CT REIT Reports Strong Second Quarter 2019 Results

• Announces key conditional agreements and a commitment to increase its ownership in Canada Square mixed-use complex to 50%
• Delivers 3.3% growth in AFFO per unit for the second quarter

TORONTO, July 31, 2019 /CNW/ - CT Real Estate Investment Trust (CT REIT) (TSX: CRT.UN) today reported its consolidated financial results for the second quarter ended June 30, 2019.

CT REIT Reports Strong Second Quarter 2019 Results (CNW Group/CT Real Estate Investment Trust (CT REIT))

"CT REIT once again delivered attractive growth in the second quarter. As well, we completed key milestones for the redevelopment of the Canada Square mixed-use complex, located at Yonge and Eglinton in Toronto, including a conditional extended and amended ground lease with the Toronto Transit Commission and a conditional lease agreement with Canadian Tire Corporation for a new head office building to anchor Phase I of the redevelopment," said Ken Silver, President and Chief Executive Officer, CT REIT. "We are also pleased to announce a commitment to increase the REIT's ownership interest in the complex to 50%, with a closing expected prior to year end."

New Investment Activity

Today, CT REIT announced new investments, which will require an estimated total investment of $29 million. The investments are, in the aggregate, expected to earn a weighted average cap rate of 6.5% when completed and represent approximately 163,000 square feet of incremental gross leasable area ("GLA"). CT REIT is funding these investments through the issuance of Class B LP Units and/or Class C LP Units to Canadian Tire Corporation, Limited ("CTC"), cash and/or draws on its credit facility or any combination thereof.

The table below summarizes the new investments and anticipated completion dates:

Property	Type	GLA (sf.)	Timing	Activity
Sault Ste Marie, ON	Vend-in	99,000	Q4 2019	Vend-in of existing Canadian Tire store and Canadian Tire Gas+ gas bar
North Battleford, SK	Vend-in	38,000	Q4 2019	Vend-in of existing Canadian Tire store
Fenelon Falls, ON	Intensification	26,000	Q4 2020	Expansion of an existing Canadian Tire Store

Update on Previously Announced Investments

CT REIT invested $44 million in previously disclosed investments that were completed in the second quarter. These projects include the development of a new Canadian Tire store located in Sherwood Park, AB, the vend-in of two properties located in Matane, QC and Minden, ON that each contain a Canadian Tire store and a Canadian Tire Gas+ gas bar, the intensification of a Canadian Tire store in Huntsville, ON and the development of third-party pads at three existing properties.

The table below provides activity updates on the previously announced investments.

Property	Type	GLA (sf.)	Timing	Activity
Sherwood Park North, AB	Development	120,000	Q2 2019	Development of a Canadian Tire Store
Matane, QC	Vend-in	53,000	Q2 2019	Existing Canadian Tire store and Canadian Tire Gas+ gas bar
Minden, ON	Vend-in	29,000	Q2 2019	Existing Canadian Tire store and Canadian Tire Gas+ gas bar
Huntsville, ON	Intensification	10,000	Q2 2019	Expansion of an existing Canadian Tire Store
Various	Intensifications	14,000	Q2 2019	Development of third- party pads at three existing properties

Update on Canada Square

CT REIT and Oxford Properties ("Co-Owners") have entered into a conditional Consolidated, Amended and Restated Ground Lease with the Toronto Transit Commission that provides the terms upon which the co-owners can proceed with planning for the redevelopment of the Canada Square Complex ("Complex"). The ground lease provides for an extension of the term together with a renewal option and incorporates an additional two acres of land once the conditions have been satisfied, which will bring the total land area of the Complex to approximately nine acres. A conditional lease agreement has also been entered into with CTC for a new head office building to anchor Phase I of the redevelopment.

Each Co-Owner has also committed to increase their respective ownership interest in the Complex from 33% to 50%, with a closing expected prior to year end.

Financial and Operational Summary

Summary of Selected Information
(in thousands of Canadian dollars, except unit, per unit and square footage amounts)	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018		Change^7	2019		2018		Change^7
Property revenue	$	121,994	$	118,880	2.6 %	$	243,558	$	235,499	3.4 %
Net operating income ^1	$	91,473	$	87,259	4.8 %	$	181,412	$	172,583	5.1 %
Net income	$	78,720	$	74,744	5.3 %	$	150,165	$	147,258	2.0 %
Net income per unit - basic ^2	$	0.357	$	0.350	2.0 %	$	0.681	$	0.689	(1.2)%
Net income per unit - diluted ^3	$	0.297	$	0.282	5.3 %	$	0.572	$	0.557	2.7 %
Funds from operations^1	$	64,284	$	62,501	2.9 %	$	127,719	$	121,824	4.8 %
Funds from operations per unit - diluted (non-GAAP) ^1,2,4	$	0.291	$	0.292	(0.3)%	$	0.579	$	0.569	1.8 %
Adjusted funds from operations ^1	$	55,023	$	51,536	6.8 %	$	109,047	$	101,441	7.5 %
Adjusted funds from operations per unit - diluted (non-GAAP) ^1,2,4	$	0.249	$	0.241	3.3 %	$	0.494	$	0.474	4.2 %
Distributions per unit - paid ^2	$	0.189	$	0.182	4.0 %	$	0.379	$	0.364	4.0 %
AFFO payout ratio^1	76 %		76 %		— %	77 %		77 %		—%
Cash generated from operating activities	$	80,647	$	84,286	(4.3)%	$	170,307	$	164,999	3.2 %
Adjusted cashflow from operations ^1	$	56,784	$	52,964	7.2 %	$	108,503	$	97,854	10.9 %
Weighted average number of units outstanding ^2
Basic	220,522,443		213,829,341		3.1 %	220,422,379		213,797,151		3.1 %
Diluted ^3	322,289,800		325,446,368		(1.0)%	322,189,766		325,408,860		(1.0)%
Diluted (non-GAAP) ^1,4	220,748,545		214,008,265		3.1 %	220,648,511		213,970,757		3.1 %
Indebtedness ratio						44.0 %		46.2 %		NM
Interest coverage (times)	3.35		3.38		NM	3.35		3.34		NM
Gross leasable area (square feet) ^5						27,136,124		26,271,296		3.3 %
Occupancy rate ^5,6						98.7 %		98.7 %		NM

¹Non-GAAP measure. Refer to section 10.0 of the MD&A for further information.

²Total units means Units and Class B LP Units outstanding.

³Diluted units determined in accordance with IFRS includes restricted and deferred units issued under various plans and the effect of assuming that all of the Class C LP Units will be settled with Class B LP Units. Refer to section 7.0 of the MD&A.

⁴Diluted units used in calculating non-GAAP measures include restricted and deferred units issued under various plans and exclude the effect of assuming that all of the Class C LP Units will be settled with Class B LP Units. Refer to section 7.0 of the MD&A.

⁵Refers to retail, mixed-use commercial and distribution centre properties and excludes Properties Under Development.

⁶Occupancy and other leasing key performance measures have been prepared on a committed basis which includes the impact of existing lease agreements contracted on or before June 30, 2019 and June 30, 2018.

⁷NM - not meaningful.

Financial Highlights

Net Income – Net income was $78.7 million for the quarter, an increase of 5.3% compared to the same period in the prior year primarily due to increased NOI resulting from investment activity and an increase in the fair market value adjustment on investment properties, partially offset by an increase in net interest and other financing charges.

Net Operating Income (NOI)* – NOI was $91.5 million for the quarter, which was $4.2 million or 4.8% higher compared to the same period in the prior year (after excluding expenses related to ground rent which are no longer included in NOI as a result of the adoption of IFRS 16 – Leases), in part due to the acquisition of income-producing properties and Properties Under Development completed in 2019 and 2018, which contributed $1.4 million to NOI growth. Same store NOI and same property NOI for the quarter increased $2.5 million or 2.9% and $2.9 million or 3.3%, respectively, when compared to the prior year primarily due to contractual rent escalations, recovery of capital expenditures and interest earned, the impact of tenancy changes at 11 Dufferin Place SE and 25 Dufferin Place SE Calgary, AB and intensifications completed in 2019.

Funds from Operations (FFO)* – FFO for the quarter was $64.3 million or $0.291 per unit - diluted (non-GAAP), which was $1.8 million (2.9%) higher or $0.001 (0.3%) per unit - diluted (non-GAAP) lower than the same period in the prior year, primarily due to the impact of NOI variances, discussed earlier, partially offset by higher interest expense and an increase in the number of units outstanding.

Adjusted Funds from Operations (AFFO)* – AFFO for the quarter was $55.0 million or $0.249 per unit - diluted (non-GAAP), which was $3.5 million (6.8%) or $0.008 (3.3%) per unit - diluted (non-GAAP) higher than the same period in the prior year, primarily due to the impact of NOI variances, discussed earlier, partially offset by higher interest expense.

Adjusted Cashflow From Operations - ACFO for the quarter increased by $3.8 million or 7.2% over the same period in 2018 primarily due to the impact of NOI variances, discussed earlier, partially offset by higher interest expense.

Distributions – Distributions per unit in the quarter amounted to $0.189, 4.0% higher than the same period in the prior year due to the increase in the annual rate of distributions effective with the first distribution paid in 2019.

*NOI, FFO and AFFO are non-GAAP measures. Refer to Section 10 in the Q2 2019 Management's Discussion & Analysis, which is available on SEDAR at www.sedar.com and at www.ctreit.com.

Operating Results

Leasing – CTC is CT REIT's most significant tenant. At June 30, 2019, CTC represented approximately 93.1% of total GLA and 92.4% of annualized base minimum rent.

Occupancy – At June 30, 2019, CT REIT's portfolio occupancy rate, on a committed basis, was 98.7%.

Management Discussion and Analysis (MD&A) and Unaudited Condensed Consolidated Financial Statements and Notes

Information in this press release is a select summary of results. This press release should be read in conjunction with CT REIT's MD&A for the period ended June 30, 2019 and Unaudited Condensed Consolidated Financial Statements and Notes for the period ended June 30, 2019, which are available on SEDAR at www.sedar.com and at www.ctreit.com.  

To view a PDF version of CT REIT's second quarter 2019 results, please see: https://mma.prnewswire.com/media/954855/CT_Real_Estate_Investment_Trust__CT_REIT__CT_REIT_Reports_Strong.pdf

Forward–Looking Statements

This document contains forward-looking information that reflects management's current expectations related to matters such as future financial performance and operating results of CT REIT. Forward-looking statements are provided for the purposes of providing information about CT REIT's future outlook and anticipated events or results. Readers are cautioned that such information may not be appropriate for other purposes.

All statements other than statements of historical facts included in this document may constitute forward–looking information, including but not limited to, statements concerning the REIT's ability to complete any of the investments in acquisitions and property intensifications and developments  under the headings "New Investment Activity" and "Update on Previously Announced Investments" and investments and agreements under the heading "Update on Canada Square", the timing and terms of any such investments and/or agreements and the benefits expected to result from such investments and other statements concerning developments, redevelopments, intensifications, results, performance, achievements, prospects or opportunities for CT REIT. Forward-looking information is based on reasonable assumptions, estimates, analyses, beliefs and opinions of management made in light of its experience and perception of prospects and opportunities, current conditions and expected trends, as well as other factors that management believes to be relevant and reasonable at the date such information is provided.

By its very nature forward-looking information requires us to make assumptions and is subject to inherent risks and uncertainties, which give rise to the possibility that the REIT's assumptions, estimates, analyses, beliefs and opinions may not be correct and that the REIT's expectations and plans will not be achieved. Although the forward-looking information contained in this press release is based on information, assumptions and beliefs which are reasonable and complete, this information is necessarily subject to a number of factors that could cause actual results to differ materially from management's expectations and plans as set forth in such forward-looking information.

For more information on the risks, uncertainties and assumptions that could cause the REIT's actual results to differ from current expectations, refer to Section 4 "Risk Factors" of our Annual Information Form for fiscal 2018, and to Section 11 "Enterprise Risk Management" and all subsections thereunder of our 2018 Management's Discussion and Analysis, as well as the REIT's other public filings, available at www.sedar.com and at www.ctreit.com.

The forward-looking statements and information contained herein are based on certain factors and assumptions as of the date hereof. CT REIT does not undertake to update any forward-looking information, whether written or oral, that may be made from time to time by it or on its behalf, to reflect new information, future events or otherwise, except as is required by applicable securities laws.

Information contained in or otherwise accessible through the websites referenced in this press release (other than CT REIT's profile on SEDAR at www.sedar.com) does not form part of this press release and is not incorporated by reference into this press release. All references to such websites are inactive textual references and are for information only.

Additional information about CT REIT has been filed electronically with various securities regulators in Canada through SEDAR and is available at www.sedar.com and at www.ctreit.com.

Conference Call

CT REIT will conduct a conference call to discuss information included in this news release and related matters at 9:00 a.m. ET on August 1, 2019. The conference call will be available simultaneously and in its entirety to all interested investors and the news media by dialing 416-340-2216 or 1-800-377-0758 or through a webcast at https://www.ctreit.com/English/news-and-events/events-and-webcasts/default.aspx, and will be available through replay for 12 months.

About CT Real Estate Investment Trust

CT Real Estate Investment Trust (TSX:CRT.UN) is an unincorporated, closed-end real estate investment trust formed to own income-producing commercial properties primarily located in Canada. Its portfolio is comprised of over 325 properties totalling approximately 27 million square feet of GLA, consisting primarily of retail properties located across Canada. Canadian Tire Corporation, Limited is CT REIT's most significant tenant. For more information, visit www.ctreit.com.

SOURCE CT Real Estate Investment Trust (CT REIT)

Media: Jane Shaw, 416-480-8581, [email protected]; Investors: Marina Davies, 416-544-6134, [email protected]