WINNIPEG, MB, May 23, 2024
/CNW/ - Lanesborough Real Estate Investment Trust ("LREIT") (TSXV:
LRT.UN) today reported its operating results for the quarter ended
March 31, 2024. The following
comments in regard to the financial position and operating results
of LREIT should be read in conjunction with interim management's
discussion & analysis – quarterly highlights and the interim
financial statements for the quarter ended March 31, 2024, which may be obtained from the
SEDAR+ website at www.sedarplus.ca.
ANALYSIS OF OPERATING RESULTS
Analysis of Income (Loss) and Comprehensive Income
(Loss)
|
Three Months Ended
March 31
|
Increase
(Decrease)
in Income
|
|
2024
|
2023
|
Amount
|
%
|
|
|
|
|
|
|
Rentals from investment
properties
|
$ 2,685,698
|
$ 3,481,753
|
$ (796,055)
|
(23) %
|
|
Rental loss insurance
proceeds (reversal of proceeds)
|
-
|
(65,012)
|
65,012
|
100 %
|
|
Property operating
costs
|
(1,884,197)
|
(2,799,329)
|
915,132
|
33 %
|
|
Net operating
income (NOI)
|
801,501
|
617,412
|
184,089
|
30 %
|
|
Interest
income
|
31,844
|
21,654
|
10,190
|
47 %
|
|
Interest
expense
|
(2,534,249)
|
(2,643,383)
|
109,134
|
4 %
|
|
Trust
expense
|
(271,211)
|
(265,074)
|
(6,137)
|
(2) %
|
|
Loss before the
following
|
(1,972,115)
|
(2,269,391)
|
297,276
|
13 %
|
|
Loss on sale of
investment property
|
(7,322)
|
(41,835)
|
34,513
|
82 %
|
|
Fair value
adjustments
|
394,686
|
4,055,639
|
(3,660,953)
|
(90) %
|
|
Income (loss) before
discontinued operations
|
(1,584,751)
|
1,744,413
|
(3,329,164)
|
(191) %
|
|
Loss from discontinued
operations
|
(733,112)
|
(588,967)
|
(144,145)
|
(24) %
|
|
Income (loss) and
comprehensive income (loss)
|
$
(2,317,863)
|
$ 1,155,446
|
$
(3,473,309)
|
(301) %
|
Overall Results
LREIT completed Q1-2024 with a loss and comprehensive loss of
$2.3 million, compared to an income
and comprehensive income of $1.2
million during Q1-2023, representing a decrease in income
and comprehensive income of $3.5
million. The decrease mainly reflects a $3.7 million decrease related to fair value
adjustments and a $0.1 million
increase in loss from discontinued operations, partially offset by
a $0.2 million increase in the net
operating income ("NOI") of the investment properties and
investment properties held for sale, and a $0.1 million decrease in interest expense.
The decrease from fair value adjustments reflects a $0.4 million gain from fair value adjustments
during Q1- 2024, compared to a $4.1
million gain from fair value adjustments during Q1-2023. The
gain from fair value adjustments during Q1-2024 is primarily due to
a $0.4 million increase in the
carrying value of previously written off vacant land to reflect the
sales price for the land in the purchase and sales agreement
executed by the Trust subsequent to March
31, 2024. The gain from fair value adjustments recognized
during Q1-2023 mainly reflected an increase in the carrying value
of the Fort McMurray properties
segment, primarily as a result of an increase in the normalized
revenue considered to be achievable in the market in light of a
continued favourable occupancy trend.
The increase in loss from discontinued operations is primarily
due to a $0.1 million impairment
adjustment resulting from the write‑down of capital expenditures at
Chateau St. Michael's that are considered to be maintenance versus
value‑added in nature. The property's carrying value as of
March 31, 2024 is consistent with the
year‑end carrying value and the sales price for the property in the
purchase and sales agreement executed by the Trust subsequent to
March 31, 2024.
The increase in the NOI mainly reflects increases in the average
rental rate of the Fort McMurray
properties segment, which increased $69 or 5% from $1,377 during Q1-2023 to $1,446 during Q1- 2024; partially offset by a
reduction in the average occupancy rate of the Fort McMurray properties segment, which
decreased from 95% during Q1-2023 to 94% during Q1-2024. The sales
of Laird's Landing, Lakewood Apartments and Westhaven Manor on
January 31, 2023 and the sales of
Parsons Landing and Nelson Ridge Estates on March 1, 2024 resulted in a $0.9 million decrease in rental revenues and a
largely offsetting $0.9 million
decrease in property operating costs in the held for sale and/or
sold properties segment, during Q1-2024, in comparison to
Q1-2023.
The decrease in interest expense is mainly due to the assumption
of mortgage loan debt, in the aggregate principal amount of
$22.9 million, by the purchaser upon
completion of the sales of Laird's Landing, Lakewood Apartments and
Westhaven Manor on January 31, 2023
and the assumption of mortgage loan debt, in the aggregate
principal amount of $57.5 million,
inclusive of accrued interest and fees, by the purchaser upon
completion of the sales of Parsons Landing and Nelson Ridge Estates
on March 1, 2024; as well as a
decrease in the weighted average interest rate on the Trust's
mortgage loans, which decreased from 7.2% in Q1-2023 to 6.6% in
Q1-2024; partially offset by a $0.3
million increase in amortization of transaction costs mainly
due to the full amortization of transaction costs associated with
Parsons Landing during Q1-2024 as a result of the sale of the
property on March 1, 2024.
ABOUT LREIT
LREIT is a real estate investment trust, which is listed on the
TSX Venture Exchange under the symbol LRT.UN (Trust Units). For
further information on LREIT, please visit our website at
www.lreit.com.
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.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as the term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Lanesborough Real Estate Investment Trust
