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

--  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
Successful digital transformation requires new organizational competencies and capabilities. Research tells us that the biggest impediment to successful transformation is human; consequently, the biggest enabler is a properly skilled and empowered workforce. In the digital age, new individual and collective competencies are required. In his session at 19th Cloud Expo, Bob Newhouse, CEO and founder of Agilitiv, will draw together recent research and lessons learned from emerging and established ...
November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Penta Security is a leading vendor for data security solutions, including its encryption solution, D’Amo. By using FPE technology, D’Amo allows for the implementation of encryption technology to sensitive data fields without modification to schema in the database environment. With businesses having their data become increasingly more complicated in their mission-critical applications (such as ERP, CRM, HRM), continued ...
SYS-CON Events announced today that Enzu will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to focus on the core of their online busine...
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Established in 1998, Calsoft is a leading software product engineering Services Company specializing in Storage, Networking, Virtualization and Cloud business verticals. Calsoft provides End-to-End Product Development, Quality Assurance Sustenance, Solution Engineering and Professional Services expertise to assist customers in achieving their product development and business goals. The company's deep domain knowledge of Storage, Virtualization, Networking and Cloud verticals helps in delivering ...
SYS-CON Events announced today that Cloudbric, a leading website security provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Cloudbric is an elite full service website protection solution specifically designed for IT novices, entrepreneurs, and small and medium businesses. First launched in 2015, Cloudbric is based on the enterprise level Web Application Firewall by Penta Security Sys...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
In the next five to ten years, millions, if not billions of things will become smarter. This smartness goes beyond connected things in our homes like the fridge, thermostat and fancy lighting, and into heavily regulated industries including aerospace, pharmaceutical/medical devices and energy. “Smartness” will embed itself within individual products that are part of our daily lives. We will engage with smart products - learning from them, informing them, and communicating with them. Smart produc...
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
SYS-CON Events announced today that Coalfire will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Coalfire is the trusted leader in cybersecurity risk management and compliance services. Coalfire integrates advisory and technical assessments and recommendations to the corporate directors, executives, boards, and IT organizations for global brands and organizations in the technology, cloud, health...
In his session at 19th Cloud Expo, Claude Remillard, Principal Program Manager in Developer Division at Microsoft, will contrast how his team used config as code and immutable patterns for continuous delivery of microservices and apps to the cloud. He will show the immutable patterns helps developers do away with most of the complexity of config as code-enabling scenarios such as rollback, zero downtime upgrades with far greater simplicity. He will also have live demos of building immutable pipe...
SYS-CON Events announced today that Transparent Cloud Computing (T-Cloud) Consortium will exhibit at the 19th International Cloud Expo®, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The Transparent Cloud Computing Consortium (T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data proces...
The Internet of Things (IoT), in all its myriad manifestations, has great potential. Much of that potential comes from the evolving data management and analytic (DMA) technologies and processes that allow us to gain insight from all of the IoT data that can be generated and gathered. This potential may never be met as those data sets are tied to specific industry verticals and single markets, with no clear way to use IoT data and sensor analytics to fulfill the hype being given the IoT today.