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Press release from CNW Group

Agellan Commercial Real Estate Investment Trust Releases First Quarter Results

Tuesday, May 07, 2013

Agellan Commercial Real Estate Investment Trust Releases First Quarter Results

15:18 EDT Tuesday, May 07, 2013

This news release contains forward-looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained within this press release.

TORONTO, May 7, 2013 /CNW/ - AGELLAN COMMERCIAL REAL ESTATE INVESTMENT TRUST (THE 'REIT") (TSX: ACR.UN) is pleased to report its results for the interim period that commenced January 25, 2013, the date of its initial public offering ("IPO"), and ended March 31, 2013. The REIT had no operations prior to January 25, 2013.   For 2013 the REIT will be comparing its results to the 2013 Forecast of Financial Information ("FOFI") disclosed in the REIT's offering prospectus dated January 17, 2013 ("Prospectus") which is available on the SEDAR website at www.sedar.com.

Highlights of the Quarter:

  • Completed the IPO of 13.5 million units of the REIT ("Units") on January 25, 2013 for gross proceeds of $134.6 million, concurrently acquiring 23 office, industrial and retail assets in major markets in Canada and the United States.
  • On February 27, 2013, the REIT issued a further 313,097 units resulting in net proceeds of $2.2 million pursuant to the exercise of the over-allotment option granted to the underwriters of the IPO.
  • Transaction costs in line with IPO budget.
  • Lower than anticipated initial draw on credit facility and favourable interest swap rate resulting in interest savings.
  • Attractive leverage ratios of 54.3% debt-to-gross book value and 3.3 times interest coverage ratio.
  • Continued focus on strong acquisition pipeline, including potential transactions currently in due diligence.
  • Distributions of $0.144 per Unit declared for the period from IPO closing to the end of March ($0.775 per unit on an annualized basis).
  • In aggregate, renewal and new leasing rents in line with expectations.
  • Portfolio occupancy rate of 91.3% is in line with expectations.
  • Early renewal of 92,618 s.f. tenant in Columbus Ohio resulting in an increased weighted average lease term of 4.6 years.
  • Quarterly operating results and AFFO ahead of forecast.

Senior management will host a conference call to discuss the results on on Wednesday, May 8, 2013 at 3:00 p.m. EST. In order to participate, please dial 1-416-340-2217 or 1-866-696-5910 and enter participant pass code: 6534422. You will be required to identify yourself and the organization on whose behalf you are participating. For operator assistance during the call, please press *0.

If you cannot participate on May 8, 2013, a replay of the conference call will be available by dialing 1-905-694-9451 or 800-408-3053 and entering participant pass code: 1334019. The replay will be available until May 22, 2013.

"The closing of the IPO was a key milestone for the REIT" said Frank Camenzuli, CEO.   "Our operating results are meeting expectations and our prospects for accretive growth are very strong.  With our in-place credit facility and the support of the public equity markets, the REIT is well positioned to achieve its objectives of creating unit holder value through growth by way of acquisitions and through maximizing net income from the existing portfolio."

in 000's                                        
Summary of Financial Information       66 days ending March 31, 2013
        Actual               Pro-rated
Forecast
              Variance
                                         
Total property and property related revenue       $10,455               $10,398               $57
Net Operating Income ("NOI")       $6,286               $6,109               $177
Funds from Operations ("FFO")       $4,081               $3,846               $235
Adjusted Funds from Operations ("AFFO")       $2,928               $2,808               $120
                                         
Basic FFO per unit       $0.212               $0.198               $0.014
Basic AFFO per unit       $0.152               $0.145               $0.007
Distributions per unit       $0.144               $0.144               $0.000
                                         
Payout Ratio       95.3%                                
Units outstanding at period-end:                       19,402                                
Weighted average Units outstanding                       19,246                                
                                         

The REIT ended its first quarter with a debt ratio of 54.3%, comprised of a combination of fixed and floating rate debt.  The weighted average interest rate on the REIT's debt is 3.9%. Refinancing is not a primary focus of 2013, with no mortgages maturing during the year, and no debt scheduled to mature until 2015.  The REIT has $20 million of its credit facility undrawn.

Gross Book Value $450,335
Debt $244,463
Debt to Gross Book Value 54.3%
Interest coverage Ratio                      3.3
Weighted average mortgage interest rate 3.9%
   

Other information

Information appearing in this news release is a select summary of results. The consolidated financial statements along with management's discussion and analysis for the REIT are available at www.agellancommercialreit.com and on www.sedar.com.

The REIT 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 created for the purpose of acquiring and owning industrial, office and retail properties in select major urban markets in the United States and Canada.

The REIT's current portfolio aggregates approximately 4.2 million square feet of gross leasable area in 23 properties. The properties are primarily located in Texas, Ontario and the U.S. Midwest. The REIT's portfolio is well diversified by geographic location, asset class and tenant mix.

Non-IFRS supplemental measures

NOI, FFO and AFFO are key measures of performance used by real estate operating companies; however, they are not defined by International Financial Reporting Standards ("IFRS"), do not have standard meanings and may not be comparable with other industries or income trusts. These Non-IFRS measures are more fully defined and discussed in the REIT's Management Discussion and Analysis for the period ended March 31, 2013, which is available on SEDAR at www.sedar.com.

Forward looking information

This press release may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, general and local economic and business conditions; the financial condition of tenants; the REIT's ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest and currency rate functions. The REIT's objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable, interest rates remain stable, conditions within the real estate market remain consistent, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forward-looking information in this press release speaks as of the date of this press release. The REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise. Additional information about these assumptions and risks and uncertainties is contained in the REIT's filings with securities regulators, including its latest annual information form and MD&A. 

 

SOURCE: Agellan Commercial Real Estate Investment Trust

For further information:

Derek Dermott
President
(416) 593-6800 ext 269
ddermott@agellancapital.com

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