Morguard Real Estate Investment Trust announces 2015 first quarter results

TSX: MRT.UN

MISSISSAUGA, ON, May 6, 2015 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to announce its financial results for the three months ended March 31, 2015 ("Q1"). These results have been prepared in accordance with International Financial Reporting Standards ("IFRS").

Highlights

• Funds from operations ("FFO") for Q1 2015 was $27.2 million, up $1.2 million from the $26.0 million reported for the same period in 2014.
• On a per unit diluted basis, FFO for Q1 2015 was $0.42, as compared to $0.41 reported for the same period in 2014.
• Net operating income for Q1 2015 was $42.4 million, up $0.8 million from the $41.6 million recorded for the same period in 2014.
• Acquisitions of Citadel West and 301 Laurier Avenue in 2014 add $0.3 million to net operating income for Q1 2015.
• The disposition of 350 Sparks and 361 Queen in Q1 2015 and Cedar Pointe Business Park in July 2014, along with other assets re-classified to "held for sale", reduces net operating income by $0.7 million. However, this net operating income was replaced by operational improvements and non-recurring lease cancelation fees in the remaining portfolio totaling $1.2 million.
• The 2014 re-financing program continues to reduce interest on overall debt levels by $0.2 million, during the three months ended March 31, 2015.  As at March 31, 2015, the weighted average interest rate remained stable at 4.2%.

Funds from operations is not a term defined under IFRS and may not be comparable to similar measures used by other Trusts. A reconciliation of net income to funds from operations is included.

At March 31, 2015, the Trust's debt consisted of $1.2 billion of fixed-rate debt with weighted average interest rate of 4.2% and weighted average term to maturity of 5.57 years, $146.8 million of 4.85% fixed-rate convertible debentures and $11.6 million debt associated with real estate properties held for sale.  The Trust has a debt to total assets ratio of 44.5%.

• On February 17, 2015, the Trust completed the sale of 350 Sparks and 361 Queen to Morguard Corporation, for a total price of $37.7 million. The transaction included an assumption of the existing mortgage debt of $17.8 million, resulting in net proceeds of $19.7 million, after selling costs.
• On March 2, 2015, the Trust entered into an agreement to sell 5591-5631 Finch for a total price of $10.0 million. On April 1, 2015, the Trust completed the sale of this property for net proceeds of $3.3 million, after settlement of mortgage and selling costs.
• On December 10, 2014, the Trust entered into an agreement to sell 20-24 Lesmill for a total price of $6.4 million. On April 16, 2015, final conditions of this sale were waived with an expected closing date in May 2015.
• The Trust's 2015 NCIB participation to-date totals 21,106 units, which were purchased for cancellation.

NET OPERATING INCOME, FUNDS FROM OPERATIONS
This press release and accompanying financial information make reference to net operating income and funds from operations on a total and per unit basis.  Net operating income is defined as income from property operations after operating expenses have been deducted, but prior to deducting interest expense, general and administrative expenses and fair value gains/(losses).  Funds from operations is defined as net income prior to extraordinary items, valuation adjustments, and certain other non-cash items, if any.

FINANCIAL STATEMENTS AND MORGUARD'S DISCUSSION AND ANALYSIS
Morguard REIT's Q1 2015 Condensed Interim Consolidated Financial Statements and Management's Discussion and Analysis along with its 2014 Annual Report are available on Morguard REIT's website at www.morguard.com and have been filed with SEDAR at www.sedar.com

CONFERENCE CALL DETAILS:

Date:                            Friday, May 8, 2015 at 12:00 p.m. (ET)
Conference Call#:          647.427.7450 or 1.888.231.8191
Conference ID#:             30355375

ABOUT MORGUARD REAL ESTATE INVESTMENT TRUST
Morguard REIT is a closed-end real estate investment trust, which owns a diversified portfolio of 49 retail, office and mixed-use income producing properties in Canada with a book value of $2.9 billion and approximately 8.6 million square feet of leaseable space.

Condensed Interim Consolidated Balance Sheets

(In thousands of Canadian dollars)	March 31,	December 31,
	2015	2014
Assets
Real estate properties	$     2,871,136	$     2,866,235
Equity-accounted investments	31,008	30,770
Amounts receivable	48,323	42,635
Other assets	7,373	1,054
Cash and cash equivalents	13,202	12,612
	2,971,042	2,953,306
Real estate properties held for sale	25,550	63,190
	$     2,996,592	$     3,016,496
Liabilities
Mortgages payable	$     1,173,966	$     1,182,456
Convertible debentures payable	146,837	146,541
Accounts payable and other liabilities	55,593	45,761
Bank indebtedness	—	4,927
	1,376,396	1,379,685
Mortgages payable on real estate properties held for sale	11,629	29,730
Total liabilities	1,388,025	1,409,415
Unitholders' Equity	1,608,567	1,607,081
	$     2,996,592	$     3,016,496

Condensed Interim Consolidated Statements of Income and Comprehensive Income

(In thousands of Canadian dollars)
For the three months ended March 31,		2015	2014
Revenue from real estate properties		$     74,542	$     74,204
Property operating expenses		29,792	30,184
Property management fees		2,362	2,409
Net operating income		42,388	41,611
Interest expense		15,041	15,412
General and administrative		1,159	1,229
Other income		(175)	—
Income before fair value (losses)/gains and net income from equity-accounted investments		26,363	24,970
Fair value (losses)/gains on real estate properties, net		(11,167)	10,248
Net income from equity-accounted investments		827	1,055
Net income for the period		$     16,023	$     36,273
Other comprehensive income
Items to be reclassified to profit or loss in   subsequent periods:
	Amortization – cash flow hedge	255	251
Comprehensive income		$     16,278	$      36,524

Reconciliation of Net Income to Funds from Operations

(In thousands of Canadian dollars, except per-unit amounts)
For the three months ended March 31,		2015	2014
Net income for the period		$   16,023	$   36,273
Add/(deduct) :
Fair value (losses)/gains on real estate properties^(1)		11,151	(10,233)
Basic funds from operations		$   27,174	$   26,040
Interest expense on convertible debentures		1,794	1,794
Diluted funds from operations		$   28,968	$   27,834
Funds from operations per unit:
	Basic	$0.44	$0.42
	Diluted^(2)	$0.42	$0.41
Weighted average units outstanding (in thousands)
	Basic	62,170	62,225
	Diluted^(2)	68,267	68,322

(1) Includes fair value (losses)/gains from equity-accounted investments
(2) Includes dilutive impact of convertible debentures

SOURCE Morguard Real Estate Investment Trust

K. (Rai) Sahi, President and Chief Executive Officer, Tel: [phone], or; Pamela McLean, Chief Financial Officer, Tel: [phone].

Related Links

http://www.morguardreit.com