FREDERICTON, Feb. 26, 2015 /CNW/ – Plaza Retail REIT (TSX: PLZ.UN) (“Plaza”) today announced its results for the year ended December 31, 2014.
Plaza reported funds from operations (“FFO”) of $27.2 million for the year ended December 31, 2014, an increase of 41.0% over the prior year. FFO per unit was $0.297 for the year ended December 31, 2014 ($0.297 per unit diluted), an increase of 14.2% over the prior year. FFO was positively impacted by growth in total net property operating income and same-asset net property operating income and net property operating income from the acquisition of KEYreit.
Plaza reported FFO of $6.8 million for the three months ended December 31, 2014, an increase of 39.6% over the same period in the prior year. FFO per unit was $0.073 for the quarter ended December 31, 2014 ($0.073 per unit diluted), an increase of 28.1% over the same period in the prior year.
Plaza’s significant growth was partly driven by the following achievements during 2014. Plaza: (1) obtained or refinanced approximately $165 million in mortgage loans and convertible debentures (at Plaza’s ownership percentage), generating approximately $1.4 million in annual cash flow savings, or approximately $0.015 per unit; (2) continued to extract value from the acquisition of KEYreit, including realizing synergies in administrative expenses amounting to $3.0 million per year, refinancing almost half of the KEYreit mortgage loans and debentures resulting in cash flow savings of approximately $1.3 million per year, selling $60.3 million of non-core properties at well-above Plaza’s underwritten value by approximately $15.1 million, and beginning redevelopment of sites to fit new tenants; and (3) spent $34.4 million in developments/redevelopments and added $1.0 million in incremental NOI from 2013 and 2014 projects that became income producing.
The year was also marked by a number of other important achievements, including: (1) converting to a REIT structure; (2) purchasing the interests of certain equity partners in eight properties located in New Brunswick and Prince Edward Island effective January 1, 2015 which is accretive to Plaza; and (3) announcing the 12th annual increase in distributions to 25¢ per unit for 2015, up from 24¢ per unit in 2014.
Michael Zakuta, President and CEO said, “We are very pleased with the financial results for 2014. Those results reflect the impact of our substantial refinancing program, growth from our development pipeline and our KEYreit value extraction initiatives. The growth in FFO continues to confirm our business strategy that is based on creating value for our unitholders by being opportunistic and by developing and redeveloping high quality retail projects leased to national retailers and financing these projects with long term fixed rate financing for terms of ten years or more.”
Plaza is an open-ended real estate investment trust and is a leading retail property owner and developer, particularly in Eastern Canada. Plaza’s current portfolio includes interests in 308 properties totaling approximately 6.7 million square feet across Canada and additional lands held for development. Plaza’s properties include a mix of strip plazas, stand-alone small box retail outlets and enclosed shopping centres, anchored by approximately 90% national tenants.
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SOURCE Plaza Retail REIT