Temple REIT reports 2007 second quarter results and announces an increase in cash distributions



    WINNIPEG, Aug. 28 /CNW/ - Temple Real Estate Investment Trust ("TREIT")
(TSX Venture: TR.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 TREIT 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 TREIT website at www.treit.ca or
the SEDAR website at www.sedar.com.

    
    2007 SECOND QUARTER HIGHLIGHTS

    Acquisition and Development

    -   Invested $68.5 Million in the acquisition of four hotel properties,
        representing 333 rooms/suites.
    -   Quarter ending portfolio consists of seven hotels properties,
        comprised of 742 rooms/suites.

    Financial

    Second quarter of 2007, compared to first quarter of 2007:

    -   Operating income of $4.8 Million, representing an increase of
        $3.7 Million ($0.337 per unit)

    -   Net income of $1.4 Million ($0.161 per unit), representing an
        increase of $1.2 Million ($0.122 per unit)

    -   Cash from operating activities of $3 Million, representing an
        increase of $2.8 Million ($0.307 per unit)

    -   Distributable income of $2.6 Million ($0.293 per unit), representing
        an increase of 2.1 Million ($0.209 per unit)

    -   Average occupancy level increased to 79.1%, compared to 73.5%

    -   Average daily room rate (ADR) increased to $171.11, compared to
        $147.53
    -   Revenue per available room (RevPar) increased to $135.19, compared to
        $108.39

    -   Operating profit margin increased to 50%, compared to 32.5%

    Capital Structure

    -   Financed $50.7 Million of mortgage debt.

    -   Weighted average interest rate on mortgage debt of 6.97% at
        June 30, 2007.

    -   Mortgage loan debt to estimated current property value ratio of 60%
        at June 30, 2007.


    Financial and Operating Statistics
    -------------------------------------------------------------------------
                                            Three Months       Three Months
                                                Ended              Ended
                                           June 30, 2007      March 31, 2007
                                      ---------------------------------------

    CASH DISTRIBUTIONS
    Amount - total                            $1,326,984            $966,676
           - per unit                              $0.15               $0.15
                                       ($0.60 annualized)  ($0.60 annualized)

    KEY PERFORMANCE INDICATORS
    Operations
      Occupancy                                   79.08%              73.50%
      ADR                                        $171.11             $147.53
      RevPar                                     $135.19             $108.39
      Operating profit margin                     50.01%               32.5%

    Operating Results
      Total revenue                           $9,522,466          $3,278,709
      Operating income                        $4,761,400          $1,066,867
      Net income                              $1,421,241            $206,544

    Cash Flows
      Cash flow from operating activities     $3,015,620            $180,100
      Distributable income                    $2,589,705            $445,610

    Financing
      Weighted average interest rate of
       long-term debt                             6.970%              6.505%

    PER UNIT AMOUNTS                      Basic  Diluted      Basic  Diluted
                                          -----  -------      -----  -------

    Net income                           $0.161   $0.157     $0.039   $0.038
    Distributable income                 $0.293   $0.223     $0.084   $0.083



    Analysis of Net Earnings

                    Six Months Ended    Three Months Ended

                        June 30,      June 30,      March 31,      Increase
                          2007          2007          2007        (Decrease)
                     -------------- ------------- ------------- -------------

    Hotel revenue
      Room            $  9,548,564  $  7,698,841  $  1,849,723  $  5,849,118
      Other              2,421,303     1,324,070     1,097,233       226,837
                     -------------- ------------- ------------- -------------

        Total hotel
         revenue        11,969,867     9,022,911     2,946,956     6,075,955

    Interest and
     other income          831,308       499,555       331,753       167,802
                     -------------- ------------- ------------- -------------

        Total revenue   12,801,175     9,522,466     3,278,709     6,243,757

    Operating
     expenses            6,972,908     4,761,066     2,211,842     2,549,224
                     -------------- ------------- ------------- -------------

    Operating income     5,828,267     4,761,400     1,066,867     3,694,533

    Finance expense      2,654,749     2,153,294       501,455     1,651,839
    Trust expense          308,766       187,331       121,435        65,896
    Amortization         1,083,414       908,668       174,746       733,922
    Provision for
     taxes                 153,553        90,866        62,687        28,179
                     -------------- ------------- ------------- -------------

    Net income        $  1,627,785   $ 1,421,241  $    206,544  $  1,214,697
                     -------------- ------------- ------------- -------------
                     -------------- ------------- ------------- -------------
    

    The operating results for the second quarter of 2007 exceeded
expectations and reflect significant progress in terms of attaining the
long-term growth objectives of TREIT. During the period from March 23, 2007 to
April 30, 2007, the TREIT acquired six additional hotels, at a combined
purchase price of $138 Million and encompassing 543 rooms. The equity
component of the hotel acquisitions was primarily funded from the proceeds of
the $48 Million unit and convertible denture offering which was completed
during the first quarter of 2007.
    The additional property acquisitions during March and April of 2007 have
resulted in a significant improvement in operating results in the second
quarter of 2007, compared to the first quarter of the year. During the second
quarter of 2007, net income increased by $1.2 Million or $0.122 per unit,
compared to the first quarter of the year, while operating income increased by
$3.7 Million or $0.337 per unit and cash from operating activities increased
by $2.8 Million or $0.307 per unit.
    Distributable income increased by $2.1 Million or $0.209 per unit during
the second quarter of 2007, compared to the first quarter. Distributable
income amounted to $2.6 Million ($0.293 per unit) and $3 Million ($0.428 per
unit) for the three-month and six-month periods, respectively while the total
distributions for the same periods were $1,326,984 and $2,293,660,
respectively. The distributions represent a payout ratio of 51.2% and 75.6%
for the three-month and six-month periods, respectively.
    Given the favourable operating results, TREIT also announced today that
that the board of trustees has approved an increase in its monthly
distributions to unitholders from $0.05 per month, or $0.60 annually, to $0.06
per month, or $0.72 annually, representing a 20% increase. Payment of the
first distribution at the increased amount will be made on October 15, 2007 to
unitholders of record as of September 30, 2007.
    In conclusion, TREIT is building a foundation for long-term growth by
focusing on hotel acquisitions, which offer the security of cash flow and
potential for capital appreciation. This has been exemplified by the
favourable operating results, which have been achieved by all of the hotel
properties in the TREIT portfolio in the second quarter of 2007. Overall, the
occupancy level for the entire portfolio was 79.1% during the second quarter
of 2007, while the average room rate was $171.11, RevPar was $135.19 and
operating profit margin was 50%. During the third quarter of 2007, TREIT is
expected to achieve continued growth in income and cash flows, as a result of
the inclusion of the Merit and Nomad hotel properties for a full three-month
period.

    TREIT is a real estate investment trust, which is listed on the
TSX Venture Exchange under the symbol TR.UN. The objective of TREIT is to
provide Unitholders with stable cash distributions from investment in a
geographically diversified Canadian portfolio of hotel properties and related
assets. There are currently 8,848,920 trust units outstanding. For further
information on TREIT, please visit our website at www.treit.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 TSX Venture 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, Chief Executive Officer, or
Gino Romagnoli, Investor Relations, Tel: (204) 475-9090, Fax: (204) 452-5505,
Email: info@treit.ca


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