WPT Industrial REIT announces strong performance in 2013
TORONTO, March 12, 2014 /CNW/ - WPT Industrial Real Estate Investment Trust (the "REIT") (TSX: WIR.U - OTCQX: WPTIF) announced today its financial and operating results for the three months ended December 31, 2013 and the period from March 4, 2013 to December 31, 2013.
The REIT had no material operations from the date of inception, March 4, 2013, to the completion of its IPO on April 26, 2013. Any comparisons of actual financial results to the REIT's financial forecast provided in its IPO Prospectus dated April 18, 2013, have been prorated to correspond with the period from April 26, 2013 to December 31, 2013 (the "Forecast"). All dollar amounts are stated in US funds.
2013 HIGHLIGHTS:
- Completed $114.3 million Initial Public Offering ("IPO") in April 2013
- Solid operating results since IPO
- Revenues, NOI and AFFO all exceed Forecast
- Occupancy remains strong at 96.4% as at December 31, 2013
- July 15, 2013 property acquisition makes strong and accretive contribution to earnings
- AFFO payout ratio down to 88.9% for the three months ended December 31, 2013
- Strong and flexible liquidity position with 52.9% debt-to-gross book value ratio
"We are pleased with our operating and financial results in 2013 as we expanded our portfolio and enhanced the performance of our properties," stated Scott Frederiksen, Chief Executive Officer. "Most importantly, our results in 2013 exceeded the Forecast published with our IPO, and we look for this growth and positive performance to continue going forward."
"As Canada's only publicly-traded real estate entity focused exclusively on the US industrial property sector, we believe we will continue to build value for our Unitholders as we benefit from a strengthening US economy, solid and stable industrial property fundamentals and, with our cash distributions paid in US dollars, an enhanced yield for Canadian investors should the US dollar strengthen over time," Mr. Frederiksen added.
SOLID OPERATING PERFORMANCE
Investment properties revenue was higher in the period from March 4, 2013 to December 31, 2013 than the Forecast due primarily to the contribution from an acquisition completed on July 15, 2013, vacancy loss factors assumed in the Forecast that were unrealized during the period, and favorable differences in actual recoverable expenses compared to amounts assumed in the Forecast.
Net Operating Income ("NOI") for the period from March 4, 2013 to December 31, 2013 was higher than the Forecast due to the contribution from the July 15, 2013 acquisition as well as vacancy loss factors assumed in the Forecast that were unrealized during the period..
Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO") for the period from March 4 2013 to December 31, 2013 were higher than the Forecast due primarily to the higher investment properties revenue and NOI as outlined above. FFO per Unit and AFFO per Unit amounts were lower than Forecast for the period from March 4, 2013 to December 31, 2013 due primarily to professional fees related to the July 15, 2013 acquisition and overall higher legal fees than assumed in the Forecast. The REIT's AFFO payout ratio, including the underwriters' over-allotment and general and administration expenses related to the Illinois property acquisition on July 15, 2013, was 94.4% for the period from March 4, 2013 to December 31, 2013. The AFFO payout ratio for the quarter ended December 31, 2013 was 88.9%.
STRONG FINANCIAL & LIQUIDITY POSITION
As at December 31, 2013 the REIT's debt-to-gross-book-value ratio was a conservative 52.9% with an interest coverage ratio of 3.2 times and a fixed charge coverage ratio of 2.8 times. The weighted average effective interest rate on its outstanding debt was 4.0% with a weighted average term to maturity of 6.2 years on its mortgages payable, well matched by the weighted average remaining lease term of 5 years. As at December 31, 2013 the REIT had approximately $16.8 million available on its $75 million revolving credit facility.
On August 12, 2013 the Toronto Stock Exchange approved the REIT's notice of intention to purchase and cancel its REIT Units pursuant to a Normal Course Issuer Bid ("NCIB"). As of December 31, 2013 the REIT had purchased and cancelled 697,800 REIT Units under its NCIB at a weighted average price of $8.14 per REIT Unit.
FINANCIAL AND OPERATIONAL HIGHLIGHTS
| (In thousands of USD, except where noted) | Three months ended December 31, 2013 |
Three months ended September 30, 2013 |
Period from March 4, 2013 to June 30, 2013 |
Period from March 4, 2013 to December 31, 2013 |
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| Operating Results: | |||||||||||||||||||
| Investment properties revenue | $ | 12,649 | $ | 12,577 | $ | 8,433 | $ | 33,659 | |||||||||||
| NOI (1), (2) | $ | 9,370 | $ | 9,370 | $ | 6,263 | $ | 25,003 | |||||||||||
| FFO (1), (3) | $ | 5,731 | $ | 5,686 | $ | 3,988 | $ | 15,405 | |||||||||||
| AFFO (1), (4) | $ | 4,680 | $ | 4,264 | $ | 2,957 | $ | 11,901 | |||||||||||
| FFO per Unit (1) | $ | 0.241 | $ | 0.236 | $ | 0.180 | $ | 0.659 | |||||||||||
| AFFO per Unit (1) | $ | 0.197 | $ | 0.177 | $ | 0.140 | $ | 0.509 | |||||||||||
| Distributions: | |||||||||||||||||||
| Distributions per Unit | $ | 0.175 | 0.175 | $ | 0.127 | $ | 0.477 | ||||||||||||
| Distributions declared | $ | 4,161 | $ | 4,234 | $ | 2,838 | $ | 11,233 | |||||||||||
| AFFO payout ratio (8) | 88.9% | 99.3% | 96.0% | 94.4% | |||||||||||||||
| Weighted-average number of Units (5) | 23,797,779 | 24,069,551 | 21,322,362 | 23,381,561 | |||||||||||||||
| As at | December 31, 2013 |
September 30, 2013 |
June 30, 2013 |
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| Operational Information: | |||||||||||||
| Number of real estate investment properties | 38 | 38 | 37 | ||||||||||
| GLA | 9,879,961 | 9,879,961 | 8,617,313 | ||||||||||
| Occupancy | 96.4% | 96.9% | 96.3% | ||||||||||
| Average remaining lease term (years) | 5.0 | 5.3 | 4.7 | ||||||||||
| Ratios: | |||||||||||||
| Weighted-average effective interest rate (6) | 4.0% | 4.0% | 4.3% | ||||||||||
| Debt-to-gross book value | 52.9% | 52.9% | 51.3% | ||||||||||
| Interest coverage ratio | 3.2x | 3.2x | 3.3x | ||||||||||
| Fixed charge coverage ratio | 2.8x | 2.8x | 2.9x | ||||||||||
| Debt to EBITDA (7) | 8.0x | 8.1x | 7.1x | ||||||||||
| Unit Information: | |||||||||||||
| REIT Units outstanding at period end | 10,732,200 | 10,750,200 | 11,430,000 | ||||||||||
| Class B Units outstanding at period end | 13,059,709 | 13,059,709 | 10,867,362 | ||||||||||
| Welsh Retained Interest at period end (on fully-diluted basis assuming all Class B Units held are redeemed for REIT Units) |
54.9% | 54.8% | 48.7% | ||||||||||
| (1) | NOI, FFO, AFFO, AFFO payout ratio and EBITDA are key measures of performance used by real estate operating companies, however, they are not defined by IFRS, do not have standard meanings and may not be comparable with other industries or trusts. This data should be read in conjunction with the "Non-IFRS Measures" section of the MD&A for the period from March 4, 2014 to December 31, 2013. | |||||||||||
| (2) | NOI is defined as investment properties revenue, less investment properties operating expenses. | |||||||||||
| (3) | The reconciliation of FFO to net income can be found in the MD&A for the period from March 4, 2013 to December 31, 2013. | |||||||||||
| (4) | The reconciliation of AFFO to FFO can be found in the MD&A for the period from March 4, 2013 to December 31, 2013. | |||||||||||
| (5) | Includes REIT Units and Class B Units (collectively, the "Units"). | |||||||||||
| (6) | Includes mortgages payable, bank indebtedness, mark-to-market adjustments and financing costs. | |||||||||||
| (7) | EBITDA is defined as NOI, less general and administrative expenses and is annualized for purposes of this metric. | |||||||||||
| (8) | Includes the impact of the underwriters' over-allotment issued on May 16, 2013 and the general and administrative expenses related to the July 15, 2013 acquisition. | |||||||||||
Actual Results Compared to Forecast
| For the three months ended December 31, 2013 |
For the period from March 4, 2013 to December 31, 2013 |
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| Actual | Forecast | Actual | Pro Rated Forecast |
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| Investment properties revenue | $ | 12,649 | $ | 11,211 | $ | 33,659 | $ | 30,974 | ||||||||||||||||
| NOI | $ | 9,370 | $ | 8,225 | $ | 25,003 | $ | 22,771 | ||||||||||||||||
| FFO | $ | 5,731 | $ | 5,276 | $ | 15,405 | $ | 14,759 | ||||||||||||||||
| AFFO | $ | 4,680 | $ | 3,973 | $ | 11,901 | $ | 10,982 | ||||||||||||||||
INVESTOR CONFERENCE CALL
A conference call will be hosted by the REIT's management team on Thursday, March 13, 2014 at 10:00 am ET. The telephone numbers to participate in the conference call are Canada Toll Free: (855) 669-9657, U.S. Toll Free (888) 317-6016 and International: (412) 317-6016. The live audio conference call will also be available as a webcast. To access the live audio webcast please access the link on the "Investors" page on our web site at www.wptreit.com. The telephone numbers to listen to the call after it is completed (Instant Replay) are Canada Toll Free (855) 669-9658, U.S. Toll Free (877) 344-7529 and International (412) 317-0088. The Passcode for the Instant Replay is 10039580#. A recording of the call will also be archived on the REIT's web site at www.wptreit.com.
About WPT Industrial Real Estate Investment Trust
WPT Industrial Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been formed to own and operate an institutional-quality portfolio of primarily industrial properties located in the United States, with a particular focus on warehouse and distribution industrial real estate. WPT Industrial, LP (the REIT's operating subsidiary) indirectly owns a portfolio of properties consisting of approximately 9.9 million square feet of gross leasable area, comprised of 36 industrial properties and two office properties located in 12 states in the United States. Welsh Property Trust, LLC is the external asset manager and property manager of the REIT. The REIT pays monthly cash distributions, currently at $0.0583 per Trust Unit, or approximately $0.70 per Trust Unit on an annualized basis, in US funds.
Forward-Looking Statements
This press release contains "forward-looking information" as defined under applicable Canadian securities law ("forward-looking information" or "forward-looking statements") which reflect management's expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words "plans", "expects", "does not expect", "scheduled", "estimates", "intends", "anticipates", "does not anticipate", "projects", "believes" or variations of such words and phrases or statements to the effect that certain actions, events or results "may", "will", "could", "would", "might", "occur", "be achieved" or "continue" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management of the REIT as of the date of this press release, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The REIT's estimates, beliefs and assumptions, which may prove to be incorrect, include the various assumptions set forth herein, including, but not limited to, the REIT's and the property's future growth potential, anticipated amounts of expenses, results of operations, future prospects and opportunities, the demographic and industry trends remaining unchanged, no change in legislative or regulatory matters, future levels of indebtedness, the tax laws as currently in effect remaining unchanged, the continual availability of capital, the current economic conditions remaining unchanged, and continued positive net absorption and declining vacancy rates in the markets in which the REIT's properties are located.
When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under "Risk Factors" in the REIT's final prospectus dated April 18, 2013, which is available under the REIT's profile on SEDAR at www.sedar.com. These forward-looking statements are made as of the date of this press release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE: WPT Industrial Real Estate Investment Trust
Scott Frederiksen, Chief Executive Officer
WPT Industrial Real Estate Investment Trust
Tel: (952) 897-7737
Fax: (952) 842-7737
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