Partners Announces Results for the First Quarter of 2019 – Wire Real Estate

Partners Announces Results for the First Quarter of 2019




May 9, 2019

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BARRIE, Ontario,– Partners Real Estate Investment Trust (the “REIT,” or “Partners”) (TSX: PAR.UN) today announced its results for the three month period ended March 31, 2019 (the “first quarter”).

FIRST QUARTER 2019 HIGHLIGHTS

  • Comprehensive income of $2.9 million, an increase to income of $5.1 million when compared to the first quarter of 2018.  This improvement is primarily a result of $5.2 million of fair value losses in the prior year’s comparative period. 
  • Revenues from income producing properties of $9.2 million, a reduction of $3.8 million when compared to the first quarter of 2018. This reduction in revenue is primarily the result of the disposition of eleven properties during the Fall of 2018.
  • Same property NOI of $5.5 million, an improvement of $0.2 million when compared to the first quarter of 2018, due to positive leasing activity and higher average minimum rent.
  • All property NOI of $5.5 million, a reduction of $2.2 million when compared to the first quarter of 2018 due to the eleven properties sold during 2018, partially offset by increases to same property NOI.
  • FFO and AFFO per unit of $0.065 and $0.050, compared to $0.070 and $0.050, respectively, for the first quarter of 2018.
  • ACFO payout ratio of 90.5%, a reduction from the first quarter of 2018 ratio of 118.7%.
  • Occupancy of 96.9% as at March 31, 2019, unchanged from the end of 2018. 
  • As at March 31, 2019, the REIT had renewed a total of 163,986 square feet of leases that were set to expire during 2019, representing a renewal rate of 91% for 2019 with 9 months remaining in the year.
  • Debt to gross book value of 60.9%, a decrease from 62.1% at the end of 2018.
  • On May 8, 2019 the REIT closed the sale of its 11 properties located in Quebec.  The Quebec properties’ carrying value and disposition price are $178 million and after payment of related mortgages and transaction expenses the sale will result in net cash proceeds of approximately $64 million.  The board of trustees decided to return approximately $59 million to unitholders through a special distribution payment of $1.28 per unit.  As a consequence of these dispositions and the special distribution to unitholders, to reflect the smaller size of the REIT and the anticipated on-going cash requirements the regular monthly distribution of $0.015 per unit has been terminated.
  As at and for the three months ended  
  Mar 31, 2019
  Mar 31, 2018  
Revenues from income producing properties $   9,212,406   $   12,975,362  
Comprehensive income (loss)     2,864,491       (2,283,886 )
Comprehensive income (loss) per unit – basic     0.06       0.05  
NOI – same properties(1)     5,464,759       5,235,742  
NOI – all properties(1)     5,464,759       7,724,602  
FFO(1)     3,007,942       3,236,302  
FFO per unit(1)     0.06       0.07  
AFFO(1)     2,312,128       2,317,612  
AFFO per unit(1)     0.05       0.05  
ACFO(1)     2,312,128       2,431,240  
Distributions(2)     2,093,295       2,887,053  
Distributions per unit(2)     0.05       0.06  
ACFO distribution payout ratio(3)   90.5 %   118.7 %
Cash distributions(4)     2,073,585       2,640,883  
Cash distributions per unit(4)     0.05       0.06  

 

As at Mar 31, 2019
    Dec 31, 2018     Dec 31, 2017  
Total assets $   291,875,524   $   288,694,169   $   475,045,178  
Total debt(5)     178,603,542       180,009,332       283,331,535  
Total equity     100,434,618       99,663,422       183,347,418  
Weighted average units outstanding – basic     46,079,673       45,977,087       39,435,646  
Weighted average units outstanding – diluted     46,516,167       46,292,330       39,559,729  
Debt-to-gross book value including debentures(5)   60.9 %   62.1 %   59.4 %
Debt-to-gross book value excluding debentures(5)   60.9 %   62.1 %   57.8 %
Interest coverage ratio(6)     2.68       2.52       2.02  
Debt service coverage ratio(6)     1.50       1.44       1.25  
Mortgages weighted average effective interest rate(7)   3.99 %   3.99 %   4.10 %
Portfolio occupancy(8)   96.9 %   96.9 %   95.3 %
                   
  1. NOI – same properties and all properties, FFO, AFFO and ACFO are non-IFRS financial measures widely used in the real estate industry.
  2. Represents distributions to unitholders on an accrual basis.  Distributions are payable as at the end of the period in which they are declared by the Board of Trustees, and are paid on or around the 15th day of the following month.  Prior to November 1, 2018, distributions per unit include the 3% bonus units given to participants in the Distribution Reinvestment and the Deferred Unit Plan.  On May 8, 2019, the Board of Trustees announced the termination of the regular monthly distribution.
  3. ACFO distribution payout ratio is a non-IFRS financial measure that has a standardized meaning under RealPac.  It is calculated as total distributions as a percentage of ACFO (a new measure standardized by RealPac).  There is no directly comparable IFRS measure.
  4. Represents distributions on a cash basis, and as such, excludes the non-cash distributions of units issued under the Distribution Reinvestment and the Deferred Unit Plan.
  5. Debt-to-gross book value is a non-IFRS financial measure widely used in the real estate industry. Non-IFRS measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other issuers. There is no directly comparable IFRS measure.
  6. Interest coverage ratio and debt service coverage ratio are non-IFRS financial measures widely used in the real estate industry, calculated on a rolling four-quarter basis. Management considers the interest coverage and debt service coverage ratios to be valuable metrics in assessing the REIT’s ability to make contractual payments on debt. Non-IFRS measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other issuers. There are no directly comparable IFRS measures.
  7. Represents the weighted average effective interest rate for secured debt excluding debentures and credit facilities.
  8. Portfolio occupancy is calculated as economic occupancy, not physical occupancy. A unit is considered occupied once it is committed to a lease with a minimum one-year term.

“The results for the quarter reflect the sale of properties completed in fiscal 2018 and the sustained focus on reducing operating costs. We will continue this approach going forward as we strive to maximize value for our unitholders in a challenging environment,” stated Ian Ross, the REIT’s interim CEO.

Further Information

A more detailed analysis of the REIT’s financial results for the first quarter of 2019 are included in the REIT’s Management Discussion and Analysis and Condensed Consolidated Financial Statements, which have been filed on SEDAR and can be viewed at www.sedar.com or on the REITs’ website at www.partnersreit.com.

Conference Call

Partners will host a conference call at 8:30 AM Eastern on Thursday, May 9, 2019, at which time Partners’ management will both review the financial results and discuss the REIT’s strategic outlook.

Conference Dial-In Details

Toll Free (North America): 1-800-377-0758
Local: 416-340-2219

Instant Replay Details (Available until May 16, 2019)

Toll Free (North America): 1-800-408-3053
Passcode: 2442198#

A recording of the conference call will also be available via Partners’ website.

About Partners REIT
Partners REIT is a real estate investment trust focused on the management of a portfolio of 23 retail and mixed-use community and neighbourhood shopping centres. These properties are located in both primary and secondary markets across Manitoba, Ontario, and Quebec, and comprise a total of approximately 1.7 million square feet of leasable space.

Disclaimer
Certain statements included in this press release constitute forward-looking statements, including, but not limited to, those identified by the expressions “expect,” “will” and similar expressions to the extent they relate to Partners REIT. The forward- looking statements are not historical facts but reflect Partners REIT’s current expectations regarding future results or events. These forward looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including access to capital, regulatory approvals, intended acquisitions and general economic and industry conditions. Although Partners REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein.

See Website: http://www.partnersreit.com
Contact Information:
Partners REIT Investor Relations 1 (844) 474-9620 ext. 401 investor.relations@partnersreit.com C. Ian Ross Chairman of the Board and Interim Chief Executive Officer (416) 855-3313 ext. 501 Derrick West, CPA (CA) Chief Financial Officer and Corporate Secretary (416) 855-3313 ext. 503

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