TORONTO, Aug. 9, 2022
/CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT")
(TSX: SMU.UN) announced today continued growth and strong operating
performance for the three and six months ended June 30,
2022.
"Revenue continued to increase in the second quarter, driven by
portfolio growth, occupancy rising to near-full levels, and
significant rental rate increases on renewals. With this revenue
growth, and our proven property management and leasing activities,
funds from operations1 increased by over 39% in the
quarter," commented Paul Dykeman,
Chief Executive Officer. "Looking ahead, demand remains
exceptionally strong in all of our target markets with record low
availability rates and significant market rent increases. By
capitalizing on these solid fundamentals, we are confident we will
achieve another record year of property performance in 2022."
Q2 2022 HIGHLIGHTS
FINANCIAL:
- Revenue from investment properties increased by 13.8% to
$62.3 million.
- Net rental income increased by 13.8% to $46.8 million.
- Fair value gains on investment properties of $45.4 million (0.9% of investment property fair
value).
- FFO1 increased 39.4% to $36.4
million ($0.192 per
Unit).
- Increased the Green Unsecured Development Credit Facility by
$100 million to $200 million ($150
million green tranche and $50
million conventional tranche).
- Increased the unsecured revolving credit facility by
$100 million to $400 million and extended the term by one year to
March 23, 2025.
- Entered into $169.7 million of
new 10-year secured term mortgage financing at an effective
interest rate of 4.43%, a significant portion of which is
interest-only.
- Approximately $1.4 billion of
available liquidity1 and $3.3
billion of unencumbered assets at June 30, 2022.
OPERATIONS:
- Near-full occupancy at 99.1% with an average lease term of 5.5
years and 2.0% average annual contractual rent steps.
- Future lease commitments on 101,829 sq. ft. (or 49.8% of
vacancy) as at June 30, 2022.
- Same property NOI1 increased 7.7% with Ontario and Quebec contributing 13.2% and 2.4%,
respectively.
- Completed over 1.6 million sq. ft. of lease renewals and new
lease deals year-to-date generating a 46.4% overall increase in
rents, including 76.0% in Ontario
and 73.9% in Quebec (excluding
contractual renewals).
- Pre-leasing completed on approximately 333,000 sq. ft. (100%)
of GLA under construction for development properties that are
expected to be completed and transferred to income-producing
properties in the third quarter of 2022.
___________________
|
1 Non-GAAP
measure. Refer to "Non-GAAP Measures" section in this press release
for further information.
|
PROPERTY PORTFOLIO:
- Acquired one income-producing property totalling 76,423 sq. ft.
in Vaughan, Ontario for a purchase
price of $25.2 million at a going-in
capitalization rate of 4.25%.
- Completed acquisition of remaining 50% interest in one
industrial property under development nearing completion in
Guelph, Ontario totalling 91,782
sq. ft. for a total acquisition cost of $12.8 million. Including its existing ownership
interest, the REIT's total investment is approximately $21.7 million generating a consolidated cap rate
of approximately 4.8%.
- Subsequent to quarter end, the REIT acquired two industrial
properties totalling 174,790 square feet located in Mississauga, Ontario, for a purchase price of
$59.3 million at a going-in
capitalization rate of 4.9%.
OTHER:
- Insider ownership fully aligned with 6.9% of REIT Units
outstanding held by management and Trustees at June 30, 2022.
- Recognized by the Globe and Mail's 2022 annual Women Lead Here
benchmark of executive gender diversity for the second consecutive
year in a row.
- The REIT published its inaugural Green Bond Allocation Report
dated April 12, 2022 in relation to
the Series C senior unsecured debentures (Green Bond) issued on
April 12, 2021, allocating
$160.4 million of the $249.1 million net proceeds of the Series C
debentures to Eligible Green Initiatives.
DISTRIBUTION INCREASE:
- On May 10, 2022, the REIT'S Board
of Trustees announced a 3.0% increase in monthly cash distributions
to $0.0484 per Unit ($0.581 per Unit annualized), effective for the
May 2022 distribution.
This press release should be read in conjunction with Summit's
Unaudited Condensed Consolidated Interim Financial Statements for
the three and six months ended June 30, 2022 and 2021, and
Management's Discussion and Analysis for the three and six months
ended June 30, 2022, which are available on the REIT's website
at www.summitiireit.com and on SEDAR at www.sedar.com.
FINANCIAL AND OPERATING HIGHLIGHTS
Summit's key financial and operating metrics for the three and
six months ended June 30, 2022 are as follows:
|
|
|
|
|
Q2
2022
|
|
Q2 2021
|
(in thousands of
Canadian dollars, except per Unit amounts)
|
Q2
2022
|
|
Q2 2021
|
|
YTD
|
|
YTD
|
|
|
|
|
|
|
|
|
Portfolio
Performance
|
|
|
|
|
|
|
|
Occupancy
|
99.1 %
|
|
98.8 %
|
|
99.1 %
|
|
98.8 %
|
Revenue from investment
properties
|
$
62,260
|
|
$
54,715
|
|
$
121,375
|
|
$
107,424
|
Property operating
expenses
|
$
15,424
|
|
$
13,548
|
|
$
31,402
|
|
$
27,484
|
Net rental
income
|
$
46,836
|
|
$
41,167
|
|
$
89,973
|
|
$
79,940
|
Finance
costs(2)
|
$
9,274
|
|
$
13,977
|
|
$
18,540
|
|
$
23,375
|
Fair value adjustments
to investment properties
|
$
45,390
|
|
$
588,797
|
|
$
255,102
|
|
$
693,645
|
Net income
|
$
83,054
|
|
$
618,305
|
|
$
324,965
|
|
$
750,727
|
|
|
|
|
|
|
|
|
Operating
Performance
|
|
|
|
|
|
|
|
FFO(1)(2)
|
$
36,351
|
|
$
26,076
|
|
$
68,842
|
|
$
54,258
|
FFO per
Unit(1)(2)
|
$
0.192
|
|
$
0.155
|
|
$
0.375
|
|
$
0.323
|
Net income per Unit -
basic
|
$
0.438
|
|
$
3.677
|
|
$
1.769
|
|
$
4.469
|
Same property
NOI(1)
|
$
39,733
|
|
$
36,888
|
|
$
75,794
|
|
$
72,316
|
Same property
NOI(1) growth
|
7.7 %
|
|
5.5 %
|
|
4.8 %
|
|
3.7 %
|
|
|
|
|
|
|
|
|
Distributions
|
|
|
|
|
|
|
|
Distributions declared
to Unitholders
|
$
27,283
|
|
$
23,379
|
|
$
52,856
|
|
$
46,042
|
Distributions per Unit
declared to Unitholders
|
$
0.144
|
|
$
0.139
|
|
$
0.285
|
|
$
0.274
|
|
|
|
|
|
|
|
|
FFO payout ratio
without DRIP benefit(1)(2)
|
75.0 %
|
|
89.6 %
|
|
76.0 %
|
|
84.8 %
|
FFO payout ratio with
DRIP benefit(1)(2)
|
58.4 %
|
|
69.6 %
|
|
59.8 %
|
|
67.4 %
|
|
|
|
|
|
|
|
|
Weighted average Units
outstanding (in thousands)
|
189,677
|
|
168,147
|
|
183,750
|
|
167,986
|
|
|
|
|
|
|
|
|
Liquidity and
Leverage
|
|
|
|
|
|
|
|
Total assets
|
$
5,189,506
|
|
$
4,042,557
|
|
$
5,189,506
|
|
$
4,042,557
|
Total unencumbered
assets
|
$
3,323,060
|
|
$
2,233,746
|
|
$
3,323,060
|
|
$
2,233,746
|
Total debt
|
$
1,387,127
|
|
$
1,303,113
|
|
$
1,387,127
|
|
$
1,303,113
|
|
|
|
|
|
|
|
|
Weighted average
effective interest rate
|
2.74 %
|
|
2.80 %
|
|
2.74 %
|
|
2.80 %
|
Weighted average term
to maturity (years)
|
5.1
|
|
5.3
|
|
5.1
|
|
5.3
|
|
|
|
|
|
|
|
|
Leverage(1)
|
26.7 %
|
|
32.2 %
|
|
26.7 %
|
|
32.2 %
|
Interest
coverage(1)
|
4.8x
|
|
3.8x
|
|
4.6x
|
|
3.8x
|
Debt service
coverage(1)
|
3.6x
|
|
2.7x
|
|
3.5x
|
|
2.6x
|
Debt-to-adjusted
EBITDA(1)
|
7.8x
|
|
8.6x
|
|
8.2x
|
|
8.8x
|
|
|
|
|
|
|
|
|
DBRS Issuer
Rating
|
BBB (low)
Positive
|
|
BBB (low)
Stable
|
|
BBB (low)
Positive
|
|
BBB (low)
Stable
|
|
|
|
|
|
|
|
|
Income-Producing
Investment Properties
|
|
|
|
|
|
|
|
Number of properties
acquired
|
1
|
|
2
|
|
4
|
|
3
|
Number of properties
disposed
|
—
|
|
5
|
|
1
|
|
6
|
Total number of
properties
|
160
|
|
156
|
|
160
|
|
156
|
Total GLA
|
21,591
|
|
20,253
|
|
21,591
|
|
20,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Non-GAAP
Measure. Refer to "Non-GAAP Measures" section in this press release
for further information.
|
(2) Finance
costs and FFO includes strategic non-recurring mortgage prepayment
costs of $4.0 million ($0.024 per Unit) for Q2 2021 and 2021 YTD.
Excluding the prepayment costs, FFO per Unit was $0.179 per Unit
and $0.347 per Unit for Q2 2021 and 2021 YTD, respectively. FFO
payout ratio without DRIP benefit excluding the prepayment costs
was 77.8% (60.4% including DRIP benefit) and 79.0% (62.8% including
DRIP benefit), respectively, for Q2 2021 and 2021 YTD.
|
PORTFOLIO GROWTH
During Q2 2022, the REIT acquired one
income-producing property, a 76,423 sq. ft. industrial building in
Vaughan, Ontario for a purchase
price of $25.2 million. The REIT also
acquired the remaining 50% interest in an industrial property under
development that is nearing completion in Guelph, Ontario totalling 91,782 sq. ft. from
the REIT's joint venture partner for a total acquisition cost of
$12.8 million. Including its
existing ownership interest, the REIT's total investment is
approximately $21.7 million
generating a consolidated cap rate of approximately 4.8%. The
Guelph property is expected to
move into income-producing properties in Q3 2022.
To date in 2022, the REIT acquired four income-producing
properties totalling 524,030 sq. ft., and five development sites
totalling approximately 77 acres with the potential to add
approximately 1.4 million sq. ft. of GLA to the portfolio.
At June 30, 2022, the REIT's portfolio totaled 160
properties aggregating 21.6 million sq. ft., with an additional 13
buildings under development aggregating 2.3 million sq. ft. of
potential GLA, for a total net book value of approximately
$5.0 billion. During the Q2 2022 and
2022 YTD, the REIT recognized fair value gains on its investment
properties of $45.4 million and
$255.1 million (0.9% and 5.1% of
investment property fair value, respectively), $33.8 million of which related to investment
properties under development that are nearing completion.
CONTINUED STRONG OPERATING PERFORMANCE
Revenue from
investment properties for Q2 2022 and 2022 YTD rose 13.8% and 13.0%
compared to the same prior year periods due primarily to
acquisitions completed over the prior twelve months, continuing
strong occupancy and higher overall rental rates on leasing
activities. Occupancy remained strong at June 30, 2022 at
99.1% with an average lease term of 5.5 years and 2.0% annual
contractual rent steps.
Net rental income for Q2 2022 and 2022 YTD increased 13.8% and
12.6% compared to the same prior year periods due primarily to
continuing strong occupancy, higher overall rental rates on leasing
activities and acquisitions completed over the prior twelve
months.
FFO1 increased 39.4% to $36.4
million ($0.192 per Unit)
during Q2 2022 compared to $26.1
million ($0.155 per Unit) in
the same prior year period. FFO1 for 2022 YTD increased
26.9% to $68.8 million ($0.375 per Unit) compared to $54.3 million ($0.323 per Unit) in the same prior year period.
FFO per Unit1 for Q2 2022 and 2022 YTD increased 23.6%
and 16.0%, respectively, compared to the same period year periods,
despite a 12.8% and 9.4% increase in Units outstanding. The REIT's
FFO payout ratio1 for Q2 2022 and 2022 YTD was 75.0% and
76.0%, respectively, excluding the benefit of the REIT's DRIP
(58.4% and 59.8%, respectively, including the benefit of the REIT's
DRIP).
Same property NOI1 rose 7.7% for Q2 2022 (4.8% for
2022 YTD), including a 13.2% increase in Ontario and 2.4% increase in Quebec (9.2% and 1.3% in Ontario and Quebec, respectively, for 2022 YTD). Growth in
same property NOI1 in the second quarter of 2022 was
driven primarily by rental rate growth from 2021 and 2022
year-to-date lease renewals and new lease deals, which generated an
average of 53.8% and 29.5% increase over expiring rents in
Ontario and Quebec, respectively, in 2021, and 72.8% and
44.7% increase over expiring rents in Ontario and Quebec, respectively, year-to-date in 2022, in
addition to an increase in other income in Ontario. Growth in same property
NOI1 for 2022 YTD was partially muted by the reversal of
bad debt provisions due to the successful collection of rents
($0.1 million in 2022 YTD and
$0.7 million in 2021 YTD). Same
property NOI1 for Q2 2022 represented approximately
84.8% of total portfolio NOI1 and 87.0% of total GLA at
June 30, 2022 (84.2% of total portfolio NOI and 85.4% of total
GLA for 2022 YTD).
STRATEGIC LEASING PROGRAM
The REIT completed over 1.6
million sq. ft. of lease renewals and new lease deals during the
second quarter of 2022 with a retention rate of 50.2%, generating
an average increase in monthly rents of 46.4% over the expiring
rent with a significant 76.0% increase over expiring rents in
Ontario and 73.9% in Quebec (excluding contractual renewals).
The REIT maintained near-full occupancy in Q2 2022 with limited
to no downtime, while also taking advantage of significantly higher
market rents on turnover of the space, with some re-leasing at
rental rates in excess of 100% of the expiring rent.
Furthermore, the REIT secured future lease commitments on
101,829 sq. ft. (or 49.8% of vacancy) as at June 30, 2022.
STRONG BALANCE SHEET AND LIQUIDITY
Total assets
increased to $5.2 billion at
June 30, 2022, up from $4.5
billion at December 31, 2021 due primarily to property
acquisitions during the period and fair value gains on investment
properties. Total debt was $1.4
billion at June 30, 2022 compared to $1.3 billion at December 31, 2021. At
June 30, 2022, the REIT's unsecured debt represented 66% of
total debt outstanding with approximately $3.3 billion in unencumbered assets.
On April 19, 2022, the REIT
amended its green unsecured development credit facility to increase
the commitment by $100 million.
Following the amendment, the total credit facility size is
$200 million, including a
$150 million green tranche and a
$50 million conventional tranche On
May 4, 2022, the REIT amended its
unsecured revolving credit facility to increase the commitment by
$100 million to $400 million and to extend the term by one year
to March 23, 2025. At June 30,
2022, nothing was drawn on the REIT's credit facilities.
During Q2 2022, the REIT repaid $37.4 million of maturing secured term
mortgages that carried a weighted average interest rate of 2.82%.
To date in 2022, the REIT repaid $60.9 million in maturing secured term
mortgages that carried a weighted average interest rate of 2.92%.
In May 2022, the also REIT entered
into $169.7 million of new
10-year secured term mortgage financing at an effective interest
rate of 4.43%, a significant portion of which is interest-only.
The REIT's debt metrics remained strong during the second
quarter of 2022. At June 30, 2022, the REIT's leverage
ratio1 was 26.7% compared to 32.2% at June 30,
2021. Debt service coverage, interest coverage and debt-to-adjusted
EBITDA ratios1 were 3.6x, 4.8x and 7.8x, respectively,
for Q2 2022 compared to 2.7x, 3.8x and 8.6x, respectively, for the
same prior year period.
Debt-to-adjusted EBITDA was 7.8x and 8.2x for the three and six
months ended June 30, 2022, respectively, a decrease from 8.6x
and 8.8x for the same prior year periods.
At June 30, 2022, the REIT's liquidity position remained
strong at approximately $1.4 billion
of available liquidity1 including cash, available
borrowing capacity on its credit facilities, and potential for new
financing that could be placed on a portion of its $3.3 billion of unencumbered assets.
MONTHLY CASH DISTRIBUTION INCREASE
On May 10, 2022, the REIT'S Board of Trustees
announced a 3.0% increase in monthly cash distributions to
$0.0484 per Unit ($0.581 per Unit annualized), effective for the
May 2022 distribution.
INVESTOR CONFERENCE CALL
A conference call will be
hosted by Summit's management team on Wednesday, August 10, 2022 at 10.00 am EST. The telephone numbers to
participate in the conference call are North America Toll Free: (888) 330-2446 and
International: (240) 789-2732. Please use the access code
7589769# when requested.
A slide presentation to accompany management's comments during
the conference call will be available prior to the conference call
on Summit's website at www.summitiireit.com. The live call will
also be available as a webcast. To access the audio webcast please
access the link on Summit's website at www.summitiireit.com.
NON-GAAP MEASURES
The REIT prepares and releases
consolidated financial statements prepared in accordance with IFRS
(GAAP). In this release, the REIT discloses and discusses certain
non-GAAP measures, including FFO, FFO per Unit, FFO payout ratio,
NOI, same property NOI, leverage ratio, interest coverage ratio,
debt service coverage ratio, debt-to-adjusted EBITDA and available
liquidity. The non-GAAP measures are further defined and discussed
in Appendix A | Non-GAAP Measures in the MD&A for the
three and six months ended June 30, 2022 and filed on SEDAR
(www.sedar.com), which is incorporated by reference and should be
read in conjunction with this release. Since these measures are not
determined by IFRS, such measures may not be comparable to similar
measures reported by other issuers. The REIT has presented such
non-GAAP measures as management believes the measures are a
relevant measure of the ability of the REIT to earn and distribute
cash returns to Unitholders and to evaluate the REIT's performance.
These non-GAAP measures should not be construed as
alternatives to net income or cash flow from operating activities
determined in accordance with IFRS as an indicator of the REIT's
performance.
Reconciliation of Non-GAAP Measures
The following
tables reconcile the REIT's non-GAAP measures to the most
comparable IFRS measures for the three and six months ended
June 30, 2022 and 2021.
FFO
The REIT's FFO, FFO per Unit and FFO payout ratio
are calculated as follows:
|
|
|
Q2
2022
|
Q2 2021
|
|
Q2
2022
|
Q2 2021
|
YTD
|
YTD
|
|
|
|
|
|
Net income
|
$
83,054
|
$
618,305
|
$
324,965
|
$
750,727
|
Adjustments:
|
|
|
|
|
Free rent
amortization
|
348
|
290
|
670
|
620
|
Amortization of other
assets
|
74
|
84
|
295
|
147
|
Fair value adjustment
to deferred unit compensation
|
(1,735)
|
885
|
(1,986)
|
1,100
|
Fair value adjustment
to loans receivable
|
—
|
(4,691)
|
—
|
(4,691)
|
Fair value adjustment
to investment properties
|
(45,390)
|
(588,797)
|
(255,102)
|
(693,645)
|
FFO(1)
|
$
36,351
|
$
26,076
|
$
68,842
|
$
54,258
|
|
|
|
|
|
FFO per
Unit(1)
|
$
0.192
|
$
0.155
|
$
0.375
|
$
0.323
|
|
|
|
|
|
Distributions declared
to Unitholders
|
$
27,283
|
$
23,379
|
$
52,856
|
$
46,042
|
Distributions per Unit
declared to Unitholders
|
$
0.144
|
$
0.139
|
$
0.285
|
$
0.274
|
Cash Distributions
paid
|
$
21,218
|
$
18,144
|
$
41,145
|
$
36,572
|
|
|
|
|
|
Regular FFO payout
ratio without DRIP benefit(1)
|
75.0 %
|
89.6 %
|
76.0 %
|
84.8 %
|
Regular FFO payout
ratio with DRIP benefit(1)
|
58.4 %
|
69.6 %
|
59.8 %
|
67.4 %
|
|
|
|
|
|
Weighted average number
of Units outstanding (in thousands)
|
189,677
|
168,147
|
183,750
|
167,986
|
Units issued and
outstanding at the end of the period (in thousands)
|
189,847
|
168,304
|
189,847
|
168,304
|
|
|
|
|
|
Other
items:
|
|
|
|
|
Straight-line rent
adjustment
|
$
(1,260)
|
$
(1,947)
|
$
(2,418)
|
$
(3,146)
|
Non-recoverable capital
expenditures
|
$
(1,144)
|
$
—
|
$
(1,990)
|
$
(386)
|
Leasing
costs
|
$
(4,002)
|
$
(2,789)
|
$
(8,367)
|
$
(5,476)
|
|
|
|
|
|
(1) FFO
includes strategic non-recurring mortgage prepayment costs of $4.0
million ($0.024 per Unit) for Q2 2021 and 2021 YTD. Excluding the
prepayment costs, FFO per Unit was $0.179 per Unit and $0.347 per
Unit for Q2 2021 and 2021 YTD, respectively. FFO payout ratio
without DRIP benefit excluding the prepayment costs was 77.8%
(60.4% including DRIP benefit) and 79.0% (62.8% including DRIP
benefit), respectively, for Q2 2021 and 2021 YTD.
|
Same Property NOI
In calculating same property NOI,
the impacts from the straight-lining of rents and amortization of
free rent have been excluded. Same property NOI excludes properties
that would have had changes due to acquisitions, dispositions and
redevelopments, as well as properties classified as held for
sale.
The following tables reconcile same property NOI to net rental
income for the periods presented:
|
|
|
|
Change
|
Change
|
|
GLA
|
Q2
2022
|
Q2 2021
|
($)
|
( %)
|
|
|
|
|
|
|
Ontario
|
10,267
|
$
21,656
|
$
19,128
|
$
2,528
|
13.2 %
|
Quebec
|
3,254
|
5,609
|
5,478
|
131
|
2.4 %
|
Alberta
|
5,229
|
12,370
|
12,188
|
182
|
1.5 %
|
Other Canada
|
42
|
98
|
94
|
4
|
4.3 %
|
Same property
NOI
|
18,792
|
$
39,733
|
$
36,888
|
$
2,845
|
7.7 %
|
|
|
|
|
|
|
Acquisitions/dispositions/redevelopments
|
2,799
|
6,191
|
2,622
|
3,569
|
|
Straight-line
rent
|
|
1,260
|
1,947
|
(687)
|
|
Free rent
amortization
|
|
(348)
|
(290)
|
(58)
|
|
Net rental
income
|
21,591
|
$
46,836
|
$
41,167
|
$
5,669
|
|
|
|
Q2
2022
|
Q2 2021
|
Change
|
Change
|
|
GLA
|
YTD
|
YTD
|
($)
|
( %)
|
|
|
|
|
|
|
Ontario
|
9,924
|
$
40,094
|
$
36,709
|
$
3,385
|
9.2 %
|
Quebec
|
3,254
|
11,073
|
10,935
|
138
|
1.3 %
|
Alberta
|
5,229
|
24,431
|
24,479
|
(48)
|
-0.2 %
|
Other Canada
|
42
|
196
|
193
|
3
|
1.6 %
|
Same property
NOI
|
18,449
|
$
75,794
|
$
72,316
|
$
3,478
|
4.8 %
|
|
|
|
|
|
|
Acquisitions/dispositions/redevelopments
|
3,142
|
12,431
|
5,098
|
7,333
|
|
Straight-line
rent
|
|
2,418
|
3,146
|
(728)
|
|
Free rent
amortization
|
|
(670)
|
(620)
|
(50)
|
|
Net rental
income
|
21,591
|
$
89,973
|
$
79,940
|
$
10,033
|
|
Available Liquidity
The REIT's available liquidity is
calculated as follows:
|
June
30
|
December 31
|
|
2022
|
2021
|
|
|
|
Unencumbered
assets
|
$
3,323,060
|
$
2,996,333
|
Assets required to
be reserved under unsecured debt agreements:
|
|
|
Senior unsecured
debentures(1)
|
(1,202,500)
|
(1,202,500)
|
Unsecured revolving
credit facility(2)
|
(520,000)
|
(390,000)
|
Green Unsecured
Development Credit Facility(3)
|
(260,000)
|
(130,000)
|
Unencumbered assets
available to be encumbered
|
1,340,560
|
1,273,833
|
Borrowing Capacity
on Unencumbered Assets(4)
|
$
737,308
|
$
700,608
|
|
|
|
Cash
|
117,202
|
16,052
|
Undrawn portion of
unsecured revolving credit facility(5)
|
372,000
|
300,000
|
Undrawn portion of
Green Unsecured Development Credit
Facility(5)
|
189,000
|
90,000
|
Borrowing capacity on
unencumbered assets (per above)
|
737,308
|
700,608
|
Available
Liquidity
|
$
1,415,510
|
$
1,106,660
|
|
|
|
(1)
Calculated as 1.3 times $925 million in aggregate senior unsecured
debentures outstanding.
|
(2)
Calculated as 1.3 times $400 million committed amount of unsecured
revolving credit facility (December 31, 2021 - $300
million).
|
(3)
Calculated as 1.3 times $200 million committed amount of Green
Unsecured Development Credit Facility (December 31, 2021 - $100
million).
|
(4)
Borrowing capacity is calculated as unencumbered assets available
to be encumbered multiplied by 55% loan-to-value.
|
(5) Includes
amounts drawn and letters of credit issued under the credit
facility agreements.
|
Financial Ratios
The REIT's interest coverage ratio,
debt service coverage ratio and debt-to-adjusted EBITDA are
calculated as follows:
|
|
|
Q2
2022
|
Q2 2021
|
|
Q2
2022
|
Q2 2021
|
YTD
|
YTD
|
|
|
|
|
|
Net income
|
$
83,054
|
$
618,305
|
$
324,965
|
$
750,727
|
Adjustments:
|
|
|
|
|
Free rent
amortization
|
348
|
290
|
670
|
620
|
Amortization of other
assets
|
74
|
84
|
295
|
147
|
Straight-lining of
rents
|
(1,260)
|
(1,947)
|
(2,418)
|
(3,146)
|
Fair value adjustment
to deferred unit compensation
|
(1,735)
|
885
|
(1,986)
|
1,100
|
Fair value adjustment
to loans receivable
|
—
|
(4,691)
|
—
|
(4,691)
|
Fair value adjustment
to investment properties
|
(45,390)
|
(588,797)
|
(255,102)
|
(693,645)
|
Finance
costs(1)
|
9,274
|
13,977
|
18,540
|
23,375
|
Adjusted
EBITDA
|
$
44,365
|
$
38,106
|
$
84,964
|
$
74,487
|
|
|
|
|
|
Adjustments to
finance costs:
|
|
|
|
|
Non-recurring mortgage
prepayment costs(1)
|
—
|
(3,974)
|
—
|
(3,974)
|
Interest expense
(finance costs) excluding adjustments
|
$
9,274
|
$
10,003
|
$
18,540
|
$
19,401
|
Interest
Coverage
|
4.8x
|
3.8x
|
4.6x
|
3.8x
|
|
|
|
|
|
Principal repayments
(excluding mortgage payouts)
|
$
2,913
|
$
4,116
|
$
5,464
|
$
9,249
|
Principal and interest
payments
|
$
12,187
|
$
14,119
|
$
24,004
|
$
28,650
|
Debt Service
Coverage
|
3.6x
|
2.7x
|
3.5x
|
2.6x
|
|
|
|
|
|
Non-current loans and
borrowings
|
$
1,321,456
|
$
1,224,303
|
$
1,321,456
|
$
1,224,303
|
Current loans and
borrowings
|
65,671
|
78,810
|
65,671
|
78,810
|
Total loans and
borrowings
|
1,387,127
|
1,303,113
|
1,387,127
|
1,303,113
|
Adjustments:
|
|
|
|
|
Unamortized premium on
debt
|
(1,803)
|
(2,478)
|
(1,803)
|
(2,478)
|
Unamortized deferred
financing charges
|
4,925
|
4,802
|
4,925
|
4,802
|
Total loans and
borrowings (principal outstanding)
|
$
1,390,249
|
$
1,305,437
|
$
1,390,249
|
$
1,305,437
|
Adjusted EBITDA per
above, annualized
|
$
177,460
|
$
152,424
|
$
169,928
|
$
148,975
|
Debt-to-Adjusted
EBITDA
|
7.8x
|
8.6x
|
8.2x
|
8.8x
|
|
|
|
|
|
(1) The REIT
incurred non-recurring mortgage prepayment costs of $4.0 million
during Q2 2021 on the strategic early repayment of $103.2 million
of secured term mortgages, which were recorded in finance
costs.
|
About Summit Industrial Income REIT
Summit Industrial
Income REIT is an unincorporated open-ended trust focused on
growing and managing a portfolio of light industrial properties in
key markets across Canada.
Summit's units are listed on the TSX and trade under the symbol
SMU.UN. For more information, please visit the REIT's website at
www.summitiireit.com.
Caution Regarding Forward Looking Information
This
news release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "objective", "ongoing",
"may", "will", "project", "should", "believe", "plans", "intends",
"goal" and similar expressions are intended to identify
forward-looking information or statements. More particularly and
without limitation, this news release contains forward looking
statements and information concerning the goal to build Summit's
property portfolio. The forward-looking statements and information
are based on certain key expectations and assumptions made by
Summit, including general economic conditions. Although Summit
believes that the expectations and assumptions on which such
forward-looking statements and information are based are
reasonable, undue reliance should not be placed on the
forward-looking statements and information because Summit can give
no assurance that they will prove to be correct. By its nature,
such forward-looking information is subject to various risks and
uncertainties, which could cause the actual results and
expectations to differ materially from the anticipated results or
expectations expressed, and given the impact of the COVID-19
pandemic and government measures to contain it, as well as the
current geopolitical environment, there is inherently more
uncertainty associated with the REIT's assumptions as compared to
prior periods. These risks and uncertainties include, but are not
limited to, tenant risks, current economic environment, including
disputes between nations, war and international sanctions,
environmental matters, general insured and uninsured risks and
Summit being unable to obtain any required financing and approvals.
Readers are cautioned not to place undue reliance on this
forward-looking information, which is given as of the date hereof,
and to not use such forward-looking information for anything other
than its intended purpose. Summit undertakes no obligation to
update publicly or revise any forward-looking information, whether
as a result of new information, future events or otherwise, except
as required by law.
SOURCE Summit Industrial Income REIT