Welcome!

News Feed Item

Melcor REIT Announces Second Quarter Results

EDMONTON, ALBERTA -- (Marketwired) -- 08/06/14 --



---------------------------------------------------------------------------
Quarter Highlights                    Year-to-date Highlights

- Rental revenue of $11.12 million    - Rental revenue of $21.77 million,
  for growth of 14% over Q2-2013        exceeding YTD-2013 by 12%

- Net operating income of $7.20       - Net operating income of $13.93
  million for growth of 13% over Q2-    million for growth of 10% over YTD-
  2013                                  2013

- Adjusted funds from operations      - Adjusted funds from operations
  (AFFO) of $3.90 million or $0.19      (AFFO) grew 10% to $7.68 million or
  per unit compared to $0.19 per unit   $0.39 per unit compared to $0.37
  in Q2-2013                            per unit YTD-2013

- Debt to Gross Book Value (GBV)      - Occupancy at 92.0% compared to
  ratio of 46%, below our target        90.6% at the end of 2013
  range of 50-55%

- Gross leasable area increased by 4% - Distributions of $0.05625 per unit
  through 3 property acquisitions       per month paid YTD
---------------------------------------------------------------------------

Melcor REIT (TSX: MR.UN) announced results for the second quarter and first half of 2014, which ended June 30, 2014. Year-to-date rental revenue increased 12% to $21.77 million compared to $19.46 million in the first half of 2013. Adjusted funds from operations (AFFO) grew 10% to $7.68 million or $0.39 per unit for the first half of 2014.

Darin Rayburn, CEO of Melcor REIT commented: "We continue to execute our strategy and deliver as promised. Throughout the first half of 2014, we've increased our portfolio GLA by 9% through a number of external acquisitions as well as our first acquisition via the Melcor pipeline, which is unique to Melcor REIT. Our focus on leasing activity has been successful as well, with 77% of our expiring GLA renewed by the end of June. This contributed to an increase in occupancy and strong results overall.

We are pleased with our performance to date and will continue to take a disciplined and focused approach to achieving our objectives."

Financial Highlights for the quarter include:


--  On May 7, 2014 we successfully completed a bought deal issuance of
    1,900,000 trust units at $10.65 for gross proceeds of $20.24 million.
    The underwriters subsequently exercised their over allotment option for
    an additional 245,000 trust units at $10.65 for gross proceeds of $2.61
    million. The proceeds were used in part to fund two property
    acquisitions from Melcor, with the remainder used to pay down our
    revolving credit facility to support future acquisitions and for general
    trust purposes.

--  We continued to execute on our growth strategy and increased gross
    leasable area (GLA) by 4% to 1,837,439 sq. ft.

    --  We made our first acquisition via our proprietary Melcor pipeline,
        purchasing two multi-tenant retail properties for a purchase price
        of approximately $13.50 million (excluding transaction costs). The
        properties include Market Mall, a 42,586 sq. ft. retail community
        strip centre in Regina, Saskatchewan and phase three of Kingsview
        Market, a 11,555 sq. ft. retail complex in Airdrie.

    --  We acquired 107 Avenue Building, a 23,432 sq. ft. office building in
        Edmonton, Alberta for a purchase price of $5.55 million (excluding
        transaction costs).

--  We continue to focus on property management and asset enhancement
    initiatives in order to maintain and improve our assets. These
    initiatives led to improved occupancy and retention rates during the
    second quarter, with period end rates of 92.0% and 78.3% respectively.

--  We have achieved strong leasing activity year-to-date, with 71,754 sq.
    ft. in new leasing. 76.8% of the GLA expiring in 2014 was renewed at
    June 30, 2014.

The successful execution of these strategies contributed to:


--  Revenue growth of 14% over Q2-2013 as a result of our expanded
    portfolio. Weighted average base rent (per sq. ft.) and occupancy
    remained steady during the period. Higher revenue translated into
    increased NOI, which grew by 13% over Q2-2013. Direct operating expenses
    increased by 15%, primarily as a result of the new property additions in
    conjunction with timing and allocation differences in the comparative
    period.

--  FFO and AFFO of $4.43 million and $3.90 million, an 8% increase over Q2-
    2013. FFO and AFFO per unit were $0.22 and $0.19 respectively, and
    consistent over Q2-2013. Growth in FFO and AFFO was offset by the
    dilutive impact of the trust unit issuance during the period. We
    continue to pursue third party acquisition opportunities and monitor
    properties in the Melcor development pipeline to support future growth.

--  Distributions of $0.05625 per trust unit were paid in April, May and
    June. Distributions made during Q2-2014 represent a payout ratio of 89%.

--  As at June 30, 2014 we have funds available under our revolving credit
    facility, providing the REIT with the near term capacity to capitalize
    on future acquisition opportunities.

Selected Quarter Highlights



----------------------------------------------------------------------------
Financial Highlights
----------------------------------------------------------------------------
                      Three months ended          Six months ended
                            June 30                    June 30
----------------------------------------------------------------------------
($000s)                    2014     2013   delta%     2014     2013   delta%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Non-standard KPIs
Net operating income
 (NOI)                    7,203    6,379      13%   13,937   12,721      10%
Funds from operations
 (FFO)                    4,431    4,109       8%    8,719    8,104       8%
Adjusted funds from
 operations (AFFO)        3,902    3,604       8%    7,679    6,991      10%

Rental revenue           11,119    9,773      14%   21,766   19,461      12%
Income before fair
 value adjustments and
 taxes                    2,125    2,488    (15)%    4,264    5,905    (28)%
Fair value adjustment
 on investment
 properties                 568    1,792    (68)%      737    4,386    (83)%
Distributions to
 unitholders              1,782    1,027      74%    3,323    1,027     224%
Cash flows from
 operations               1,806    2,105    (14)%    4,102    9,141    (55)%

Per unit metrics(1)
Income - diluted           0.22     0.10     120%     0.43     0.10     330%
FFO                        0.22     0.22     (1)%     0.45     0.43       5%
AFFO                       0.19     0.19       -%     0.39     0.37       5%
Distributions             0.169    0.113      50%    0.338    0.113     199%


----------------------------------------------------------------------------
($000s)                        30-Jun-14         31-Dec-13            delta%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total assets ($000s)             476,468           454,743                5%
Equity ($000s)(2)                216,852           186,608               16%
Debt ($000s)(3)                  207,522           215,601              (4)%
Weighted average
 interest rate on debt             3.97%             3.98%                -%
Debt to GBV ratio                    46%               51%             (10)%
Finance costs coverage
 ratio(4)                           2.95              2.96                -%
Debt service coverage
 ratio(5)                           2.82              2.83                -%


----------------------------------------------------------------------------
Operational Highlights
----------------------------------------------------------------------------
($000s)                       30-June-14         31-Dec-13                r%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
  Number of properties                32                29               10%
   Gross leasable area
       (GLA) (sq. ft.)         1,837,439         1,691,920                9%
 Occupancy % (weighted
               by GLA)             92.0%             90.6%                2%
 Retention % (weighted
               by GLA)             78.3%             75.5%                4%
      Weighted average
  remaining lease term
               (years)              4.65              4.75              (2)%
 Weighted average base
    rent (per sq. ft.)            $16.23            $16.63              (2)%

(1)   The comparative 2013 figures are calculated as if the trust units and
      Class B LP Units which were issued in 2013 were outstanding during the
      entire comparative period.

(2)   Calculated as the sum of trust units and Class B LP Units at their
      book value.

(3)   Calculated as the sum of total amount drawn on revolving credit
      facility, mortgages payable and Class C LP Units, excluding
      unamortized fair value adjustment on Class C LP Units, unamortized
      transaction costs and unamortized discount on bankers acceptance.

(4)   Calculated as the sum of FFO and finance costs; divided by finance
      costs, excluding distributions on Class B LP Units.

(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 Q2-2014 report to unitholders, including the consolidated financial statements and management's discussion and analysis for the three- and six-months ended June 30, 2014 which can be found on the REIT's website at www.MelcorREIT.ca or on SEDAR (www.sedar.com).

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 Canadian markets. Its portfolio is currently made up of interests in 32 properties representing approximately 1.84 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.

Non-Standard Measures

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 reconciled in the REIT's Management Discussion and Analysis for the period ended June 30, 2014, which is available on SEDAR at www.sedar.com.

Forward-Looking Statements

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.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
In recent years, containers have taken the world by storm. Companies of all sizes and industries have realized the massive benefits of containers, such as unprecedented mobility, higher hardware utilization, and increased flexibility and agility; however, many containers today are non-persistent. Containers without persistence miss out on many benefits, and in many cases simply pass the responsibility of persistence onto other infrastructure, adding additional complexity.
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend @CloudExpo | @ThingsExpo, June 6-8, 2017, at the Javits Center in New York City, NY and October 31 - November 2, 2017, Santa Clara Convention Center, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
SYS-CON Events announced today that CA Technologies has been named "Platinum Sponsor" of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and 21st International Cloud Expo, which will take place in November in Silicon Valley, California.
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
Back in February of 2017, Andrew Clay Schafer of Pivotal tweeted the following: “seriously tho, the whole software industry is stuck on deployment when we desperately need architecture and telemetry.” Intrigue in a 140 characters. For me, I hear Andrew saying, “we’re jumping to step 5 before we’ve successfully completed steps 1-4.”
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists will examine how DevOps helps to meet th...
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain.
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTred processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Analytic. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...