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TORONTO, Nov. 14, 2019 /CNW/ - Inovalis Real Estate Investment Trust (the "REIT") (TSX: INO.UN)
Funds from Operations ("FFO"), Adjusted Funds from Operations ("AFFO") In Q3 2019, the REIT reported Funds from Operations (FFO) and Available Funds from Operations (AFFO) of CAD$0.23 and CAD$0.21 per unit respectively. This marks an improvement on FFO and AFFO over both Q2 2019 and Q3 2018. In line with these increases both the REIT's FFO and AFFO payout ratios improved, quarter to quarter, from 101.4% to 88.0% and the AFFO payout ratio improved from 98.6% to 97.3%.
Leasing Operations Q3 2019 saw the REIT benefit from Management's efforts to let several vacant spaces of the portfolio assets. A new lease was signed for the Stuttgart property (4,063 sq.ft.) while at the Jeuneurs property, an agreement was signed with the current single tenant to extend the in-place lease by 2 years and 8 months. Management continues to strive to lease the remaining vacant surfaces, selectively completing CAPEX improvements on vacant areas to attract tenants, maximize rents and, subsequently, sustain returns to Unitholders.
Net Rental Income Net rental for Q3 2019 (adjusted for IFRIC 21) was CAD$6.10 million (EUR4.15 million), an increase over the adjusted net rental income for the same period in 2018 CAD$5.83 million (EUR3.84 million). The gain in adjusted net rental income is due to the contribution from the Trio property, partially offset by the sale of the Hanover asset.
In Q3 2019, net rental income (adjusted for IFRIC 21) for our Total Portfolio was CAD$9.12 million (EUR6.21 million), compared to CAD$9.00 (EUR5.92 million) for the same period in the previous year, this increase CAD$0.12 million being due to the net contribution from the Trio asset.
Financing Activity The REIT currently has a weighted average interest rate of 2.03% across the Total Portfolio. Following recent refinancing operations – Veronese (Courbevoie) and Metropolitain properties - the REIT has a debt level of 51.9% (50.7% net of cash), comfortably within its mandated threshold of 60%.
Rueil acquisition loan On July 25, 2019, the forward sale agreement for the underlying asset relating to the "Rueil development loan" was signed. The economics of this agreement confirm the budgetary assumptions applied by Management in valuing the profit participation component of the loan since 2018 and allow Management to anticipate future (2020) fund inflows following the reimbursement of the loan, as per the initial loan plan. Gain in fair value of CAD$1.4M have been recognised in relation to the profit participation component for the year to date, and CAD$6.5M since the inception of the loan.
Future sale of Vanves property Subsequent to quarter end, on October 30th, 2019, the REIT entered into an agreement to sell the Vanves property with a gross leasable area of 24,031 m2 (258,673 sq. ft.) located in Paris periphery. The net sale price is €95 million (CAD$137 million) (excluding closing costs), in excess of the carrying value of the property as of September 30th, 2019 by approximately 5%. The transaction is expected to close on or before December 26th, 2019.
ABOUT INOVALIS REAL ESTATE INVESTMENT TRUST
Inovalis Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been created for the purpose of acquiring and owning office properties primarily located in France and Germany but also opportunistically in other European countries where assets meet the REIT's investment criteria.
SOURCE Inovalis Real Estate Investment Trust
For further information: David Giraud, Chief Executive Officer, Inovalis Real Estate Investment Trust, Tel: +33 1 5643 3323, [email protected]; Khalil Hankach, Chief Financial Officer, Inovalis Real Estate Investment Trust, Tel: + 33 1 5643 3323, [email protected]