MISSISSAUGA, ON, Nov. 2, 2016 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to announce its financial results for the three months and nine months ended September 30, 2016 ("Q3"). These results have been prepared in accordance with International Financial Reporting Standards ("IFRS").
The Trust's fully diluted funds from operations ("FFO") for the three months ended September 30, 2016, was $26.0 million or $0.39 per unit. This is a decrease of $0.01 per unit over the same period in 2015.
Total net operating income ("NOI") for the three months ended September 30, 2016, was $38.2 million, a decrease of $1.8 million over the same period in 2015. The Trust's same asset NOI of $38.7 million for the three months ended September 30, 2016, is unfavourable by $1.3 million compared to the same period in 2015.
Decreases in the Trust's same asset NOI derive largely from the retail portfolio, where same asset NOI is $0.9 million lower for the three months ended September 30, 2016, than for the comparable period ended September 30, 2015. The decrease reflects the softening of the Alberta market, coupled with an overall softening of fashion focused centres. These two market challenges resulted in early terminations of approximately 38,000 square feet.
The Trust's office portfolio same asset NOI is unfavourable by $0.4 million compared to the same three months ended September 30, 2015. This decrease is the result of temporary vacancy on space currently being fixtured for National Bank. National Bank is scheduled to take occupancy in January 2017.
Overall, during the quarter, the Trust completed in excess of 300,000 square feet of leasing, excluding area under development.
During the quarter, the Trust advanced leasing conversations for space associated with 496,000 square feet of area under development. To date, the Trust has deal commitments representing 40% of the total area under development, with advanced discussions on an additional 20%. The Trust has over $100 million of projects approved and underway. These developments will increase FFO and secure a more stable and diversified tenant base.
At September 30, 2016, the Trust's debt consisted of $1.1 billion of fixed-rate debt with weighted average interest rate of 4.1% and weighted average term to maturity of 4.8 years, $148.6 million of 4.85% fixed-rate convertible debentures and $6.6 million utilization of the operating line of credit. The Trust has a debt to total assets ratio of 44.3%.
Net Operating Income, Funds from Operations
This press release and accompanying financial information make reference to net operating income and funds from operations on a total and per unit basis. Net operating income is defined as income from property operations after operating expenses have been deducted, but prior to deducting interest expense, general and administrative expenses and fair value gains/(losses). Funds from operations is defined as net income prior to extraordinary items, valuation adjustments, and certain other non-cash items, if any. Funds from operations is not a term defined under IFRS and may not be comparable to similar measures used by other Trusts.
Financial Statements and Management's Discussion and Analysis
The Trust's Q3 2016 Condensed Consolidated Financial Statements and Management's Discussion and Analysis along with its 2015 Annual Report are available on the Trust's website at www.morguard.com and have been filed with SEDAR at www.sedar.com
Conference Call Details:
Thursday, November 3, 2016 at 4:00 p.m. (ET)
647-427-7450 or 1-888-231-8191
About Morguard Real Estate Investment Trust
The Trust is a closed-end real estate investment trust, which owns a diversified portfolio of 49 retail, office and industrial income producing properties in Canada with a book value of $2.9 billion and approximately 8.7 million square feet of leasable space.
SOURCE Morguard Real Estate Investment Trust
For further information: please contact: Morguard Real Estate Investment Trust, K. Rai Sahi, President and Chief Executive Officer, T 905-281-4800; Pamela McLean, Chief Financial Officer, T 905-281-4800