TORONTO, ONTARIO--(Marketwired - May 5, 2016) - DREAM OFFICE REIT (TSX:D.UN) or (the "Trust" or "we") today announced its financial results for the three months ended March 31, 2016 and provided an update to its three-year strategic plan (the "Plan").
PLAN UPDATE
On February 18, 2016, we announced our Plan to reduce the discount between our unit price and our net asset value, and surface value for the Trust's unitholders. Since the date of the announcement, Dream Office REIT's unit price has appreciated over 20%, outperforming the S&P/TSX Capped REIT Index by nearly 12% in the same period. The improvement in the Trust's unit price has added over $370 million to the Trust's market valuation.
Today, the Trust is pleased to report that it has made solid progress on the execution of the Plan:
OPERATIONAL HIGHLIGHTS
SELECTED FINANCIAL INFORMATION (unaudited) |
As at |
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($000's except number of properties, square footage and percentages) | March 31, 2016 |
December 31, 2015 |
March 31, 2015 |
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Total Portfolio | |||||||||
Number of properties(1) | 160 | 166 | 174 | ||||||
Investment properties value(1) | $ | 6,706,289 | $ | 6,956,189 | $ | 7,193,381 | |||
Gross leasable area ("GLA")(1)(2) | 22,281 | 23,030 | 24,124 | ||||||
Comparative Portfolio | |||||||||
Occupancy rate - including committed (period-end)(1)(3) | 91.4 | % | 91.4 | % | 92.8 | % | |||
Occupancy rate - in place (period-end)(1)(3) | 89.4 | % | 89.8 | % | 91.4 | % | |||
Average in-place and committed net rent per square foot (period-end)(1)(3) | $ | 19.02 | $ | 18.98 | $ | 18.72 | |||
Market rent / average in-place and committed net rent (%)(1)(3) | 0.9 | % | 3.3 | % | 8.1 | % |
Footnotes: please refer to definitions on page 5.
FINANCIAL HIGHLIGHTS
SELECTED FINANCIAL INFORMATION (unaudited) |
For the three months ended |
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($000's except percentages and per unit amounts) | March 31, 2016 |
December 31, 2015 |
March 31, 2015 |
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Operating results | ||||||
Net operating income ("NOI")(4) | $ | 105,845 | $ | 105,135 | $ | 107,178 |
Comparative properties NOI(4)(5) | $ | 108,383 | $ | 108,569 | $ | 109,423 |
FFO(4) | $ | 78,223 | $ | 79,672 | $ | 77,439 |
Distributions | ||||||
Declared distributions(6) | $ | 49,617 | $ | 63,335 | $ | 60,641 |
Per unit amounts(7) | ||||||
Distribution rate(6) | $ | 0.44 | $ | 0.56 | $ | 0.56 |
FFO (basic)(4) | 0.69 | 0.70 | 0.71 | |||
FFO (diluted)(4) | 0.68 | 0.70 | 0.71 | |||
Net asset value(4) | $ | 30.31 | $ | 31.59 | $ | 34.98 |
Footnotes: please refer to definitions on page 5.
PORTFOLIO ACTIVITY
Property | Ownership (%) |
Disposed share of GLA (square feet) |
Sales price* (in 000's) |
Mortgages discharged/ assumed by purchaser (in 000's) |
Date disposed |
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2450 Girouard St W & 455 Saint Joseph Ave (Intact Tower), Saint-Hyacinthe | 100 | % | 231,500 | $ | 35,034 | $ | (15,123 | ) | February 26, 2016 |
8550 Newman Blvd., Montreal | 100 | % | 66,397 | 6,589 | (5,704 | ) | March 1, 2016 | ||
1305 Chemin Sainte-Foy, Quebec City | 100 | % | 37,266 | 3,058 | (2,441 | ) | March 1, 2016 | ||
1 Riverside Drive, Windsor | 100 | % | 235,915 | 36,820 | - | March 10, 2016 | |||
Total dispositions in Q1 2016 | 571,078 | $ | 81,501 | $ | (23,268 | ) | |||
2010 Winston Park Drive, Oakville | 40 | % | 31,655 | $ | 7,890 | $ | (4,550 | ) | April 1, 2016 |
4259-4299 Canada Way, Burnaby | 100 | % | 119,570 | 27,625 | (14,631 | ) | April 27, 2016 | ||
960 Quayside Drive, New Westminster | 100 | % | 61,849 | 19,800 | (8,609 | ) | April 29, 2016 | ||
625 Cochrane Drive and Valleywood Corporate Centre, Markham | 100 | % | 317,566 | 75,429 | (31,861 | ) | May 2, 2016 | ||
Total year-to-date | 1,101,718 | $ | 212,245 | $ | (82,919 | ) |
* Sales price reflects gross proceeds net of adjustments and before transaction costs.
CAPITAL HIGHLIGHTS
KEY FINANCIAL PERFORMANCE METRICS (unaudited) |
As at |
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($000's except percentages and unit amounts) | March 31, 2016 |
December 31, 2015 |
March 31, 2015 |
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Financing | |||||||||
Weighted average face interest rate (period-end) | 3.96 | % | 4.05 | % | 4.16 | % | |||
Interest coverage ratio(1) | 2.9 times | 2.9 times | 2.9 times | ||||||
Net debt-to-adjusted EBITDFV (years)(1) | 7.8 | 7.7 | 7.9 | ||||||
Net debt-to-gross book value(1) | 48.6 | % | 48.3 | % | 47.6 | % | |||
Net secured debt-to-gross book value(1) | 41.8 | % | 41.0 | % | 40.5 | % | |||
Unencumbered assets | $ | 387,000 | $ | 825,000 | $ | 820,000 | |||
Capital (period end) | |||||||||
Total number of units (REIT A and LP B Units) | 113,877,197 | 113,094,461 | 108,510,096 |
Footnotes: please refer to definitions on page 5.
INVESTOR PRESENTATION AND OTHER INFORMATION
A slide presentation of the Trust's Plan update is available on our website at www.dreamofficereit.ca.
Information appearing in this news release is a select summary of results. The condensed consolidated financial statements and management's discussion and analysis of the Trust are available at www.dreamofficereit.ca and on www.sedar.com.
Dream Office REIT is an unincorporated, open-ended real estate investment trust. Dream Office REIT is focused on owning, acquiring, leasing and managing well-located, high-quality central business district and suburban office properties. Its portfolio currently comprises approximately 22.3 million square feet of gross leasable area in major urban centres across Canada. Dream Office REIT's portfolio is well diversified by geographic location and tenant mix. For more information, please visit our website at www.dreamofficereit.ca.
FOOTNOTES
(1) Includes investment in joint ventures and excludes redevelopment properties and assets held for sale at period-end. |
(2) In thousands of square feet. |
(3) Comparative periods excludes properties sold and properties held for sale in Q1 2016. |
(4) FFO, net asset value, comparative properties NOI, NOI, interest coverage ratio, net average debt-to-EBITDFV, net debt-to-gross book value, and net secured debt-to-gross book value are non-GAAP measures used by Management in evaluating operating performance. Please refer to the cautionary statements under the heading "Non-GAAP Measures" in this press release. |
(5) Comparative properties NOI (non-GAAP measure) includes NOI of same properties owned by the REIT in the current and comparative period and excludes lease termination fees and certain one-time adjustments, property held for redevelopment, straight-line rent and amortization of lease incentives. |
(6) Effective with the February 2016 distribution, the Trust revised its monthly distribution to $0.125 per unit or $1.50 per unit on an annualized basis. |
(7) A description of the determination of basic and diluted amounts per unit can be found in section "Non-GAAP measure and other disclosures" under the heading "Weighted average number of units" of the MD&A. |
(8) Payout ratio (non-GAAP measure) is calculated as the distribution rate as a percentage of basic FFO per unit. |
Non-GAAP Measures
The REIT's condensed consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). In this press release, as a complement to results provided in accordance with IFRS, the REIT discloses and discusses certain non-GAAP financial measures, Funds From Operations (excluding Reorganization) ("FFO (excluding Reorganization))", net asset value, comparative properties Net Operating Income ("NOI"), NOI, interest coverage ratio, net average debt-to-EBITDFV, net debt-to-gross book value, net secured debt-to-gross book value, and payout ratios as well as other measures discussed elsewhere in this release. These non-GAAP measures are not defined by IFRS, do not have a standardized meaning and may not be comparable with similar measures presented by other issuers. The REIT has presented such non-GAAP measures as Management believes they are relevant measures of the REIT's underlying operating performance and debt management. Non-GAAP measures should not be considered as alternatives to net income, cash generated from (utilized in) operating activities or comparable metrics determined in accordance with IFRS as indicators of the REIT's performance, liquidity, cash flow, and profitability. For a full description of these measures and, where applicable, a reconciliation to the most directly comparable measure calculated in accordance with IFRS, please refer to the "Non-GAAP Measures and Other Disclosures" in Dream Office REIT's Management's Discussion and Analysis for the three months ended March 31, 2016.
Forward-looking information
This press release may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream Office REIT's control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, general and local economic and business conditions; the financial condition of tenants; our ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest and currency rate functions. Our objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable, interest rates remain stable, conditions within the real estate market remain consistent, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forward-looking information in this press release speaks as of the date of this press release. Dream Office REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise. Additional information about these assumptions and risks and uncertainties is contained in Dream Office REIT's filings with securities regulators, including its latest annual information form and MD&A. These filings are also available at Dream Office REIT's website at www.dreamofficereit.ca.
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