Whiterock REIT Announces Strong 2010 Second Quarter Results
TORONTO, Aug. 3 /CNW/ - Whiterock Real Estate Investment Trust ("Whiterock") a growth oriented REIT with a significant presence in major markets and a high quality long-term leased revenue stream, today announced financial results for the three and six months ended June 30, 2010. 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, 2010. These will be available on Whiterock's website at www.whiterockreit.ca.
"We are pleased with the strong progress made in all areas this quarter and continue to look forward to reporting further progress throughout the remainder of 2010," said Whiterock CEO Jason Underwood.
HIGHLIGHTS - Second Quarter ended June 30, 2010
- Increasing FFO - FFO per unit was $0.43 for the three months ended
June 30, 2010, up 9.3% year over year. This represents a 91.1% FFO
cash payout ratio.
- Growing AFFO - AFFO per unit was $0.36 for the three months ended
June 30, 2010, a second consecutive quarterly increase and up 10.3%
from June 2009's AFFO per unit of $0.33 excluding non-recurring gains
on disposition.
- Same Property NOI Growth - On a cash basis, same property NOI was
$8.6 million, up 4.3% year over year and 2.8% from the first quarter
of 2010.
- Decreasing Leverage - Debt to gross book value leverage ratio
substantially improved to 60.3% at June 30, 2010 from 71.1% at June
30, 2009 and from 64.1% at March 31, 2010.
- Rising Occupancy - 95.9% occupancy rate at June 30, 2010, a 63 basis
point increase as compared to March 31, 2010.
- Growing Portfolio in Major Markets - Whiterock has acquired an
interest in $403 million of owned or long-term leased assets in 2010,
95% of which are in the Greater Toronto Area (GTA).
OUTLOOK
In the second quarter of 2010, Whiterock has again increased its AFFO per unit (to $1.45 annualized) as a result of accretive Class A office property acquisitions, primarily in the GTA. The Airway Centre acquisitions on June 18, 2010 added $0.02 annualized AFFO per unit in the second quarter and are expected to add an additional $0.08 annualized when they contribute for a full quarter. The Regina flex office property acquisitions added $0.02 to annualized AFFO in the second quarter and are expected to add an additional $0.01 annualized in the third quarter. Third party property management which began on July 19, 2010 is also expected to add approximately $0.03 annualized beginning in the third quarter.
FINANCIAL HIGHLIGHTS
Three months ended June 30,
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(in $000's except per unit data) 2010 2009
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Total revenue - continuing operations 16,760 14,730
Property net operating income ("NOI")
- continuing operations (accrual basis) 9,558 8,996
Funds from operations (FFO) 6,017 3,403
FFO per Unit
- basic 0.43 0.39
- diluted 0.41 0.39
Adjusted funds from operations (AFFO) 5,122 3,188
AFFO per Unit
- basic(1) 0.36 0.37
- diluted 0.35 0.35
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(1) June 2009 AFFO included $0.3 million of gains on disposition of
income properties. Excluding this gain, June 2009 AFFO was $0.33 per
unit.
Balance sheet highlights for Whiterock as at June 30, 2010 and December 31, 2009 are as follows:
June 30, December 31,
(in $000's) 2010 2009
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Investment in real estate assets - wholly owned 475,185 436,638
Investment in real estate asets - equity
accounted(1) 62,487 17,741
Investment in real estate assets - long-term
leased(2) 24,933 -
Mortgages payable and facilities 287,994 266,482
Convertible debentures (face value) 63,361 75,097
Unitholders' equity 159,288 77,939
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(1) Whiterock's net investment in its co-ownership share of $413 million
of real estate assets at June 30, 2010 (December 31, 2009 - $164
million) net of debt, all accounted for using the equity method.
(2) Includes prepaid rent related to the $117 million Airway Centre 2-4
under a 30 year land lease.
Selected financial ratios for Whiterock as at, and for the three months ended, June 30, 2010 and 2009 are as follows:
June 30, June 30,
2010 2009
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FFO payout ratio(1) 99% 108%
FFO cash payout ratio(2) 91% 101%
Occupancy level 95.9% 97.0%
Interest coverage ratio(3) 1.8x 1.7x
Weighted average fixed mortgage rate 5.7% 5.7%
Weighted average debenture rate 6.7% 6.8%
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(1) FFO payout ratio is calculated as distributions divided by FFO for
the three months ended June 30, 2010 and 2009
(2) FFO cash payout ratio is calculated as cash distributions divided by
FFO for the three months ended June 30, 2010 and 2009.
(3) 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 and other
income.
FFO, AFFO and NOI 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, AFFO and NOI may be different from methods used by other REITs or corporations. A description of Whiterock's calculation of FFO, AFFO and NOI is included in Whiterock's Management's Discussion and Analysis ("MD&A") for the three and six months ended June 30, 2010.
Whiterock's consolidated Financial Statements and MD&A for the three and six months ended June 30, 2010 are posted on Whiterock's website. Readers are directed to these documents for a more detailed discussion of Whiterock's results.
CONFERENCE CALL
Whiterock invites you to participate in its conference call with senior management on Tuesday, August 3, 2010 at 11:00 a.m. E.D.T., to discuss the REIT's results and achievements for the three and six months ended June 30, 2010. A presentation to accompany management's comments during the call will be available on Whiterock's website. To view it, please go to www.whiterockreit.ca and click on the link for Quarterly Financial Statements on the homepage or access it directly using www.whiterockreit.ca/financial_reports.php.
You may participate in the live conference by calling 416-800-1066 or toll free at 1-866-212-4491. 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 and available for approximately 90 days after the call.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of applicable securities legislation. These forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect" "estimate", "anticipate", "intend", "believe" or "continue", the negative forms thereof and similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. These statements are not guarantees of future events or performance and, by their nature, are based on Whiterock's estimates and assumptions, which are subject to known and unknown risks, uncertainties and other factors that may cause the actual events, results or prospects to be materially different from those expressed or implied herein. Readers are cautioned that a number of factors, including those discussed in the section entitled "Risk Factors" in Whiterock's Annual Information Form which can be obtained at www.sedar.com, could cause actual events, results or prospects to differ materially from those stated or implied. These factors should be considered carefully, and a reader should not place undue reliance on forward-looking statements, as there can be no assurance that actual events, results or prospects will be consistent with such statements. In particular, but without limitation, there can be no assurance that Whiterock will be to able to increase its AFFO. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a less robust leasing environment than has been seen for the last several years; relatively stable interest costs; relatively stable capitalization rates; and more limited but available access to equity and debt capital markets to fund, at acceptable costs, Whiterock's growth plans, and to enable Whiterock to refinance its debts as they mature. 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: www.whiterockreit.ca, Frank Bucys, CFO, 416-907-4864; Jennifer Kosloski, 416-979-3026
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