Morguard Real Estate Investment Trust Announces 2018 Annual Results

MISSISSAUGA, ON, Feb. 13, 2019 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to announce its 2018 annual results.  These results have been prepared in accordance with International Financial Reporting Standards ("IFRS").

FOR THE YEAR ENDED DECEMBER 31

In thousands of dollars, except per unit amounts	2018		2017
Revenue from real estate properties	$276,473		$278,754
Net operating income	152,078		157,025
Fair value (losses)/gains on real estate properties	(18,602)		(31,225)
Net income	73,015		67,306
Funds from operations	94,992		100,766
Amounts presented on a per unit basis
Net income
Basic	$1.20		$1.11
Diluted	$1.12		$1.05
Funds from operations
Basic	$1.56		$1.66
Diluted	$1.48		$1.57
Cash distributions per unit	$0.96		$0.96

The Trust is pleased to report that the following retail development projects have been completed in 2018:

Property	Portfolio	New GLA	Redeveloped GLA	Project Cost		Comments
Shoppers Mall	Enclosed regional centres	13,000	—	$4,891		Construction of new freestanding pad space for Cara brand restaurants
Market Square	Community strip centres	9,700	—	4,753		Construction of new freestanding pad space
Cambridge Centre	Enclosed regional centres	—	126,800	24,740		Anchor tenant remerchandising of former Target space for Marshalls, Kingpin Cambridge, Sport Check, and Indigo (excludes $3.8 million cost to complete for 18,400 GLA)
Shoppers Mall	Enclosed regional centres	—	34,000	10,749		Anchor tenant remerchandising of remaining former Target space for Shoppers Drug Mart and Ardene
		22,700	160,800	$45,133

Annual net operating income has decreased 3.2% to $152.1 million in 2018 as compared to $157.0 million in 2017. This decrease is due to the closure of three anchor premises formerly leased to Sears which closed in late 2017/early 2018 and is offset by incremental net operating income from either new or redeveloped GLA in the amount of 474,000 square feet which has come on stream in either 2017 or 2018.

Fair value losses have decreased 40.8% to $18.6 million in 2018 as compared to $31.2 million in 2017.

Interest expense has increased 1.0% to $55.6 million in 2018 from $55.1 in 2017 due to higher short-term interest rates in 2018.

Net income has increased to $73.0 million in 2018 ($1.20 per unit) as compared to $67.3 million in 2017 ($1.11 per unit).

Funds from operations has decreased to $95.0 million in 2018 ($1.56 per unit in 2018) as compared to $100.8 million in 2017 ($1.66 per unit).

Cash distributions per unit remain unchanged at $0.96 per unit in both 2018 and 2017.

Net operating income for the three months ended December 31, 2018 has decreased to $40.4 million in 2018 as compared to $41.6 million in 2017 due to a decrease of $0.9 million in lease cancellation fees.

The Trust expects a further 161,500 in either new or redeveloped GLA to be completed in the first half of 2019 at three locations - Pine Centre Mall, Parkland Mall and The Centre.

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).  The Trust presents FFO in accordance with the Real Property Association of Canada white paper on funds from operations and adjusted funds from operations for IFRS issued February 2018.  FFO is a non-GAAP measure that is widely accepted as a supplemental measure of financial performance for real estate entities.  In accordance with such white paper, the Trust defines FFO as net income adjusted for fair value changes on real estate properties and gains/(losses) on the sale of real estate properties.

Financial Statements and Management's Discussion and Analysis

The Trust's Q4 2018 Consolidated Financial Statements and Management's Discussion and Analysis will be made available on the Trust's website at www.morguard.com and have been filed with SEDAR at www.sedar.com

Conference Call Details:

Date:	Thursday, February 14, 2019 at 4:00 p.m. (ET)
Conference Call #:	416-764-8688 or 1-888-390-0546
Conference ID #:	82114761

About Morguard Real Estate Investment Trust

The Trust is a closed-end real estate investment trust, which owns a diversified portfolio of 49 retail, office and industrial income producing properties in Canada with a book value of $3.0 billion and approximately 8.6 million square feet of leasable space.

SOURCE Morguard Real Estate Investment Trust

Morguard Real Estate Investment Trust: K. Rai Sahi, President and Chief Executive Officer, T 905-281-4800; Andrew Tamlin, Chief Financial Officer, T 905-281-4800

Related Links

http://www.morguardreit.com