MISSISSAUGA, ON, Feb. 14, 2018 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to announce its 2017 annual financial results. These results have been prepared in accordance with International Financial Reporting Standards ("IFRS").
During the quarter ended December 31, 2017, the Trust completed an additional two development projects, increasing revenue generating gross leasable area by 26,200 square feet.
The two projects include retail intensification at one of the Trust's community strip centres and the remerchandising of space at one of the Trust's enclosed regional centres.
Both of these projects are fully leased and revenue generating.
During 2017, the Trust has completed 10 projects adding or reactivating over 290,000 square feet for leasable area. For the three months ended December 31, 2017, these projects contributed $1.2 million to net operating income.
The Trust's fully diluted FFO for the three months ended December 31, 2017, was $29.6 million ($0.43 per unit) versus $29.3 million ($0.44 per unit) for the same three months ended December 31, 2016. This represents a decrease of $0.3 million ($0.01 per unit).
Net operating income for the three months ended December 31, 2017, was $41.6 million, versus $42.7 million for the same three months ended December 31, 2016. This is a decrease of $1.1 million ($0.02/unit). This decrease was largely the result of temporary deal restructuring/abatements, increased vacancy costs and decreases in basic rent in a number of the Trust's enclosed regional centres ($1.2 million). During the quarter, the Trust decided not to proceed with the development of the former Everest College space at St. Laurent Centre. As a result, the Trust decreased the area under development and total gross leasable area relating to this space (32,000 square feet) and reclassified $0.7 million in property taxes that were capitalized in prior periods to property operating expenses. These decreases were offset by increased net operating income of $0.7 million derived from the Trust's development/remerchandising projects.
Interest expense was favourable $1.0 million ($0.01/unit), versus the same three months ended December 31, 2016, as a result of the lower interest rate on the convertible debentures issued in December 2016.
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). The Trust presents FFO in accordance with the Real Property Association of Canada white paper on funds from operations and adjusted funds from operations for IFRS issued February 2017. FFO is a non-GAAP measure that is widely accepted as a supplemental measure of financial performance for real estate entities. In accordance with such white paper, the Trust defines FFO as net income adjusted for fair value changes on real estate properties and gains/(losses) on the sale of real estate properties.
Financial Statements and Management's Discussion and Analysis
The Trust's Q4 2017 Consolidated Financial Statements and Management's Discussion and Analysis along with its 2016 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:
Date: Thursday, February 15, 2018 at 4:00 p.m. (ET)
Conference Call#: 647-427-7450 or 1-888-231-8191
Conference ID#: 8380308
About Morguard Real Estate Investment Trust
The Trust is a closed-end real estate investment trust, which owns a diversified portfolio of 48 retail, office and industrial income producing properties in Canada with a book value of $2.9 billion and approximately 8.6 million square feet of leasable space.
SOURCE Morguard Real Estate Investment Trust
For further information: 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