NPR Reports Year End 2011 Results

CALGARY, March 13, 2012 /CNW/ - Northern Property REIT and NorSerCo Inc. (TSX: NPR.UN) announced its financial results for the 3 and 12 months ended December 31, 2011.  The Financial Statements and MD&A for the entities are reported on a combined basis at SEDAR.com under Northern Property Real Estate Investment Trust.

HIGHLIGHTS:

• Vacancy loss declines to 3.7% from 4.5% same quarter last year
• 12 month FFO per stapled unit increases to $2.35 from $2.16 for previous year
• 65.3% FFO payout ratio for the year
• Development a key component of growth strategy
• Progress taking place on seniors dispositions

Financial Performance at a Glance

(Thousands of dollars except per unit amounts)	Three Months Ended December 30		Year Ended December 30
Total Operations	2011	2010	2011	2010
Total revenue	42,576	36,002	158,661	139,750
Net operating income	26,192	23,761	103,076	91,964
Net and comprehensive earnings (loss)	33,249	58,880	86,157	(23,948)
Net and comprehensive earnings (loss)	$1.13	$2.15	$3.01	($0.93)
per stapled unit, basic
FFO from operations	17,536	13,597	67,421	55,523
FFO per stapled unit, basic	$0.59	$0.50	$2.35	$2.16
FFO payout ratio	64.3%	76.2%	65.3%	70.0%
Distributions	11,257	9,729	43,533	21,287
Distributions per stapled unit	$0.383	$0.383	$1.530	$1.501

"NPR's property portfolio continued to generate good financial results in Q4", said Jim Britton, NPR's President and CEO.  "Our annual net operating income exceeded $100 million for the first time and produced a record $2.35 of FFO per unit.  Our FFO payout ratio for the year was very solid at 65.3%. "

Apartment vacancy remained generally firm throughout Q4 of 2011 recording a vacancy loss of 3.7%.  Same door growth was essentially flat at 0.2% compared to the same quarter a year ago, in part due to some one-time costs such as a higher level of property manager performance pay being recorded and 20 suites in Yellowknife being down due to fire for part of the quarter.

On the acquisitions front, the REIT closed on 240 units in Saskatoon, 33 units in Courtenay near Nanaimo and 53 in Labrador City for an aggregate cost of $26.3 million.  Subsequent to the end of the quarter closing took place on 48 units in Nanaimo, 39 units in Gander and on a 29,500 square foot commercial building in St. John's for a total of $12.9 million.

NPR has 87 apartments nearing completion in Iqaluit and development approval for another 39.  While no final decisions have been taken, an office building and warehouse complex are being considered for commencement in 2012 on Iqaluit lands acquired in the Nova transaction in 2011.  Development approval has been obtained for 58 new units in Yellowknife and NPR hopes to commence development of 142 units in Lloydminster.  Longer term, development lands are being obtained in Regina and Labrador City.

"On the subject of NPR's SIFT status", Mr. Britton said, "the Federal Government still has not enacted its rules respecting the 10% non-qualifying income exemption.  Our stapled structure protects our REIT status, albeit with a cost associated with double taxation.  As soon as we see legislation on the details respecting REIT qualifying income and stapled structures which hopefully will be in the March budget, we will address the appropriate structuring."

The REIT expects to sell most of its master leased seniors' building in Newfoundland over the next few months.  The first such closing on the Newfoundland seniors' property took place on March 5, 2012.  NPR has engaged Brookfield Financial to consider its strategic options respecting its master leased seniors' properties in Western Canada.  As a consequence of that exercise, NPR expects to enter into a conditional agreement to sell these properties.  It should be noted that completion of the sale is subject to conditions beyond the normal property due diligence conditions, and, if all conditions are satisfied, the closing would not be expected to be completed prior to June 2012.  There can be no assurance that NPR will complete the sale of these properties to this purchaser.

As required by IFRS, the REIT has "marked to market" the value of its seniors' holdings based upon negotiations, appraisals and expressions of interest since announcing its decision to review the future of these investments in 2011.  The overall value of NPR's seniors holdings appear to be in line with their acquisition costs with some declines in value of the Newfoundland assets being offset by some value improvements in the west.

"Development and acquisition activity is steady," Mr. Britton said, "but it is one building at a time so far in 2012.  The pricing of in place real estate assets, particularly apartments, is very high at the moment.  It is now a distinct alternative to develop new buildings in under-supplied markets.  NPR's strategy is to do more development in the future."

Forward-Looking Statements

This news release contains forward‐looking statements relating to our growth strategy, purchasing activity, completion of apartments for which development approvals have been obtained, commencement of development of new buildings, federal rules respecting the 10% qualifying exemption for REITs, sale of our master leased seniors building in Newfoundland and the results of our strategic review of our western seniors' portfolio.  These statements are not guarantees of future events, performance or results and will not necessarily be accurate indications of whether, or the times at which, such events, performance or results will be achieved.

Forward-looking statements are based on information available at the time they are made, underlying estimates and assumptions made by management and management's good faith belief with respect to future events, performance and results, and are subject to inherent risks and uncertainties surrounding future expectations generally which could cause actual results to differ materially from what is currently expected. Such risks and uncertainties include, but are not limited to risks associated with investment in and development of real property, competition, financing and refinancing risks, risks related to economic conditions, changes in taxation rules, reliance on key personnel, environmental matters, tenant risks, and other risk factors more particularly described in the our most recent Annual Information Form available on SEDAR at www.sedar.com.  Additional risks and uncertainties not presently known to NPR or that NPR currently believes to be less significant may also adversely affect NPR.

Readers are cautioned that the above list of factors is not exhaustive and that should certain risks or uncertainties materialize, or should underlying estimates or assumptions prove incorrect, actual events, performance and results may vary significantly from those expected. There can be no assurance that the actual results, performance, events or activities anticipated by NPR will be realized or, even if substantially realized, that they will have the expected consequences to, or effect on, NPR.  Readers, therefore, should not place undue importance on forward-looking information.  Further,  forward‐looking statements speak only as of the date on which such statements are made.  NPR disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

David Leiman, CFO  403-692-5550