Mr. Michel Leonard reports
A PORTFOLIO REPOSITIONED FOR THE FUTURE
BTB Real Estate Investment Trust has released its financial results for the second quarter ended June 30, 2019, and has presented highlights.
Highlights of the quarter ended June 30, 2019:
Increase of 3 per cent of the committed occupancy rate, from 90.1 per cent as at June 30, 2018, to 93.1 per cent at the end of the second quarter of 2019; close to 58,000 square feet of new leases were signed during the quarter (more than 125,000 square feet concluded since the beginning of the year);
Significant increase in same-property portfolio results:
Rental income: 4.6 per cent;
Net operating income: 4.8 per cent;
Net property income: 7.4 per cent;
Increase of 7.0 per cent in average lease renewal rate during the quarter and of 6.5 per cent since the beginning of the year; 230,000 square feet were renewed during the quarter (330,000 square feet since the beginning of the year);
Decrease of the mortgage debt ratio from 56.0 per cent in 2018 to 54.9 per cent at the end of the second quarter of 2019;
Increase of 7.4 per cent in rental income and 8.7 per cent in net operating income.
On May 10, 2019, the trust acquired a 65,000-square-foot industrial building in St-Laurent, Que., for $11.9-million.
On June 21, 2019, the trust purchased two properties, Mega Centre Saint-Bruno and Developpements Mont Saint-Hilaire, respectively, located in Saint-Bruno, Que., and Saint-Hilaire, Que., for $62.6-million.
Sale of properties:
- On May 7, 2019, the trust disposed of the property located on Antonio-Barbeau Street in Montreal, Que., for $7.1-million.
- On June 14, 2019, the trust completed an issuance of 6,157,100 units, including the overallotment option, at a price of $4.67 per unit, for approximately $27=million in proceeds net of issue costs.
Summary of significant items as at June 30, 2019:
Approximately 5.7 million leasable square feet;
$909-million total asset value;
$292-million market capitalization.
Message from Michel Leonard, president and chief executive officer
"Approximately 18 months ago, we began the process of repositioning our portfolio. The hard work paid off. We have almost completed our repositioning, and, together with the increase of our occupancy rate, our performance indicators are showing the positive effect of our strategy. Indeed, after having sold 11 buildings and acquiring six better-quality properties, BTB's recent acquisitions are now contributing to the bottom line. Our occupancy rate currently stands at 93.1 per cent. Our same-property NOI increased by 7.4 per cent, and we concluded lease renewals at an average increase of revenues of 7 per cent. Although we sold properties at capitalization rates higher than the properties purchased, the recently acquired properties are impacting positively our results. We are aware that during the repositioning, our performance suffered. However, as reflected in our second quarter financial results, we are beginning to see the effects of our strategy, and these positive indicators will lead to a better financial performance of the trust. Also, while implementing our portfolio repositioning, we reduced our mortgage debt ratio to 54.9 per cent, which was at 57.7 per cent for the same period in 2017. We have always been confident that our portfolio repositioning was the right long-term strategy for BTB."
(in thousands of dollars, except for ratios and per-unit data)
Quarter Six months
ended June 30, ended June 30,
2019 2018 2019 2018
Rental income $22,347 $20,803 $44,071 $42,243
Net operating income (1) 12,196 11,225 23,247 22,683
Net income and comprehensive income 3,316 4,593 4,697 11,148
Net property income from the same-property portfolio (1) 6,346 5,909 12,184 12,092
Distributable income (1) 5,550 5,522 20,113 16,571
Distributions 6,113 5,353 10,818 11,207
Funds from operations (FFO) (1) 5,446 5,279 11,994 11,015
Adjusted funds from operations (AFFO) (1) 4,884 4,937 9,507 10,158
Total assets 908,782 778,114
Total mortgage ratio 54.9% 56.0%
Weighted-average interest rate on mortgage debt 3.93% 3.82%
Market capitalization 291,937 257,462
Financial information per unit (in cents)
Net income and comprehensive income 5.8 9.3 8.3 22.7
Distributable income (1) 9.7 11.1 19.1 22.8
Distributions 10.5 10.5 21.0 21.0
Payout ratio on distributable income (1) 108.2% 94.5% 109.9% 92.0%
Recurring FFO (1) 9.5 10.6 17.9 22.4
Recurring AFFO (1) 8.5 9.9 16.8 20.7
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(1) Non-international financial reporting standard measure.
On Aug. 14, 2019, at 10 a.m. ET, management will hold a conference call to present BTB's financial results and performance for the second quarter 2019 ended on June 30, 2019.
Date: Aug. 14, 2019
Time: 10 a.m. Eastern Standard Time
Dial: 1-416-764-8609 (from Toronto and overseas), access code 09826423 followed by the number sign; 1-888-390-0605 (from North America toll-free), access code 09826423 followed by the number sign
To ensure your participation, please dial in 15 minutes prior to the start of the conference call.
Replay: from Aug. 14, 2019, at 1 p.m. until 11:59 p.m. on Aug. 21, 2019, dial 1-416-764-8677, conference ID No. 826423 followed by the number sign, or dial toll-free 1-888-390-0541, conference ID No. 826423 followed by the number sign
The media and all interested parties may attend the call in listening mode only.
Conference call operators will co-ordinate the question-and-answer period, and will instruct participants regarding the procedures for the call.
About BTB Real Estate Investment Trust
BTB is an important owner of properties in Eastern Canada. As at Aug. 13, 2019, BTB owns 67 retail, office and industrial properties for a total leasable area of approximately 5.7 million square feet and an approximate market value of $900-million. The objectives of BTB are: (i) to increase its revenues from its assets to increase distributable income and therefore finance distributions; (ii) to maximize the value of its assets through dynamic management of its properties to sustain the long-term value of its units; and (iii) to generate cash distributions that are fiscally beneficial to unitholders.
BTB offers a distribution reinvestment plan to unitholders whereby the participants may elect to have their monthly cash distribution reinvested in additional units of BTB at a price based on the weighted-average price for BTB's units on the Toronto Stock Exchange for the five trading days immediately preceding the distribution date, discounted by 3 per cent.
We seek Safe Harbor.
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