Dundee Industrial REIT Announces Solid Results for First Full Fiscal Year
26 Février 2014 - 12:13AM
Marketwired
Dundee Industrial REIT Announces Solid Results for First Full
Fiscal Year
This news release contains forward-looking information that is
based upon assumptions and is subject to risks and uncertainties as
indicated in the cautionary note contained within this press
release.
TORONTO, ONTARIO--(Marketwired - Feb 25, 2014) - DUNDEE
INDUSTRIAL REIT (TSX:DIR.UN) today announced its financial results
for the three and twelve months ended December 31, 2013.
HIGHLIGHTS
- Growth in adjusted funds from operations ("AFFO") since IPO of
12% per unit - During the three months ended December 31, 2013,
AFFO was 19 cents per unit compared to 17 cents in the same period
in the prior year. For the year ended December 31, 2013, AFFO was
74 cents per unit, an increase of 9% from the annualized Q4 2012
results.
- Occupancy increases to 95.7% - The Trust completed its
strongest quarter of leasing to date with 751,000 square feet
completed, reflecting a tenant renewal ratio of 70%, new leasing
transactions of 249,000 square feet and an increase in space
committed for future occupancy of 55,000 square feet. This brings
total leasing for the year to 2.1 million square feet reflecting a
70% renewal ratio.
- Maintained a strong and stable capital structure - Leverage
remained stable at 52.6% with interest coverage of 2.9 times and a
weighted average term to maturity on debt of 4.1 years.
- Continued opportunities for rent growth - Estimated market
rental rates exceed in place rents by approximately 6.4%.
- Completion of first full fiscal year - Since its initial public
offering ("IPO") on October 4, 2012, the portfolio has grown from
6.0 million square feet to 15.7 million square feet increasing its
geographic diversification and establishing its market presence and
its leasing, property management and operating platforms.
SELECTED FINANCIAL INFORMATION |
|
(unaudited) |
Three Months Ended |
Year Ended |
Period Ended |
($000's except unit and per unit amounts) |
December 31, 2013 |
September 30, 2013 |
December 31, 2013 |
December 31, 2012 (1) |
Investment properties revenue |
$
41,149 |
$
37,842 |
$
142,944 |
$
17,202 |
Net operating income ("NOI")(2) |
27,060 |
27,221 |
98,927 |
12,535 |
Funds from operations ("FFO")(2) |
16,859 |
17,126 |
61,550 |
8,452 |
Adjusted funds from operations ("AFFO")(2) |
13,630 |
13,729 |
49,164 |
6,492 |
Investment properties value |
1,540,791 |
1,536,125 |
1,540,791 |
1,147,410 |
Debt |
840,382 |
838,151 |
840,382 |
649,845 |
|
|
|
|
|
Per unit data (basic) |
|
|
|
|
FFO |
$
0.24 |
$
0.24 |
$
0.93 |
$
0.22 |
AFFO |
0.19 |
0.19 |
0.74 |
0.17 |
Distributions |
0.17 |
0.17 |
0.69 |
0.16 |
FFO payout ratio (%) |
70.8% |
70.8% |
74.2% |
72.7% |
AFFO payout ratio (%) |
89.5% |
89.5% |
93.2% |
94.1% |
|
|
|
|
|
Units (period end) |
|
|
|
|
REIT Units |
54,921,726 |
54,784,387 |
54,921,726 |
36,257,538 |
LP Class B Units, Series 1 |
16,282,096 |
16,282,906 |
16,282,096 |
16,198,747 |
Total number of units |
71,203,822 |
71,066,483 |
71,203,822 |
52,456,285 |
|
|
|
|
|
Portfolio gross leasable area (sq. ft.) |
15,663,357 |
15,661,717 |
15,663,357 |
11,438,195 |
Occupied and committed space |
95.7% |
95.1% |
95.7% |
96.3% |
See footnotes on page 3 |
|
|
|
|
"We are pleased with the results for the Trust's first full
fiscal year," said Randy Cameron, President and Chief Executive
Officer. "Our efforts in 2014 will be focused on continuing to
leverage the strong leasing fundamentals in our major markets,
exploring value-add intensification initiatives in our properties
and improving the quality of our portfolio through opportunistic
capital recycling."
FINANCIAL HIGHLIGHTS
- AFFO per unit growth since IPO on October 4, 2012 - AFFO for
the quarter was $13.6 million or 19 cents on a per unit basis,
bringing total AFFO for the year to $49.2 million and 74 cents per
unit. AFFO per unit for the quarter was 12% higher than the same
period in the prior year and stable compared to the third quarter
of 2013.
- Increase in FFO per unit - FFO for the quarter was $16.9
million or 24 cents per unit, and $61.6 million or 93 cents per
unit for the year. FFO for the quarter increased 9% compared to the
same period in the prior year and was stable compared to the third
quarter of 2013.
- Total NOI of $27.1 million for the quarter and $98.9 million
for the year - NOI has grown since the first quarter after the IPO
as a result of acquisitions, and was stable compared to the third
quarter of 2013.
OPERATIONAL HIGHLIGHTS
- Leasing Profile - Leasing activity during the fourth quarter
included 249,000 square feet of new leases, 447,000 square feet of
renewals and a net increase in committed space for future occupancy
of 55,000 square feet, compared to 641,000 square feet of expiries
and 11,000 square feet of early terminations. At period-end, the
Trust had 877,000 square feet of vacant space, of which 208,000
square feet is committed for future occupancy. The average
remaining lease term at December 31, 2013 is 4.7 years. This
activity brings the Trust's total leasing volume for the year to
2.1 million square feet, with a 70% renewal ratio.
- Portfolio occupancy at 95.7% - Overall occupancy (including
committed space) improved to 95.7% compared to 95.1% at end of the
third quarter of 2013. Occupancy at December 31, 2012 was
96.3%.
- Estimated market rents 6.4% above average in-place rents - At
quarter-end, estimated market rents were approximately 6.4% above
the Trust's current average in-place rental rate of $6.92 per
square foot (September 30, 2013 - $6.89). The difference between
in-place and market rent provides the Trust with opportunities for
rental rate growth.
|
GLA (sq. ft.) |
Occupancy (%) |
Average lease term (years) |
Average in-place rent (per sq. ft.) |
Estimated market rent (per sq. ft.) |
Western Canada |
4.3
million |
96.7 |
4.3 |
$
8.60 |
$
9.66 |
Central Canada |
8.6
million |
96.1 |
5.2 |
6.01 |
6.16 |
Eastern Canada |
2.8 million |
93.0 |
3.5 |
7.11 |
7.45 |
Total |
15.7 million |
95.7 |
4.7 |
$ 6.92 |
$ 7.36 |
CAPITAL STRUCTURE
The Trust's capital structure remained stable during the year,
with leverage at a stable 52.6% and interest coverage of 2.9
times.
Key performance indicators(3) |
December 31, 2013 |
December 31, 2012 |
Level of debt (debt-to-total assets)(4) |
52.6% |
54.2% |
Interest coverage ratio(5) |
2.9 times |
3.0 times |
Average face interest rate on all debt |
4.18% |
4.19% |
Debt - average term to maturity (years) |
4.1 |
4.1 |
See footnotes on page 3 |
|
|
On February 24, 2014, the Trust completed a $56 million
refinancing of maturing mortgages on a portfolio of eight of its
properties in Halifax. Net proceeds after repayment of the existing
mortgage amounted to $21 million, which were used to repay other
maturing mortgages and the outstanding balance on the demand
revolving credit facility. The new mortgage term was five years at
a fixed rate of 3.31%.
OUTLOOK
After more than a year of operations, management has solidified
Dundee Industrial REIT's size and presence in key markets,
strengthening the platform and achieving AFFO and FFO per unit
growth. With acquisitions completed year-to-date, the Trust now
owns a nationally diversified portfolio totalling 15.7 million
square feet of gross leasable area which is generating solid
operating performance.
For 2014, we will be focused on continuing to grow rents by
leveraging the continuing strength in our major markets, exploring
intensification opportunities in our portfolio, and recycling
capital on an opportunistic basis to continue to improve the
quality of our portfolio.
CONFERENCE CALL
Senior management will host a conference call to discuss the
results tomorrow, February 26, 2014 at 2:00 p.m. (ET). To access
the call, please dial: (416) 216-4169 or toll free at
1-866-229-4144 and using passcode 9411711#. A taped replay of the
call will be available for 90 days. To access the conference call
via webcast, please go to Dundee Industrial REIT's website at
www.dundeeindustrial.com and, in the Investor Centre, click on
Calendar of Events. The webcast will be archived for 90 days.
Other information
Information appearing in this news release is a select summary
of results. The consolidated financial statements and management's
discussion and analysis for the Trust, as well as its Supplementary
Information Package will be available at www.dundeeindustrial.com
and on www.sedar.com.
Dundee Industrial REIT is an unincorporated, open-ended real
estate investment trust. Dundee Industrial REIT owns a portfolio of
206 primarily light industrial properties comprising approximately
15.7 million square feet of gross leasable area in key industrial
markets across Canada. Its objective is to build upon and grow its
portfolio and to provide stable, sustainable and growing cash
distributions to its unitholders. For more information, please
visit www.dundeeindustrial.com.
FOOTNOTE
(1) The Trust was formed on July 20, 2012 with no operating
activity from July 20, 2012 to October 3, 2012. The Trust completed
its IPO on October 4, 2012. Thus the prior year period reflects
operating results from October 4, 2012 to December 31, 2012. (2)
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. (3) The key performance indicators include the
results of operations for the year ended December 31, 2013 and for
the period from October 4, 2012 to December 31, 2012. (4) Level of
debt is determined as total debt before deferred financing costs
and mark-to-market adjustments, divided by total assets. (5) The
interest coverage ratio for the year ended December 31, 2013 and
for the period from July 20, 2012 to December 31, 2012, is
calculated as net rental income plus interest and fee income, less
general and administrative expenses, plus deferred unit
compensation expense, all divided by interest expense on debt,
excluding deferred financing and mark-to-market adjustments.
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 Dundee Industrial 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. Dundee Industrial 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
Dundee Industrial REIT's filings with securities regulators,
including its latest annual information form and MD&A. These
filings are also available at Dundee Industrial REIT's website at
www.dundeeindustrial.com.
Dundee Industrial REITMichael CooperChairman, Executive
Committee(416) 365-5145mcooper@dundeeindustrial.comDundee
Industrial REITRandy CameronPresident & Chief Executive
Officer(403) 270-2480rcameron@dundeeindustrial.comDundee Industrial
REITJohn ToddChief Financial Officer(416)
365-8963jtodd@dundeeindustrial.comwww.dundeeindustrial.com
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