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Artis Real Estate Investment Trust Releases First Quarter Results

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Artis Real Estate Investment Trust Releases First Quarter Results

Canada NewsWire

WINNIPEG, May 10, 2018 /CNW/ - Today Artis Real Estate Investment Trust ("Artis" or the "REIT") issued its financial results and achievements for the three months ended March 31, 2018.  All amounts are in thousands of Canadian dollars unless otherwise noted.  Information in this press release should be read in conjunction with the REIT's consolidated financial statements and MD&A for the period ended March 31, 2018.

"Artis continues to diversify its portfolio and improve its balance sheet by selling properties at prices that equate to a NAV significantly higher than our current unit price," said Armin Martens, President and Chief Executive Officer of the REIT. "Artis' management continues to manage its portfolio in a patient and disciplined manner, so as to maximize unitholder value."

FIRST QUARTER HIGHLIGHTS

  • Raised $125.0 million of equity pursuant to the offering of 5,000,000 Series I preferred units at a price of $25.00 per unit, yielding 6.00% per annum.

  • Issued Series B floating rate senior unsecured debentures for gross proceeds of $200.0 million, bearing interest at the three month CDOR plus 107 basis points.

  • Completed the redemption of the outstanding Series C preferred units for US$75.0 million.

  • Disposed of one office property in the Greater Phoenix Area, Arizona and one industrial property in Winnipeg, Manitoba for sale prices of US$19.1 million and $1.9 million, respectively. The net IFRS gain on these properties in mixed dollars was $0.9 million.

  • Acquired the remaining 50% of two office properties in the Greater Denver Area, Colorado, for their IFRS value at December 31, 2017 of US$70.0 million, which was settled by the assumption of the existing mortgage financing and the issuance of 3,185,152 units through a private placement at $14.85 per unit.

  • Acquired 52.5 acres of land for the multi-phase development of approximately one million square feet of industrial real estate in Houston (Bayport), Texas, for US$8.8 million. Phase I is expected to total 520,000 square feet and is 100% leased for a 12.5-year term. Construction of Phase I will commence in Q2-18.

  • Stabilized Same Property NOI in Canadian dollars increased 1.0% for the quarter ended March 31, 2018. Same Property NOI for the total portfolio in Canadian dollars, including the Calgary office segment and properties planned for disposition and re-purposing, decreased 1.6% for the quarter ended March 31, 2018.

  • Weighted-average rental rate on renewals that commenced during the quarter ended March 31, 2018, increased 2.7%, excluding the Calgary office segment, and increased 1.1% including the Calgary office segment.

  • Reported a Proportionate Share normalized EBITDA interest coverage ratio of 3.26 for the quarter ended March 31, 2018, compared to 3.20 for the quarter ended March 31, 2017.

  • Decreased Proportionate Share total debt to GBV to 48.9% at March 31, 2018, compared to 49.3% at December 31, 2017, and reported Proportionate Share total debt to normalized EBITDA of 8.5 at March 31, 2018, compared to 8.4 at December 31, 2017.

  • Increased NAV per unit to $15.03 at March 31, 2018, from $14.86 at December 31, 2017.

  • Reported normalized FFO per unit of $0.33 for the quarter ended March 31, 2018, compared to $0.36 for the quarter ended March 31, 2017. The change was primarily due to the disposition of properties and an increase in preferred distributions related to the Series I preferring unit offering, partially offset by the repayment of debt to improve Artis' overall liquidity.

  • Decreased the Proportionate Share unhedged variable rate mortgage debt to total debt to 16.4% at March 31, 2018, compared to 17.1% at December 31, 2017.

SELECTED FINANCIAL INFORMATION




Three months ended March 31,

$000's, except per unit amounts


2018



2017


% Change







Revenue


$

125,769



$

133,557


(5.8)%

Property NOI


74,965



80,278


(6.6)%

Net income


50,722



77,016


(34.1)%

Distributions per common unit


0.27



0.27


—%







FFO


$

42,347



$

54,853


(22.8)%

FFO per unit


0.28



0.36


(22.2)%

Normalized FFO (1)


50,764



54,853


(7.5)%

Normalized FFO per unit (1)


0.33



0.36


(8.3)%

Normalized FFO payout ratio (1)


81.8%



75.0%


6.8%











AFFO


$

29,580



$

40,750


(27.4)%

AFFO per unit


0.19



0.27


(29.6)%

Normalized AFFO (1)


37,997



40,750


(6.8)%

Normalized AFFO per unit (1)


0.25



0.27


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