CALGARY, ALBERTA–(Marketwired – March 11, 2016) – Edgefront Real Estate Investment Trust (the “REIT”) (TSX VENTURE:ED.UN) announced today its results for the year ended December 31, 2015, the REIT’S inaugural earnings call and March distribution.
- The REIT acquired 2 industrial properties for $12.1 million at a blended 7.9% capitalization rate in the fourth quarter of 2015, issuing 2,786,842 units valued at $1.90 per unit as partial purchase consideration.
- Total of $50.1 million of acquisitions in 2015, issuing 10,310,459 units at $1.90 per unit; for a value of $19,589,872; increasing the REIT’s total assets to over $160 million.
- The REIT continues to derive rental revenues from stable, strong-covenant tenants under long-term leases with a weighted average 9.9 year remaining lease term.
- AFFO per unit increases 0.9% to $0.053 for the fourth quarter
- AFFO payout Ratio of 78.4% for the quarter and year ended December 31, 2015.
- Conservative debt to total assets ratio of 50.5%.
- Inaugural earnings call scheduled for March 11, 2016 at 1PM Eastern Standard Time
“In a period of market volatility, Edgefront continues to show consistency in its results stated Kelly Hanczyk, the REIT’s Chief Executive Officer. Our long-term leases with strong credit tenants, who are minimally impacted by the oil and gas industry, will continue to provide our unitholders stability in these uncertain times. In addition, yearly contractual rent increases on approximately 82% of our revenues will provide further growth to our free cash flow in 2016 and beyond. We will continue to apply a disciplined approach in actively pursuing acquisition opportunities that will enhance and further strengthen our portfolio performance”
Summary of Results
Included in the table that follows and elsewhere in this news release are non-IFRS measures that should not be construed as an alternative to net income / loss, cash from operating activities or other measures of financial performance calculated in accordance with IFRS, and may not be comparable to similar measures as reported by other issuers. Readers are encouraged to refer to the REIT’s MD&A for further discussion of the non-IFRS measures presented.
|Three months ended December 31,||Year ended December 31,|
|Funds from operations (FFO)||1,727,136||1,264,179||5,818,718||3,945,827|
|Adjusted funds from operations (AFFO)||1,934,492||1,496,354||6,719,995||4,716,637|
|Distributions declared (1)||1,516,293||1,151,876||5,266,977||3,763,590|
|Weighted average units outstanding – basic and diluted (2)||36,788,732||28,756,188||32,621,783||23,331,925|
|Distributions per unit (1) (2)||0.041||0.040||0.161||0.161|
|FFO per unit, basic and diluted (2)||0.047||0.044||0.178||0.169|
|AFFO per unit, basic and diluted (2)||0.053||0.052||0.206||0.202|
|AFFO payout ratio (1)||78.4||%||77.0||%||78.4||%||79.8||%|
|Debt to total assets ratio||50.5||%||48.6||%||50.5||%||48.6||%|
- Includes distributions payable to holders of Class B LP Units which are accounted for as interest expense in the consolidated financial statements.
- Weighted average number of units includes the Class B LP Units.
|Three months ended December 31,||Year ended December 31,|
|Net rental income||2,935,455||2,204,509||9,910,318||7,028,996|
|Net income excluding fair value adjustments||1,561,478||1,271,585||5,384,739||3,912,172|
Revenues and Results from Operations in Line with Expectations
Rental revenue increased to $3,585,247 in the quarter as compared to $2,717,232 in the same quarter of 2014, and $2,987,548 in the third quarter of 2015. Net rental income grew to $2,935,455 in the quarter as compared to $2,204,509 in same quarter of 2014, and $2,570,519 in the third quarter of 2015. The growth in net rental income is primarily attributable to the impact of acquisitions completed in 2015. The majority of the REIT’s leases are triple net and care free to the landlord, and the average remaining lease term is 9.9 years, allowing very stable and predictable earnings.
The REIT generated FFO and AFFO of $1,727,136 and $1,934,492 respectively, in the fourth quarter, with FFO and AFFO per unit of $0.047 and $0.053, respectively. FFO and AFFO per unit increased 3.4% and 0.9%, respectively, as compared to Q3 2015.
Distributions of $0.041 per unit were declared for the quarter. The AFFO payout ratio for the quarter was 78.4%.
Balance Sheet and Liquidity
The REIT’s debt to total assets ratio was 50.5% at December 31, 2015. The REIT intends to maintain a debt to total assets ratio of less than 55%.
Kelly Hanczyk, President and Chief Executive Officer of the REIT, and Robert Chiasson, Chief Financial Officer, will host a conference call at 1:00 PM Eastern Standard Time on Friday March 11, 2016 to review the financial results and operations.
To participate in the conference call, please dial 416-340-2216 or 1-866-223-7781 (toll free in Canada and the US) at least 10 minutes prior to the commencement of the call and ask to join the Edgefront REIT conference call.
A recording of the conference call will be available until March 18, 2016. To access the recording, please dial 905-694-9451 or 1-800-408-3053 (toll free in Canada and the US) and enter passcode 6383106.
March 2016 Distribution
The REIT will make a cash distribution in the amount of $0.01333 per unit, representing $0.16 on an annualized basis, payable April 15, 2015 to unitholders of record as of March 31, 2015.
The REIT’s current distribution per unit continues to be $0.01333 per month. The REIT’s distribution reinvestment program (“DRIP”) entitles eligible unitholders to elect to receive all, or a portion of the cash distributions of the REIT reinvested in units of the REIT. Eligible unitholders who so elect will receive a bonus distribution of units equal to 4% of each distribution that was reinvested by them under the DRIP.
About the REIT
Edgefront REIT is a growth oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership and management of industrial properties located in primary and secondary markets in North America. The REIT currently owns a portfolio of 19 properties comprising approximately 1,030,000 square feet of rentable area. The REIT has approximately 34,471,563 units issued and outstanding. Additionally, there are 5,528,354 Class B LP units of subsidiary limited partnerships of the REIT issued and outstanding.
FORWARD LOOKING STATEMENTS
Certain statements contained in this new release constitute forward-looking statements which reflect the REIT’s current expectations and projections about future results. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Such forward-looking statements are based on a number of assumptions that may prove to be incorrect.
While the REIT anticipates that subsequent events and developments may cause its views to change, the REIT specifically disclaims any obligation to update these forward-looking statements except as required by applicable law. These forward-looking statements should not be relied upon as representing the REIT’s views as of any date subsequent to the date of this news release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the REIT.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Edgefront Real Estate Investment Trust
For further information:
Kelly C. Hanczyk
President and CEO