Huntingdon REIT reports 2007 second quarter results



    WINNIPEG, Aug. 14 /CNW/ - Huntingdon Real Estate Investment Trust
("HREIT") (TSX: HNT.UN) is pleased to report the financial results for the
quarter ended June 30, 2007. The following comments in regard to the financial
position and operating results of HREIT should be read in conjunction with the
2007 Second Quarter Report and the financial statements for the quarter ended
June 30, 2007, which may be obtained from the HREIT website at www.hreit.ca or
the SEDAR website at www.sedar.com.

    
    2007 SECOND QUARTER HIGHLIGHTS

    Acquisition and Development

    -   Invested $6.5 Million in the acquisition of two properties, with
        66,638 square feet of leasable area.

    -   Invested $2.6 Million in property improvements and leasing costs.

    -   Quarter ending portfolio consisting of 59 properties with a total
        leasable area of 4.8 million square feet.

    Financial

    Second quarter of 2007, compared to second quarter of 2006:

    -   Operating income increased by $3.5 Million or 47% in total and by
        $0.041 or 37% on a per unit basis.

    -   "Same property" operating income increased by $191,985 or 3.0% for
        the 45 properties which have been in the HREIT portfolio since
        April 1, 2006 and are not undergoing a redevelopment program
        (Portage Place).

    -   An increase in FFO and AFFO of $756,007 (21.2%) and $838,364 (22.9%),
        respectively, or $0.007 and $0.009 on a per unit basis.

    -   Quarter-ending occupancy rate for the entire portfolio has remained
        constant at 93%.

    -   An increase in distributable income of $1,614,158 or $0.019 per unit.

    Capital Structure

    -   Weighted average interest rate on the aggregate mortgage loan balance
        decreased to 6.43% at June 30, 2007 compared to 6.62% at
        June 30, 2006.

    -   Overall mortgage loan debt to current estimated property value ratio
        of 48.7% at June 30, 2007.

    Ongoing Investment Activities

    -   Subsequent to June 30, 2007, HREIT purchased three properties and
        five parking lots at a total purchase price of $30,290,317. HREIT has
        also entered into unconditional offer to purchase a portfolio of
        properties in Winnipeg at a total acquisition price of $26,500,000.
        In addition, HREIT is in negotiation to acquire other properties at a
        combined price of $26 Million.

    RESULTS OF OPERATIONS

    Financial and Operating Summary

                                Three Months Ended          Six Months Ended
                          ------------------------- -------------------------
                              June 30,     June 30,     June 30,     June 30,
                             ---------    ---------    ---------    ---------
                                 2007         2006         2007         2006
                                ------       ------       ------       ------
    CASH DISTRIBUTIONS
      Amount - total        5,020,700    4,724,108   10,051,091    9,441,801
             - per unit          0.07         0.07         0.14         0.14

    KEY PERFORMANCE INDICATORS

    Operating results
      Total revenue        18,390,334   12,810,291   36,092,277   23,824,597
      Operating income     10,942,823    7,451,109   20,801,194   13,598,188
      Income (loss) from
       continuing
       operations
       before income tax     (361,652)     148,407   (1,243,188)     204,237
      Income for the
       period               2,438,785      150,650    1,604,091      217,943

    Cash flows
      Cash inflow from
       operating
       activities           3,500,935   12,639,786    5,284,877   12,597,252
      Funds from
       Operations (FFO)     4,317,740    3,561,733    8,229,309    6,720,361
      Adjusted Funds from
       Operations (AFFO)    4,494,847    3,656,483    8,184,864    4,846,926
      Distributable income  5,033,900    3,419,742    8,846,597    6,445,920

    Operations
      Quarter-ending
       occupancy rate                                     93.0%        93.0%
      Increase in same
       property operating
       income                 191,985

    Capital reinvestment
      Additions to building
       and equipment        1,520,326      167,966    2,862,493      176,200
      Lease acquisition
       costs                  736,561      115,174    2,574,963    2,082,741
      Long term maintenance
       costs
        Recoverable           305,799      632,137      439,210      680,398
        Non recoverable         7,052            -      133,913        3,237
                          ------------ ------------ ------------ ------------
        Total                 312,851      632,137      573,123      683,635
                          ------------ ------------ ------------ ------------

    Financing
      Mortgage loan debt
       ratio at quarter end                               48.7%        53.3%
      Weighted average
       interest rate of
       long-term debt at
       quarter end                                        6.43%        6.62%



    PER UNIT AMOUNTS

                                                  Three Months Ended
                                                 --------------------
                                           June 30, 2007       June 30, 2006
                                          ---------------     ---------------
                                        Basic    Diluted    Basic    Diluted
                                      --------- --------- --------- ---------
    Operating income                     0.152     0.152     0.111     0.110
    Income (loss) from continuing
     operations before income tax       (0.005)   (0.005)    0.002     0.002
    Income (loss) for the period         0.034     0.034     0.002     0.002
    Distributable income                 0.070     0.070     0.051     0.051
    Funds from Operations (FFO)          0.060     0.060     0.053     0.053
    Adjusted Funds from
     Operations (AFFO)                   0.063     0.062     0.054     0.054


                                                    Six Months Ended
                                                   ------------------
                                           June 30, 2007       June 30, 2006
                                          ---------------     ---------------
                                        Basic    Diluted    Basic    Diluted
                                      --------- --------- --------- ---------
    Operating income                     0.291     0.291     0.202     0.201
    Income (loss) from continuing
     operations before income tax       (0.017)   (0.017)    0.003     0.003
    Income (loss) for the period         0.022     0.022     0.003     0.003
    Distributable income                 0.124     0.124     0.096     0.095
    Funds from Operations (FFO)          0.115     0.115     0.100     0.100
    Adjusted Funds from
     Operations (AFFO)                   0.114     0.114     0.072     0.072
    

    Overall, operating results for the second quarter of 2007 were generally
in accordance with expectations. Operating income and cash flow from operating
activities for the three month period ended June 30, 2007, excluding changes
in non-cash operating items, increased by 46% and 66% respectively, compared
to the three month period ended June 30, 2006. For the six month period ended
June 30, 2007, operating income and cash flow from operating activities,
excluding changes in non-cash operating items, increased by 53% and 74%
respectively, compared to the six month period ended June 30, 2006.
    HREIT incurred a loss from continuing operations of $361,652, before
income tax charges during the second quarter of 2007, compared to income of
$148,407 during the second quarter of 2006. The loss reflects total
amortization charges of approximately $4.7 Million in 2007, compared to
approximately $3.5 Million in 2006. The increase in amortization charges
mainly reflects the cumulative growth in the HREIT property portfolio.
    On a bottom line basis, net income increased by $2,288,135 during the
second quarter of 2007 compared to the second quarter of 2006. The increase in
net income is almost entirely attributable to the future income tax recovery
which was recorded in the second quarter of 2007 in the amount of $2,594,163.
For the six months ended June 30, 2007, net income increased by $1,386,148
compared to the first six months of 2006.

    
    During the first half of 2007, the accomplishments of HREIT also included
the following:

    -   the acquisition of nine additional properties at a total purchase
        price of approximately $40 Million.

    -   the investment of approximately $6.0 Million in leasehold and
        property improvements, including $4.3 Million which has been directed
        toward comprehensive redevelopment programs at 5 properties.

    -   the successful completion of a private offering of trust units and a
        public offering of convertible debentures which raised total gross
        proceeds of approximately $58.3 Million.

    -   the repayment of approximately $21 Million of higher interest-rate
        secondary mortgage loan debt.

    Comparison to 2007 First Quarter
    -------------------------------------------------------------------------
                                   Three Months Ended
                            --------------------------------
                                                                    Increase
                             June 30, 2007   March 31, 2007        (Decrease)
                            -------------------------------------------------
    Operating income          $ 10,942,823     $  9,858,371     $  1,084,452

    Financing expense            5,940,419        5,443,826          496,593
                             --------------   --------------   --------------
    Operating income, net
     of financing expense        5,002,404        4,414,545          587,859

    Trust expense                  687,262          491,566          195,696
                             --------------   --------------   --------------
    Income from continuing
     operations, before
     amortization                4,315,142        3,922,979          392,163

    Amortization                 4,676,794        4,804,515         (127,721)
                             --------------   --------------   --------------
    Income (loss) from
     continuing operations
     before income taxes          (361,652)        (881,536)         519,884

    Income tax recovery          2,654,163           53,402        2,600,761
                             --------------   --------------   --------------
    Income (loss) from
     continuing operations       2,292,511         (828,134)       3,120,645

    Income (loss) from
     discontinued
     operations                    146,274           (6,560)         152,834
                             --------------   --------------   --------------

    Net income (loss)         $  2,438,785     $   (834,694)    $  3,273,479
                             --------------   --------------   --------------
                             --------------   --------------   --------------
    

    At June 30, 2007, HREIT's capital reserves were not fully invested in new
property acquisitions. As a result of the extent of unrealized income from
properties under development and the cost of carrying uninvested capital,
HREIT incurred a net loss from continuing operations before taxes of $361,652
during the second quarter of 2007. This was an improvement, however, compared
to the net loss from continuing operations of $881,536 incurred during the
second quarter of 2007.
    On a bottom line basis, net income increased by $3,273,479 to a net
income of 2,438,785 in the second quarter of 2007 compared to a net loss of
834,694 in the first quarter of 2007. The increase in net income is almost
entirely attributable to the future income tax recovery which was recorded in
the second quarter of 2007 in the amount of $2,594,163.
    The operating results for the first and second quarters of 2007 do not
reflect the funding of rent payments and income supplements from funds in
escrow. During the first and second quarters of 2007, the rent payments and
income supplements funded from escrow amounted to $547,767 and $728,348,
respectively.
    During the third quarter of 2007, a significant portion of the existing
capital reserves of HREIT will be utilized to fund the acquisition of
additional income-producing properties. HREIT has acquired, or entered into
unconditional agreements to acquire, additional properties in Winnipeg,
Manitoba with a combined purchase price of $56.3 Million of which
approximately $15.7 Million is to be funded in cash. The acquisition of
additional properties, combined with the completion of major redevelopment
programs and ongoing improvements in the operating results of the other
properties will enable HREIT to achieve continued growth in operating income
and cash flows in the third quarter of 2007 and beyond.

    HREIT is a real estate investment trust, which is listed on the Toronto
Stock Exchange under the symbol HNT.UN. The objective of HREIT is to provide
Unitholders with stable cash distributions from investment in a geographically
diversified Canadian portfolio of quality commercial and industrial real
estate properties. There are currently 71,941,602 trust units outstanding. For
further information on HREIT, please visit our website at www.hreit.ca.

    This press release contains certain statements that could be considered
as forward-looking information. The forward-looking information is subject to
certain risks and uncertainties, which could result in actual results
differing materially from the forward-looking statements.

    The Toronto Stock Exchange has not reviewed or approved the contents of
    this press release and does not accept responsibility for the adequacy or
    accuracy of this press release.





For further information:

For further information: Arni Thorsteinson, President & Chief Executive
Officer, or Gino Romagnoli, Investor Relations, Tel: (204) 475-9090, Fax:
(204) 452-5505, Email: info@hreit.ca

Organization Profile

HUNTINGDON REAL ESTATE INVESTMENT TRUST

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