TORONTO, Nov. 5, 2013 /CNW/ - Firm Capital Property Trust ("FCPT" or the "Trust"), (TSXV : FCD.UN) reported today its condensed interim consolidated financial results for the three and nine months ended September 30, 2013.
Rental revenue for the three and nine months ended September 30, 2013 was $1,504,844 and $3,248,974, respectively. Net Operating Income ("NOI") for the three and nine months ended September 30, 2013 was $1,029,246 and $2,193,369 respectively. NOI margin for the three and nine months ended September 30, 2013 was 68%.
For the three months ended September 30, 2013, FFO per Unit was $0.123 while AFFO per Unit was $0.117. FFO and AFFO payout ratios are 71% and 75%, respectively. For the nine months ended September 30, 2013, FFO per Unit was $0.319 while AFFO per Unit was $0.302. FFO and AFFO payout ratios are 82% and 87%, respectively. Excluding non-recurring items, FFO on a stabilized basis for the three and nine months ended September 30, 2013 would decrease to $0.114 and $0.294 per Unit, respectively. This results in an FFO payout ratio of 77% and 89%, respectively. Likewise, AFFO on a stabilized basis for the three and nine months ended September 30, 2013 would decrease to $0.108 and $0.277 per Unit, respectively. This results in an AFFO payout ratio of 81% and 95%, respectively.
PROPERTY PORTFOLIO HIGHLIGHTS
The Trust's property portfolio consists of 30 properties with a total Gross Leasable Area ("GLA") of 671,798 square feet, a 94.3% occupancy rate and a weighted average net rent per square foot ("PSF") of $6.27 PSF. Debt/Gross Book Value ("GBV") stands at 50.6%.
The portfolio is well diversified across geographies with 42% of the NOI generated from Ontario, 42% from Quebec and 16% from Nova Scotia. The portfolio is equally diversified across asset classes with 46% of NOI generated from Net Lease Convenience Retail, 42% from Industrial and 12% from Core Service Provider.
On August 1, 2013, the Trust closed the previously announced acquisition of a 50% participation in 25 industrial buildings located in Montreal. The total purchase price of 100% of the portfolio was $48.8 million, including closing costs and working capital adjustments. The portfolio is comprised of 1,029,898 square feet of GLA and is currently 93% occupied. The portfolio was financed with proceeds from two new first mortgage financings and from a private placement of trust units. 50% of the Portfolio was acquired by the Trust, while the remaining 50% was acquired by an entity associated with the Trust's asset manager that consists predominantly of senior management and trustees of FCPT. The funding required by the Trust for its 50% interest came from a combination of existing cash resources, new mortgage financing and a $6.4 million non-brokered private placement at $5.10 per trust unit.
As a result of this acquisition, the Trust increased the size of its current portfolio from five properties at the end of Q3/2013 to 30 properties with a current value of approximately $60 million. In addition, the acquisition improved the diversification of the current portfolio through the addition of the industrial asset class to the existing retail and medical office asset classes.
On October 31, 2013, the Trust announced that its Board of Trustees approved a 5.7% increase in its monthly distributions to $0.030833 per unit from $0.029166 per unit. On an annualized basis this equates to anticipated distributions of $0.37 per unit up from $0.35.
The previously announced cash distributions of $0.029166 per unit for the months of November and December, 2013 have been amended to $0.030833 per unit to account for the change to the Trust's monthly distributions. These distributions will be paid on or about December 16, 2013 and January 15, 2014 to unitholders of record at the close of business on November 29, 2013 and December 31, 2013, respectively.
The increase in the Trust's monthly distributions is a result of FCPT's improved financial performance and the recent growth of its real estate portfolio. We anticipate this revised distribution will result in an AFFO payout ratio of approximately 85% over the following 12 months.
DISTRIBUTIONS FOR JANUARY, FEBRUARY AND MARCH 2014
The Trust is also pleased to announce monthly cash distributions of $0.030833 per Trust unit for the months of January, February and March, 2014. These distributions will be paid on or about February 17, 2014, March 17, 2014 and April 15, 2014 to unitholders of record at the close of business on January 31, 2014; February 28, 2014; and March 31, 2014, respectively.
The policy of FCPT is to pay cash distributions on or about the 15th day of each month to Unitholders of record on the last business day of the preceding month. Distributions paid to Unitholders who are non-residents of Canada will be subject to Canadian withholding tax.
DISTRIBUTION REINVESTMENT PLAN & UNIT PURCHASE PLAN
The Trust has in place a Distribution Reinvestment Plan ("DRIP") and Unit Purchase Plan (the "Plan"). Under the terms of the DRIP, FCPT's Unitholders may elect to automatically reinvest all or a portion of their regular monthly distributions in additional Units, without incurring brokerage fees or commissions. Under the terms of the Plan, FCPT's Unitholders may purchase a minimum of $1,000 of Units per month and maximum purchases of up to $12,000 per annum. Management and trustees have not participated in the DRIP or Plan to date and own approximately 13% of the issued and outstanding trust units of the Trust.
ABOUT FIRM CAPITAL PROPERTY TRUST
Firm Capital Property Trust is focused on creating long-term value for Unitholders, through capital preservation and disciplined investing to achieve stable distributable income. In partnership with management and industry leaders, The Trust's plan is to co-own a diversified property portfolio of multi-residential, flex industrial, net lease convenience retail, and core service provider professional space. In addition to stand alone accretive acquisitions, the Trust will make joint acquisitions with strong financial partners and acquisitions of partial interests from existing ownership groups, in a manner that provides liquidity to those selling owners and professional management for those remaining as partners. Firm Capital Realty Partners Inc., through a structure focused on an alignment of interests with the Trust, will source, syndicate and participate in investments.
FORWARD LOOKING INFORMATION
This press release may contain forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", and by discussions of strategies that involve risks and uncertainties. The forward-looking statements are based on certain key expectations and assumptions made by the Trust regarding, among other things, the use of the net proceeds from the Offering, the closing of the Offering, and the closing of the Acquisition. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Although management of the Trust believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Neither the Trust nor any other person assumes responsibility for the accuracy and completeness of any forward-looking statements, and no one has any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or such other factors which affect this information, except as required by law.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of a prospectus, nor shall there be any sale of the Units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The Units of the Firm Capital Property Trust have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an application for exemption from the registration requirements of U.S. securities laws.
SOURCE: Firm Capital Property Trust
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President & Chief Executive Officer
Chief Financial Officer