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Partners Real Estate Investment Trust

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PAR.UN
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Partners Announces Results for the Third Quarter of 2017

TORONTO, Nov. 08, 2017 (GLOBE NEWSWIRE) -- Partners Real Estate Investment Trust (the “REIT,” or “Partners”) (TSX:PAR.UN) today announced its results for the three month period ended September 30, 2017 (the “third quarter”).

THIRD QUARTER 2017 HIGHLIGHT OF RESULTS

  • Net income of $1.8 million, a reduction of $1.5 million when compared to the third quarter of 2016, reflecting current quarter fair value losses of $1.3 million.
  • Total revenues from income producing properties of $12.6 million, a $1.4 million reduction when compared to the third quarter of 2016. This reduction in revenue is primarily the result of properties sold during December 2016 and June 2017.
  • Same Property NOI of $8.0 million, an increase of $0.4 million when compared with the third quarter of 2016.  All property NOI of $8.0 million, a decrease of $0.5 million when compared with the prior year period.
  • FFO and AFFO per unit of $0.08 and $0.06, compared to $0.09 and $0.06, respectively, for the third quarter of 2016.
  • ACFO payout ratio for the third quarter was 112%. The third quarter’s increased payout ratio is primarily a result of a timing difference between the closing of a rights offering and the repayment of the convertible debentures. The ACFO payout ratio for the 9-month period ended September 30, 2017 was 96%.
  • Occupancy of 95.4% as at September 30, 2017, an increase when compared to 95.1% as at December 31, 2016. 
  • As at September 30, 2017, the REIT had renewed a total of 236,712 square feet that were originally set to expire during 2017, representing approximately 84% of the expiring leases.
  • During the quarter, the REIT closed two re-financings for properties in Ontario.  The financings totalled $13.4 million and, after payout of the existing mortgages, provided $5.0 million in net proceeds.  These mortgages have 10-year terms at a weighted average contractual rate of 3.88%, replacing mortgages that carried a weighted average contractual rate of 4.81%.
  • During the quarter, the REIT closed a Rights Offering for $35.4 million through the issuance of 11.4 million units and repaid 100% of the Series II Convertible Debentures and 67% of the Series III convertible debentures leaving only $7.6 million in Series III Convertible Debentures remaining which matures in March 2018. 

 

      
      
  As at and for the three months ended As at and for the nine months ended
   Sep 30, 2017 
 Sep 30, 2016  Sep 30, 2017 
 Sep 30, 2016
Revenues from income producing properties                  $   12,641,504  $14,046,194        $   39,995,715  $42,387,006
Net income    1,768,671   3,337,970    3,302,834   9,061,905
Net income per unit - basic    0.04   0.10    0.09   0.27
NOI - same properties(1)    7,984,846   7,607,198    23,539,369   22,504,586
NOI - all properties(1)    7,984,846   8,506,735    24,921,205   25,168,146
FFO(1)(9)    3,275,535   2,990,587    9,686,197   8,386,303
FFO per unit(1)(9)    0.08   0.09    0.26   0.25
AFFO(1) (9)    2,477,573   2,028,996    7,241,432   5,450,009
AFFO per unit(1)(9)    0.06   0.06    0.19   0.16
ACFO(1)    2,572,319   1,472,607    7,486,085   4,967,684
Distributions(2)    2,883,352   2,126,305    7,179,487   6,358,186
Distributions per unit(2)    0.06   0.06    0.19   0.19
ACFO distribution payout ratio(3)  112.1%  144.4%  95.9%  128.0%
Cash distributions(4)    2,416,452   1,607,227    5,697,076   4,801,949
Cash distributions per unit(4)    0.06   0.05    0.15   0.14
      
As at   Sep 30, 2017 
 Dec 31, 2016 Dec 31, 2015
Total assets  $   472,847,722  $514,700,205 $520,970,422
Total debt(5)                                 278,897,859   354,556,805  364,550,117
Total equity     184,022,593   151,508,380  148,888,084
Weighted average units outstanding - basic     37,292,890   33,690,649  27,831,288
Weighted average units outstanding - diluted     37,392,473   33,690,649  27,831,288
Debt-to-gross book value including debentures(5)   58.7%  68.6%  69.5%
Debt-to-gross book value excluding debentures(5)   57.1%  57.5%  58.6%
Interest coverage ratio(6)     2.03   1.81  1.59
Debt service coverage ratio(6)     1.28   1.18  1.07
Mortgages weighted average effective interest rate(7)  4.17%  4.41%  4.57%
Portfolio occupancy(8)   95.4%  95.1%  94.6%

 

  1. NOI – same properties and all properties, FFO, AFFO and ACFO are non-IFRS financial measures widely used in the real estate industry.  See “Part II – Performance Measurement” in the REIT’s MD&A for further details and advisories.
  2. Represents distributions to unitholders on an accrual basis.  Distributions are payable as at the end of the period in which they are declared by the Board of Trustees, and are paid on or around the 15th day of the following month.  Distributions per unit exclude the 5% bonus units, or 3% bonus units for distributions with a record date after March 1, 2016, given to participants in the Distribution Reinvestment and Optional Unit Purchase Plan.
  3. Distribution payout ratio is a non-IFRS financial measure widely used in the real estate industry, calculated as total distributions as a percentage of ACFO. Management considers the distribution payout ratio a valuable metric to determine the sustainability of the REIT’s distribution. Non-IFRS measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other issuers. There is no directly comparable IFRS measure.
  4. Represents distributions on a cash basis, and as such, excludes the non-cash distributions of units issued under the Distribution Reinvestment and Optional Unit Purchase Plan.
  5. Debt-to-gross book value is a non-IFRS financial measure widely used in the real estate industry.  See calculation under “Debt-to-Gross Book Value” in “Part IV – Results of Operations” in the REIT’s MD&A. Management considers debt-to-gross book value to be a valuable metric in assessing the REIT’s overall leverage. Non-IFRS measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other issuers. There is no directly comparable IFRS measure.
  6. Interest coverage ratio and debt service coverage ratio are non-IFRS financial measures widely used in the real estate industry, calculated on a rolling four-quarter basis. See definition under “Mortgages and Other Financing” in “Part IV – Results of Operations” in the REIT’s MD&A. Management considers the interest coverage and debt service coverage ratios to be valuable metrics in assessing the REIT’s ability to make contractual payments on debt. Non-IFRS measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other issuers. There are no directly comparable IFRS measures.
  7. Represents the weighted average effective interest rate for secured debt excluding debentures and credit facilities.
  8. Portfolio occupancy is calculated as economic occupancy, not physical occupancy. A unit is considered occupied once it is committed to a lease with a minimum one-year term.
  9. Comparative figures have been reclassified to conform with the current year’s presentation.

“One of the REIT’s goals for 2017 was to reduce the leverage ratio.  This goal was achieved in Q3 resulting in an overall debt to gross book value at the end of the quarter of 58.7%.  As a result, the REIT’s leverage ratio is at its lowest level since 2010,” stated Jane Domenico, the REIT’s CEO. She added, “The year to date results reflect an improvement of over 4%, or $1 million growth in same property operating results over year to date Q3 2016.  This has improved our same property operating gross margin by 2.9%. These two achievements are a result of the support from our unitholders for the Rights Offering and the continued focus on our core real estate operations.  Finally, landlord construction for our two development projects have been substantially completed and the new SAQ at Place Desormeaux is now open to the public.”

Further Information

A more detailed analysis of the REIT's financial results for the third quarter of 2017 are included in the REIT's Management Discussion and Analysis and Condensed Consolidated Financial Statements, which have been filed on SEDAR and can be viewed at www.sedar.com or on the REITs' website at www.partnersreit.com.

Conference Call

Partners will host a conference call at 8:30 AM Eastern on Thursday, November 9, 2017, at which time Partners’ management will both review the financial results and discuss the REIT’s strategic outlook.

Conference Dial-In Details

Toll Free (North America): 800-377-0758
Local: 416-340-2216

Instant Replay Details (Available until November 16, 2017)

Toll Free (North America): 800-408-3053
Passcode: 1783922#

A recording of the conference call will also be available on Partners’ website.

About Partners REIT

Partners REIT is a growth-oriented real estate investment trust focused on the expansion and management of a portfolio of 34 retail and mixed-use community and neighbourhood shopping centres. These properties are located in both primary and secondary markets across British Columbia, Alberta, Manitoba, Ontario, and Quebec, and comprise a total of approximately 2.3 million square feet of leasable space.

Disclaimer

Certain statements included in this press release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect," "will" and similar expressions to the extent they relate to Partners REIT. The forward- looking statements are not historical facts but reflect Partners REIT's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including access to capital, regulatory approvals, intended acquisitions and general economic and industry conditions. Although Partners REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein.

For further information, please contact:
Partners REIT Investor Relations
1 (844) 474-9620 ext. 401
investor.relations@partnersreit.com

Partners REIT
Jane Domenico Chief Executive Officer
(416) 855-3313 ext. 401

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