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Press release from Marketwire

Retrocom REIT Announces Second Quarter 2013 Results and Second Anchor Tenant at Creekside Crossing

Thursday, August 08, 2013

Retrocom REIT Announces Second Quarter 2013 Results and Second Anchor Tenant at Creekside Crossing

18:30 EDT Thursday, August 08, 2013

TORONTO, ONTARIO--(Marketwired - Aug. 8, 2013) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY NON-CANADIAN SOURCE

Retrocom Real Estate Investment Trust (TSX:RMM.UN) (the "REIT") today announced results for the second quarter ended June 30, 2013. The REIT also announced that an agreement has been reached with Costco as a second anchor tenant for Creekside Crossing, their joint-venture site in Mississauga.

Highlights

  • Acquired twelve investment properties for $193 million consisting of approximately 965,000 square feet of gross leasable area.
  • On August 8, 2013, the REIT announced that it had waived due diligence conditions on the purchase of a portfolio of two properties from SmartCentres Realty Inc. and Wal-Mart Canada Realty Inc. for approximately $61.6 million.
  • Raised $101 million through a public offering and a private placement of trust units and convertible debentures.
  • Costco Wholesale Canada Ltd. ("Costco") has entered into a lease for approximately 150,000 square feet for a term of 20 years (with additional renewal options). Costco will compliment an already impressive mix of tenants at Creekside Crossing that includes Walmart Supercentre, TD Canada Trust, Royal Bank, and LCBO. Costco is expected to open in late 2013.
  • Net operating income increased 16.4% and 15.3%, respectively for the three and six months ended June 30, 2013, compared with the comparative periods in 2012.
  • FFO, adjusted increased by 19.4% to $6.7 million for the three months ended June 30, 2013 and by 31.0% to $13.9 million for the six months ending June 30, 2013, compared with the comparative periods in 2012.
  • Funds from Operations, adjusted ("FFO, adjusted") per unit decreased by 5.3% to $0.108 per unit for the three months ended June 30, 2013 and increased by 5.9% to $0.232 for the six months ended June 30, 2013, compared with the comparative periods in 2012.
  • Weighted average cost of mortgage debt at June 30, 2013 decreased to 5.19%, compared to 5.48% at June 30, 2012.
  • Portfolio occupancy was 91.9% compared to 89.4% in December 2012 and 88.2% in June 2012.
  • Average in place rent was $11.55 per square foot up from $10.94 at March 31, 2013 and $10.93 at December 31, 2012.

Richard Michaeloff, President and CEO of the REIT, said, "As we mark our second quarter 2013 results, we continue our momentum and mark a key milestone in the growth and repositioning of Retrocom. The closing of our twelve property portfolio acquisition in early June and our new agreement to acquire two additional high quality new format shopping centres takes Retrocom through the billion dollar milestone. Our financial and operating metrics continue to improve and demonstrate that Retrocom is moving in the right direction."

Financial Highlights

(all amounts in $000's, except per unit amounts and ratios)
Three
months
ended

June 30
2013
Three
months
ended
June 30
2012
Six
months
ended

June 30
2013
Six
months
ended
June 30
2012
Rental revenue and other income 22,750 19,716 44,628 39,698
Property operating expenses 9,683 8,514 19,768 18,034
Property operating income 13,067 11,202 24,860 21,664
Share of joint venture net operating income 294 275 632 446
Net operating income (1) 13,361 11,477 25,492 22,110
Trust expenses 1,306 1,074 2,408 1,993
Transaction costs 1,502 - 1,502 -
Finance costs - joint venture operations 56 53 117 53
Finance costs-operations 5,280 4,721 10,118 9,470
Finance costs - subscription receipts 411 - 411 -
Finance costs-distributions on Class B Units 1,025 1,025 2,050 2,050
Income before fair value gains (losses) and other income 3,781 4,604 8,886 8,544
Fair value gains (losses) associated with financial instrument 5,748 (804) 8,103 (2,486)
Fair value gain (losses) on investment property (5,119) 8,433 (5,478) 7,516
Fair value gains on participant's rights under LTIP 44 13 76 22
Fair value gains (losses) on joint venture property 774 (362) 754 (471)
Loss from sale of investment property - - - (105)
Other income - - 1,048 -
Income for the period 5,228 11,884 13,389 13,020
FFO, adjusted (2) 6,744 5,650 13,948 10,647
FFO, adjusted per unit $0.108 $0.114 $0.232 $0.219
FFO, adjusted payout ratio 104.2% 98.7% 97.0% 102.7%
Distributions per unit $0.1125 $0.1125 $0.2250 $0.2250

Full Financial Results and MD&A will be available on SEDAR (www.sedar.com) as well as the Investors Relations section of the REIT's website (www.rmmreit.com).

(1) A non-IFRS measurement, calculated by the REIT as rental revenue (net rents, property tax and operating cost recoveries, as well as other miscellaneous income from tenants) less operating expenses for properties.

(2) The reconciliations from net income (loss) to Funds from Operations, adjusted are included in the REIT's MD&A.

The REIT's management considers Net Operating Income, Funds from Operations, Funds from Operations, adjusted, and Debt to Gross Book Value ratio to be indicative measures in evaluating the REIT's performance. The table above includes non-IFRS information that should not be construed as an alternative to net income or cash flows from operations and may not be comparable to similar measures presented by other issuers as there is no standardized meaning prescribed by IFRS.

Conference Call

Retrocom REIT will hold a conference call on Friday, August 9, 2013 at 12:00 noon (ET). Participating on the call will be members of the REIT's senior management.

Investors are invited to access the call by dialling 416-644-3417 or 1-877-974-0446. A recording of this call will be made available Friday, August 9, 2013 beginning at 3:00 pm (ET) through to Friday, August 23, 2013. To access the recording, please call 416-640-1917 or 1-877-289-8525 and use the reservation number 4629298#.

About Retrocom REIT

Retrocom REIT is an unincorporated, open-end real estate investment trust which focuses on owning and acquiring retail properties across Canada with the goal of enhancing long-term Unitholder value.

Forward-Looking Information

This press release may contain forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", and by discussions of strategies that involve risks and uncertainties. The forward-looking statements are based on certain key expectations and assumptions made by the REIT. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Although management of the REIT believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Neither the REIT nor any other person assumes responsibility for the accuracy and completeness of any forward-looking statements, and no one has any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or such other factors which affect this information, except as required by law.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of a prospectus, nor shall there be any sale of the Units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The Units of the Retrocom REIT have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an exemption from the registration requirements of U.S. securities laws.

FOR FURTHER INFORMATION PLEASE CONTACT:

Contact Information:
Retrocom Real Estate Investment Trust
Richard Michaeloff
Chief Executive Officer
(416) 741-7999
(416) 741-7993 (FAX)
rmichaeloff@rmmreit.com

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