Whiterock REIT Announces 2009 Third Quarter Results
HIGHLIGHTS -
- Solid FFO - FFO was $3.7 million or $0.78 per unit for the three
months ended September 30, 2009. This represents a 93.7% FFO cash
payout ratio for the three months ended September 30, 2009 and 91.8%
for the nine months ended September 30, 2009.
- Ongoing AFFO - AFFO for the three months ended September 30, 2009 was
$3.3 million or $0.70 per unit.
- Success in Renewing Tenants - Finished 2009 leasing with 21% increase
in rates. Re-leased 52% of leases up for renewal in 2010 with 28%
rate increases.
- Excellent Financial Flexibility - Issued $10.9 million of equity and
renewed $42 million in credit facilities in a difficult financing
environment. Subsequent to September 30, 2009, issued $23 million of
new convertible debentures.
- High Quality Acquisition Pipeline - Over $11 million equity invested
in properties providing in place AFFO yield in excess of 20% by
acquiring managed interests in a 394,000 square foot industrial
building in Regina Saskatchewan and a 411,000 square foot Class A
office building in Toronto, Ontario. Entered into a binding agreement
to acquire a managed interest in a 51,000 square foot government
tenanted building in Fredericton, New Brunswick.
- Investment Grade Tenants on Long-Term Leases - 57% of revenues were
from government and other investment grade tenants. Average lease
term of the portfolio is 7.6 years, providing strong cash flow
stability.
- Secure Top Ten Tenants - Average remaining lease term of top ten
tenants, all investment grade and representing 43.7% of revenue, is
10.9 years.
- Long-Term Fixed Rate Debt - Average 6.4 year term for mortgage debt
at a weighted average interest rate of 5.7%, all at fixed rates.
- Geographically Balanced Portfolio - At September 30, 2009, 16% of the
portfolio's property operating income was in Alberta, 17% in
Saskatchewan, 29% in Ontario, 27% in Quebec and 11% in Atlantic
Canada.
- Yield - Distribution yield of 12.1% annualized, based on per unit
distribution for the three months ended September 30, 2009, totaling
$0.42, and the November 6, 2009 Unit closing price of $13.89 (after
taking into account the 2-for-1 unit split effective November 6,
2009).
- Tax Efficient Distributions - 100% of the distributions made in 2008,
2007 and 2006 were classed as return of capital for tax purposes.
Given the recent economic environment and potential acquisition opportunities as a result of the recession, Whiterock has bolstered its cash and facility reserves compared to a year ago. Whiterock currently has approximately
The impact of its uninvested funds together with short-term tenant vacancies at two properties totaling approximately 49,500 square feet adversely affected both FFO and AFFO in the third quarter. Management expects these impacts to be short-term in nature as both vacancies were filled by
"I continue to be excited about Whiterock's future. While our FFO and AFFO were impacted by the increased liquidity that was not fully invested in the quarter, we are very comfortable with our financial position. Our nine month FFO payout ratio on cash distributions is 92% and lease rate increases in 2010 continue to average 28% to date. Whiterock continues to be an investment with solid value, a secure distribution and growth potential," said Whiterock CEO
FINANCIAL HIGHLIGHTS
(including discontinued operations, except as noted)
Three months ended Three months ended
(in $000's except per unit data) September 30, 2009 September 30, 2008
-------------------------------------------------------------------------
Total revenue - continuing
operations 15,364 14,758
Property operating income
- continuing operations 9,343 9,334
Funds from operations (FFO) 3,699 4,036
FFO per Unit
- basic 0.78 1.04
- diluted 0.78 0.99
Adjusted funds from
operations (AFFO) 3,288 3,324
AFFO per Unit
- basic 0.70 0.86
- diluted 0.68 0.81
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Balance sheet highlights for Whiterock as at September 30, 2009 and
December 31, 2008 are as follows:
(in $000's) September 30, 2009 December 31, 2008
-------------------------------------------------------------------------
Investment in real estate
assets(1) 448,316 437,710
Mortgages payable and facilities 279,552 284,154
Convertible debentures
(face value) 55,410 55,410
Unitholders' equity 78,109 80,069
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Excludes $7.3 million of mortgages receivable secured by real estate
assets at December 31, 2008.
Selected financial ratios for Whiterock as at, and for the nine months
ended, September 30, 2009 and 2008 are as follows:
September 30, 2009 September 30, 2008
-------------------------------------------------------------------------
Weighted average fixed mortgage
rate 5.7% 5.5%
Weighted average debenture rate 6.8% 6.8%
Interest coverage ratio (1) 1.7 1.9
Occupancy level(2) 96.0% 98.3%
FFO cash payout ratio(3) 92% 72%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Interest coverage for the period is calculated based on property
operating income and income from equity investments less G&A, divided
by interest expense (including debentures and financing fee
amortization) net of interest and other income.
(2) Includes leases executed to date.
(3) FFO cash payout ratio is calculated as cash distributions divided by
FFO for the nine months ended September 30, 2009.
In the nine months ended
Whiterock's financial results primarily reflect accretive acquisitions, the impact of new leases and rent escalations, partially offset by the impact of the increased liquidity generated from new mortgages and equity as these funds were not invested for the full period, by temporary vacancies and by provisions related to vacancies.
FFO and AFFO are supplemental non-GAAP financial measures used by the real estate industry to measure and compare the operating performance of real estate organizations. Whiterock's method of calculating FFO and AFFO may be different from methods used by other REITs or corporations. A description of Whiterock's calculation of FFO and AFFO is included in Whiterock's Management's Discussion and Analysis for the three and nine months ended
CONFERENCE CALL
Whiterock invites you to participate in its conference call with senior management on
You may participate in the live conference by calling 416-800-1066 or toll free at 1-866-221-4491 To ensure your participation, please call five minutes prior to the scheduled start of the call. The call will be archived on Whiterock's website and available after the call.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of applicable securities legislation. These forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect" "estimate", "anticipate", "intend", "believe" or "continue", the negative forms thereof and similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. These statements are not guarantees of future events or performance and, by their nature, are based on Whiterock's estimates and assumptions, which are subject to known and unknown risks, uncertainties and other factors that may cause the actual events, results or prospects to be materially different from those expressed or implied herein. Readers are cautioned that a number of factors, including those discussed in the section entitled "Risk Factors" in Whiterock's Annual Information Form which can be obtained at www.sedar.com, could cause actual events, results or prospects to differ materially from those stated or implied. These factors should be considered carefully, and a reader should not place undue reliance on forward-looking statements, as there can be no assurance that actual events, results or prospects will be consistent with such statements. In particular, but without limitation, there can be no assurance that Whiterock will be to able to increase its AFFO. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a less robust leasing environment than has been seen for the last several years; relatively stable interest costs; an increase in acquisition capitalization rates and more limited access to equity and debt capital markets to fund, at acceptable costs, Whiterock's growth plans, and to enable Whiterock to refinance its debts as they mature. Except as required by law, Whiterock does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
The Toronto Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
%SEDAR: 00022234E
For further information: www.whiterockreit.ca; Frank Bucys, CFO, (416) 907-4864; Jennifer Kosloski, (416) 979-3026
Share this article