Whiterock REIT Announces Q2 2008 Results, Posts Record FFO and AFFO per Unit

    TORONTO, Aug. 14 /CNW/ - Whiterock Real Estate Investment Trust
("Whiterock") today announced financial results for the three and six months
ended June 30, 2008. The following comments and highlights should be read in
conjunction with the unaudited consolidated financial statements and
management's discussion and analysis for the three and six months ended
June 30, 2008. These will be available on Whiterock's website at

    HIGHLIGHTS - June 30, 2008

    -   Record Quarterly FFO - FFO increased 32% to $3.5 million for the
        three months ended June 30, 2008. FFO per unit (basic) increased 22%
        to 33.0 cents per unit in the same period. This represents an 85% FFO
        payout ratio.

    -   Record Quarterly AFFO - AFFO increased 37% to $2.9 million for the
        three months ended June 30, 2008. AFFO per unit (basic) increased 27%
        to 27.3 cents per unit in the same period.

    -   Solid Rental Rate Increases - Increases on year-to-date lease
        renewals averaged approximately 18%.

    -   Future Rental Rate Growth, Western Canada - 58% of lease expirations
        through 2010 are in Saskatchewan and Alberta. Lease rollover is
        currently estimated to add 13 cents per unit to annualized AFFO by
        the end of 2010.

    -   Same Property Growth - Property operating income for the three months
        ended June 30, 2008 increased substantially, by 5.9%, for the same
        properties (cash basis) from the prior year comparative period.

    -   New Acquisitions - Subsequent to June 30, 2008, Whiterock acquired
        for $79.8 million before closing costs, eight commercial properties
        in Calgary and Edmonton, Alberta totaling 341,631 square feet. The
        properties are expected to add 3 cents per unit to AFFO and 8 cents
        per unit to FFO. Whiterock also acquired one 36,927 square foot
        office property in Chatham, Ontario and has agreed to acquire one
        27,428 square foot office property in Halifax, Nova Scotia, for a
        total of $10.1 million before closing costs. These two properties
        have a combined cap rate of approximately 8.8%.

    -   Yield - Distribution yield of 11.2% annualized, based on the
        current distribution level and the August 13, 2008 Unit closing
        price of $10.00.

    -   Investment Grade Tenants on Long-Term Leases - 69% of revenues were
        from government and other investment grade tenants. Average lease
        term of the portfolio was 8.6 years.

    -   Long-Term Fixed Rate Debt - Average 8.0 year term for mortgage debt
        at a weighted average interest rate of 5.4% with 100% at fixed rates.

    -   Continued Deleveraging - $1.3 million of convertible debentures
        converted to equity in the three months ended June 30, 2008.

    -   Geographically Balanced Portfolio - At June 30, 2008, 21% of the
        portfolio's property operating income is in Saskatchewan, 28% in
        Ontario, 36% in Quebec and 15% in Atlantic Canada.

    "Our record results this quarter continue to demonstrate the strength of
our portfolio. Our second quarter same property growth is 5.9% on a cash
basis. Our FFO payout ratio is now 85% and our recurring AFFO per unit
increased 27% compared to the same period last year to an annualized rate of
$1.09 per unit," said Whiterock CEO Jason Underwood. "We are also extremely
pleased with our recent Alberta acquisitions which are immediately accretive
to our unitholders. The resulting portfolio is more balanced geographically
with 32% located in the high growth Alberta and Saskatchewan markets. This
strong internal and external growth, combined with the security provided by
our existing long term high credit tenants, continues to make Whiterock a
solid investment positioned to outperform."

    (including discontinued operations, except as noted)

                                       Three months ended   Six months ended
                                             June 30,            June 30,
                                      ------------------- -------------------
    (in $000's except per
     Unit data)(1)                      2008      2007      2008      2007

    Total revenue - continuing
     operations                         12,861    11,938    25,869    23,904
    Property operating income
      - continuing operations            7,756     7,249    15,430    14,317

    Funds from operations (FFO)          3,535     2,682     6,890     5,481
    FFO per Unit
      - basic                             0.33      0.27      0.65      0.55
      - diluted                           0.32      0.27      0.64      0.54

    Adjusted funds from operations
     (AFFO)                              2,923     2,133     5,707     4,306
    AFFO per Unit
      - basic                             0.27      0.21      0.54      0.43
      - diluted                           0.26      0.21      0.53      0.42
    (1) FFO and AFFO exclude non-recurring costs associated with reviewing
        strategic alternatives in 2007.

    Balance sheet highlights for Whiterock as at June 30, 2008 and
December 31, 2007 are as follows:

    (in $000's)                            June 30, 2008   December 31, 2007

    Investment in real estate assets(1)          349,817             355,549
    Mortgages payable and facilities             216,857             224,599
    Convertible debentures (face value)           44,010              46,986
    Unitholders' equity                           73,575              74,862
    (1) Includes $7.3 million of mortgages receivable secured by real estate

    Selected financial ratios for Whiterock as at, and for the six months
ended, June 30, 2008 and 2007 are as follows:

                                           June 30, 2008       June 30, 2007
    Weighted average fixed mortgage rate            5.4%                5.4%
    Weighted average debenture rate                 7.0%                7.1%
    Interest coverage ratio(1)                       1.9                 1.6
    Occupancy level(2)                             98.5%               98.7%
    FFO payout ratio(3)                              85%                104%
    (1) Interest coverage for the period is calculated based on property
        operating income less G&A, divided by interest expense (including
        debentures and financing fee amortization) net of interest income.
    (2) Includes leases executed to date.
    (3) FFO payout ratio is calculated as Q2 distributions divided by Q2 FFO.

    In the three and six months ended June 30, 2008, Whiterock significantly
improved its FFO, AFFO, FFO per unit, AFFO per unit, property operating income
and interest coverage ratio while reducing its payout ratio compared to the
prior year.
    The improvement in Whiterock's financial results reflects management
initiatives to improve income from the property portfolio, to reduce general
and administrative expense, and to undertake financial measures such as
reductions in the amount of excess cash held and improving credit facility
terms as well as the impact of accretive acquisitions.
    FFO and AFFO are supplemental non-GAAP financial measures used by the
real estate industry to measure and compare the operating performance of real
estate organizations. Whiterock's method of calculating FFO and AFFO may be
different from methods used by other REITs or corporations. A description of
Whiterock's calculation of FFO and AFFO is included in Whiterock's
Management's Discussion and Analysis for the three and six months ended
June 30, 2008.


    Management expects that further increases in AFFO per unit in 2008 and
2009 will result from acquisitions closing in the third quarter of 2008,
anticipated new leasing and renewals, contractual rent increases and continued
operational improvements. At current market rates, lease rollover is estimated
to add approximately 13 cents per unit to annualized AFFO by the end of 2010.


    Whiterock invites you to participate in its live conference call with
senior management on Thursday August 14, 2008 at 3.00 p.m. E.D.T., to discuss
the REIT's results and achievements for the three and six months ended
June 30, 2008.
    You may participate in the live conference call toll free at
1-888-373-5705 and enter the passcode '880341' followed by the number sign
when prompted by the operator. To ensure your participation, please call five
minutes prior to the scheduled start of the call. The call will be archived on
Whiterock's website.

    Forward Looking Statements

    This news release contains "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform Act of 1995
and applicable Canadian securities legislation. Forward-looking statements
include, but are not limited to, statements with respect to financial
performance, sale-leaseback opportunities, proposed acquisitions and equity or
debt offerings, new markets for growth, financial position, comparable
commercial REITs and proposed acquisitions. Generally, these forward-looking
statements can be identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not anticipate",
or "believes", or variations of such words and phrases or state that certain
actions, events or results "may", "could", "would", "might" or "will be
taken", "occur" or "be achieved".
    Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, level of
activity, performance or achievements of Whiterock to be materially different
from those expressed or implied by such forward-looking statements, including
but not limited to: the risks related to the market for Whiterock's
securities, the general risks associated with real property ownership and
acquisition, that future accretive acquisition opportunities will be
identified and/or completed by Whiterock, lease maturities, risk management,
liquidity, debt financing, credit risk, competition, general uninsured losses,
interest rate fluctuations, environmental matters, restrictions on redemptions
of outstanding Whiterock securities, lack of availability of growth
opportunities, diversification, reliance on anchor or single tenant
properties, potential Unitholder liability, potential conflicts of interest,
the availability of sufficient cash flow, fluctuations in cash distributions,
the market price of Whiterock's units, the failure to obtain additional
financing, dilution, reliance on key personnel, changes in legislation,
failure to obtain or maintain mutual fund trust status and delays in obtaining
governmental approvals or financing as well as those additional factors
discussed in the section entitled "Risk Factors" in Whiterock's Annual
Information Form which can be obtained at www.sedar.com. In particular, but
without limitation, there is no assurance that Whiterock will be able to
increase its AFFO as anticipated. Except as required by law, Whiterock does
not undertake, and specifically disclaims, any obligation to update or revise
any forward-looking statements, whether as a result of new information, future
developments or otherwise.

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

    %SEDAR: 00022234E

For further information:

For further information: www.whiterockreit.ca; Jason Underwood, (416)
907-4861; Paul Simcox, (416) 907-4862; Frank Bucys, CFO, (416) 907-4864

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