EDMONTON, AB--(Marketwired - March 09, 2017) -
Melcor REIT (
Darin Rayburn, CEO of Melcor REIT commented: "It is my privilege to report to you on our 2016 results. 2016 had its challenges, which our team met head on by understanding and responding to market demand, and through their ongoing commitment to delivering exceptional customer care. We achieved stable results in spite of the difficult market.
Since our IPO in 2013, we've grown our REIT significantly - by 67% in asset value, 68% in revenue and 77% in gross leasable area. We intend to continue to grow, but did not identify any acquisitions that we could execute at an attractive price in 2016.
We see the mood improving across the business community, and the outlook - especially in Edmonton - appears more buoyant than at the outset of 2016. However, we are not content to rest on our past performance. We continue to seek opportunities to improve all elements of our business - from maintenance programs to tenant interactions.
With our strong history, diverse portfolio, focus on property management and customer care, and our pipeline of high quality assets being developed by Melcor Developments Ltd., we remain well positioned for the future."
Highlights for the year include:
The REIT's performance remained steady throughout 2016. The stability and diversity of the REIT's portfolio with respect to both tenant profile and asset class position the REIT well for managing through economic cycles. The REIT is focused on the real estate fundamentals of asset enhancement and property management while conservatively managing debt. At 78%, the REIT's payout ratio is a strong indicator of overall health and the REIT's ability to sustain distributions at current rates.
Highlights of 2016 include:
|Three-months ended||Year ended|
|December 31||December 31|
|($000s)||2016||2015||Change %||2016||2015||Change %|
|Net operating income (NOI)||10,251||10,401||(1)%||42,329||41,313||2 %|
|Funds from operations (FFO)||6,306||6,629||(5)%||26,668||26,345||1 %|
|Adjusted funds from operations (AFFO)||5,297||5,434||(3)%||22,284||21,728||3 %|
|Rental revenue||16,170||16,963||(5)%||66,042||65,482||1 %|
|Income before fair value adjustments||3,374||3,481||(3)%||13,694||13,422||2 %|
|Fair value adjustment on investment properties||776||(2,315)||nm||(6,546)||(5,418)||nm|
|Distributions to unitholders||1,881||1,882||- %||7,527||7,582||(1)%|
|Cash flows from operations||3,078||3,842||(20)%||12,312||10,563||17 %|
|Same asset NOI||9,338||9,991||(7)%||38,980||39,696||(2)%|
|Per unit metrics|
|Income (loss) - diluted||$0.25||$0.30||(17)%||($1.00)||$0.71||(241)%|
|Distributions||$0.17||$0.17||- %||$0.68||$0.68||- %|
|Payout ratio||80%||80%||- %||78%||80%||(3)%|
|Total assets ($000s)||663,724||666,458||- %|
|Equity ($000s)(1)||260,600||260,600||- %|
|Debt ($000s)(2)||351,947||353,521||- %|
|Weighted average interest rate on debt||3.63%||3.80%||(4%)|
|Debt to GBV ratio(3)||55%||56%||(2)%|
|Finance costs coverage ratio(4)||2.88||2.87||- %|
|Debt service coverage ratio(5)||2.65||2.76||(4)%|
|Number of properties||38||38||0 %|
|Gross leasable area (GLA) (sf)||2,775,782||2,768,750||- %|
|Occupancy (weighted by GLA)||92.4%||93.6%||(1%)|
|Retention (weighted by GLA)||71.0%||73.0%||(3)%|
|Weighted average remaining lease term (years)||4.85||5.27||(8)%|
|Weighted average base rent (per sf)||$15.73||$15.49||2 %|
(1) Calculated as the sum of trust units and Class B LP Units at their book value. In accordance with IFRS the Class B LP Units are presented as a financial liability in the consolidated financial statements.
(2) Calculated as the sum of total amount drawn on revolving credit facility, mortgages payable, Class C LP Units, excluding unamortized fair value adjustment on Class C LP Units and convertible debenture, excluding unamortized discount and transaction costs.
(3) Excluding convertible debentures, Debt to GBV ratio is 50% (December 31, 2015 - 50%).
(4) Calculated as the sum of FFO and finance costs; divided by finance costs, excluding distributions on Class B LP Units and fair value adjustment on derivative instruments.
(5) Calculated as FFO; divided by sum of contractual principal repayments on mortgages payable and distributions of Class C LP Units, excluding amortization of fair value adjustment on Class C LP Units.
MD&A and Financial Statements
Information included in this press release is a summary of results. This press release should be read in conjunction with Melcor REIT's 2016 consolidated financial statements and management's discussion and analysis, which can be found on the REIT's website at www.MelcorREIT.caor on SEDAR (www.sedar.com).
Conference Call & Webcast
Unitholders and interested parties are invited to join CEO Darin Rayburn and CFO Naomi Stefura on a conference call to be held Friday, March 10, 2017 at 11:00 AM ET (9:00 AM MT). Call 416-340-2218 in the Toronto area; 800-273-9672 toll free.
The call will be webcast at http://www.gowebcasting.com/8367. A replay of the call will be available shortly after the call is concluded at the same address.
Annual General Meeting
We invite unitholders to join us at Melcor REIT's annual meeting on April 26, 2017 at 10:00 am MT. The meeting will be held in the Devonian Room at the Westin Edmonton, 10135 100 Street NW. We look forward to seeing you there.
About Melcor REIT
Melcor REIT is an unincorporated, open-ended real estate investment trust. Melcor REIT owns, acquires, manages and leases quality retail, office and industrial income-generating properties with exposure to high growth western Canadian markets. Its portfolio is currently made up of interests in 38 properties representing approximately 2.78 million square feet of gross leasable area located across Alberta and in Regina, Saskatchewan; and Kelowna, British Columbia. For more information, please visit www.MelcorREIT.ca.
NOI, FFO and AFFO are key measures of performance used by real estate operating companies; however, they are not defined by International Financial Reporting Standards ("IFRS"), do not have standard meanings and may not be comparable with other industries or income trusts. These non-IFRS measures are more fully defined and discussed in the REIT's management discussion and analysis for the period ended December 31, 2016, which is available on SEDAR at www.sedar.com.
This press release may contain forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events. 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 the REIT's control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, general and local economic and business conditions; the financial condition of tenants; the REIT's ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest rate fluctuations. The REIT's 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. The 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 the REIT's filings with securities regulators.
Chief Executive Officer