FREDERICTON, May 10, 2018 /CNW/ - Plaza Retail REIT (TSX:
PLZ.UN) ("Plaza" or the "REIT") today announced its results for the
three months ended March 31,
2018.
Michael Zakuta, President and CEO
said, "Plaza continues to be opportunistic and add value through
development. Our pipeline of deals is solid and will contribute to
our growth as projects come on-line in late 2018 and 2019. Our
tenant base of value and necessity retailers continues to perform
well."
|
Financial Results
Summary
|
(CAD$000s, except
percentages, per unit amounts
and coverage
ratios)
|
Three Months
Ended
Mar 31,
2018
|
Three Months
Ended
Mar 31,
2017
|
Change
|
FFO
1
|
$8,182
|
$8,253
|
-0.9%
|
FFO per
unit
|
$0.079
|
$0.081
|
-2.5%
|
FFO payout
ratio
|
88.1%
|
83.7%
|
+5.3%
|
|
|
|
|
AFFO
1
|
$7,434
|
$7,772
|
-4.3%
|
AFFO per
unit
|
$0.072
|
$0.076
|
-5.3%
|
AFFO payout
ratio
|
97.0%
|
88.9%
|
+9.1%
|
|
|
|
|
Profit (loss) and
total comprehensive income (loss)
|
$(3,166)
|
$279
|
-1,234.8%
|
|
|
|
|
Total property rental
revenue
|
$25,966
|
$25,340
|
+2.5%
|
Total property
operating expenses
|
$10,606
|
$10,027
|
+5.8%
|
Total NOI
|
$15,360
|
$15,313
|
+0.3%
|
|
|
|
|
Same-asset rental
revenue
|
$22,731
|
$22,764
|
-0.1%
|
Same-asset operating
expenses
|
$8,224
|
$8,053
|
+2.1%
|
Same-asset NOI
1
|
$14,507
|
$14,711
|
-1.4%
|
|
|
|
|
Committed
occupancy
|
95.1%
|
96.2%
|
-1.1%
|
Same-asset committed
occupancy
|
95.0%
|
96.3%
|
-1.3%
|
|
|
|
|
Distributions per
unit
|
$0.07
|
$0.0675
|
+3.7%
|
Total distributions
to unitholders
|
$7,210
|
$6,906
|
+4.4%
|
|
|
|
|
Interest coverage
ratio
|
2.22 x
|
2.28 x
|
-2.6%
|
Debt coverage
ratio
|
1.58 x
|
1.61 x
|
-1.9%
|
Debt to gross assets
(excluding converts)
|
49.4%
|
48.4%
|
+2.1%
|
Debt to gross assets
(including converts)
|
54.3%
|
52.2%
|
+4.0%
|
|
|
|
|
IFRS capitalization
rate (for valuing investment properties)
|
7.03%
|
7.03%
|
- %
|
|
|
|
1
Refer to "Non-IFRS Financial Measures" below for further
explanations.
|
Quarter over Quarter Financial Highlights
- For the three months ended March 31,
2018, funds from operations ("FFO") per unit decreased to
$0.079, down 2.5% from $0.081 for the same period in 2017 and adjusted
funds from operations ("AFFO") per unit was $0.072, down 5.3% for the same period in 2017.
Positively impacting FFO and AFFO per unit were (i) growth in net
property operating income from
developments/redevelopments/acquisitions (net of property
dispositions), and (ii) higher other income due to an increase in
development and leasing fees earned from co-owned properties. These
were more than offset by (i) a decrease in same-asset net property
operating income partly due to vacancies from two lease buyouts
completed in 2017, and (ii) higher interest expense mainly due to
timing of the issue of the Series E convertible debentures versus
the redemption of the Series D convertible debentures, as well as
early mortgage discharge fees paid. AFFO per unit was further
impacted by higher maintenance capital expenditures and leasing
costs relating to new tenancies. Excluding the non-recurring one
month overlap of interest on the convertible debentures, the impact
of the 2017 lease buyouts and the early mortgage discharge fees
paid, FFO per unit would have been $0.084, up 3.7% from the prior year and AFFO per
unit would have been $0.077, up 1.3%
from the prior year;
- Profit (loss) and total comprehensive income (loss) for the
current quarter was a loss of $3.2
million compared to a profit of $279
thousand in the prior year. Profits were largely impacted
by: (i) debenture issuance costs of $2.1
million for the Series E convertible debentures, which are
fully expensed for accounting purposes; and (ii) a decrease in
share of profit of associates from equity accounted investments of
$2.1 million mainly relating to the
non-cash fair value adjustment to the underlying investment
properties and a fair value loss on the disposal of land at an
underlying investment property;
- Net property operating income ("NOI") was $15.4 million, up 0.3% from $15.3 million in the same period in 2017. Growth
from developments/redevelopments and acquisitions were partly
offset by sales of properties and a decrease in same-asset NOI;
and
- Same-asset NOI was $14.5 million
compared to $14.7 million for the
same period in 2017, down 1.4%, mainly due to $150 thousand bad debt expense recorded in the
quarter due to a tenant going into creditor protection, as well as
vacancies from two lease buyouts concluded in 2017 which negatively
impact same-asset NOI by $180
thousand and vacancies at the enclosed malls. These were
partly offset by new lease up and contractual rent increases in the
portfolio.
Leasing and Occupancy
- Same-asset committed occupancy and total committed occupancy
were 95.0% and 95.1%, respectively, at March
31, 2018, compared to 96.3% and 96.2%, respectively, at
March 31, 2017. The two significant
lease buyouts completed in 2017 negatively impacted occupancy, as
well as vacancies at the enclosed malls.
Further Information
A more detailed analysis of the
REIT's financial and operating results is included in the REIT's
Management's Discussion and Analysis and Consolidated Financial
Statements, which have been filed on SEDAR and can be viewed at
www.sedar.com or on the REIT's website at www.plaza.ca.
Conference Call
Michael
Zakuta, President and CEO, and Floriana Cipollone, CFO,
will host a conference call for the investment community on
Friday, May 11,
2018 at 2:00 p.m. ET (3:00
p.m. AT). The call-in numbers for participants are
647-427-7450 or 888-231-8191.
A replay of the call will be available until Friday, May
18, 2018. To access the replay, dial 416-849-0833 or 855-859-2056
(Passcode: 6194928). The audio replay will also be available for
download on the REIT's website for 90 days following the conference
call.
About Plaza
Plaza is an open-ended real estate
investment trust and is a leading retail property owner and
developer, focused on Ontario,
Quebec and Atlantic Canada.
Plaza's portfolio at March 31, 2018
includes interests in 297 properties totaling approximately 8.1
million square feet across Canada
and additional lands held for development. Plaza's properties
include a mix of strip plazas, stand-alone small box retail outlets
and enclosed shopping centres, anchored by approximately 90%
national tenants. For more information, please
visit www.plaza.ca.
Non-IFRS Financial Measures
This press release
contains certain non-IFRS financial measures including FFO, AFFO
and same-asset NOI. These measures are commonly used by
entities in the real estate industry as useful metrics for
measuring performance. However, they do not have any
standardized meaning prescribed by IFRS and are not necessarily
comparable to similar measures presented by other publicly traded
entities. These measures should be considered as supplemental
in nature and not as a substitute for related financial information
prepared in accordance with IFRS. Please refer to the REIT's
Management's Discussion and Analysis for a reconciliation of these
non-IFRS measures to standardized IFRS measures.
Forward Looking Information
This news release
contains forward looking statements relating to our operations and
the environment in which we operate. An example of a
forward looking statement in this press release is that Plaza's
deal pipeline will contribute to growth as anticipated.
Forward looking statements are not future guarantees of future
performance and involve risks and uncertainties that are difficult
to control or predict. Therefore, actual outcomes and results
may differ materially from those expressed in or implied by these
forward looking statements. Although the forward looking
statements contained in this press release are based upon
information currently available to management and what management
believes are reasonable expectations and assumptions, there can be
no assurances that forward looking statements will prove to be
accurate. Readers, therefore, should not place undue reliance on
any such forward looking statements. Forward looking
statements are based on a number of expectations and assumptions
made in light of management's experience and perceptions of
historical trends and current conditions including that projects
will come on-line within the timeframes anticipated. A
forward looking statement speaks only as of the date on which such
statement is made. We undertake no obligation to publicly
update any such statement, to reflect new information or the
occurrence of future events or circumstances, except for
forward-looking information disclosed in prior disclosures which,
in light of intervening events, requires further explanation to
avoid being misleading. More detailed information about risks
and uncertainties that could affect Plaza is described in Plaza's
Annual Information Form for the year ended December 31, 2017 and Management's Discussion and
Analysis for the period ended March 31,
2018 which can be obtained on SEDAR at
www.sedar.com.
The TSX does not accept responsibility for the adequacy or
accuracy of this release.
SOURCE Plaza Retail REIT