, payable July 14, 2017 to unitholders of record as of June 30, 2017.

The REIT's current distribution per unit continues to be $0.01333 per month. The REIT's distribution reinvestment program ("DRIP") entitles eligible unitholders to elect to receive all, or a portion of the cash distributions of the REIT reinvested in units of the REIT. Eligible unitholders who so elect will receive a bonus distribution of units equal to 4% of each distribution that was reinvested by them under the DRIP.

About Nexus REIT

Nexus REIT is a growth oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership and management of industrial, office and retail properties located in primary and secondary markets in North America. The REIT currently owns a portfolio of 36 properties comprising approximately 2.1 million square feet of rentable area. The REIT has approximately 53,664,641 units issued and outstanding. Additionally, there are 6,034,565 Class B LP units of subsidiary limited partnerships of the REIT issued and outstanding.

Forward Looking Statements

Certain statements contained in this news release constitute forward-looking statements which reflect the REIT's current expectations and projections about future results. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Such forward-looking statements are based on a number of assumptions that may prove to be incorrect.

While the REIT anticipates that subsequent events and developments may cause its views to change, the REIT specifically disclaims any obligation to update these forward-looking statements except as required by applicable law. These forward-looking statements should not be relied upon as representing the REIT's views as of any date subsequent to the date of this news release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the REIT.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

 

SOURCE Nexus Real Estate Investment Trust

For further information: Kelly C. Hanczyk, co-CEO at (403) 817-9497; Jean Teasdale, co-CEO at (514) 840-9339; Rob Chiasson, CFO at (403) 817-9496


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