TORONTO, Nov. 12, 2015 /CNW/ – WPT Industrial Real Estate Investment Trust (the “REIT“) (TSX: WIR.U – OTCQX: WPTIF) announced today continued strong growth and operating performance for the three and nine months ended September 30, 2015. All dollar amounts are stated in US funds.
Q3 2015 HIGHLIGHTS:
- Portfolio growth and solid operating performance drive 16% increase in revenues over Q3 2014
- FFO and AFFO up 16% and 18%, respectively, from Q3 2014
- Accretive growth as AFFO per Unit up 2.8% from Q3 2014
- AFFO payout ratio strong at 82.5% for the third quarter
- Debt to gross book value falls to 48.8% at Q3 2015
“We continued to generate solid gains in our key performance benchmarks in the third quarter of 2015, driven by stable occupancies, strong property management, and the contribution from our property acquisitions over the last twelve months,” stated Scott Frederiksen, Chief Executive Officer.
SOLID OPERATING PERFORMANCE
For the three and nine months ended September 30, 2015, investment properties revenue was $17.7 million and $51.7 million, respectively, representing a 16.3% and 23.2% increase, respectively, compared to the same periods last year. The increases in revenue in 2015 are due primarily to the full period’s contribution from property acquisitions completed in 2104, the purchase of a six-property portfolio in Memphis, Tennessee on February 20, 2015, and stable occupancies.
With strong increases in revenue, Net Operating Income (“NOI”) for the third quarter and first nine months of 2015 increased 15.6% and 24.5%, respectively, compared to the same periods in 2014.
Funds from Operations (“FFO”) for the three and nine months ended September 30, 2015 were $8.6 million ($0.255 per Unit) and $24.8 million ($0.743 per Unit), respectively, representing a 16.0% and 23.8% increase, respectively, compared to the same periods in 2014. Adjusted Funds from Operations (“AFFO”) for the three and nine months ended September 30, 2015 were $7.4 million ($0.218 per Unit) and $21.2 million ($0.637 per Unit), up 18.1% and 31.0%, respectively, compared to the same periods in 2014. The REIT’s AFFO payout ratio strengthened to 84.3% for the nine months ended September 30, 2015 compared to 87.7% last year. Per Unit amounts were impacted by the 14.7% and 23.9% increase in the weighted average number of Units outstanding for the three and nine months ended September 30, 2015, respectively, compared to the same periods last year.
STRONG FINANCIAL & LIQUIDITY POSITION
As at September 30, 2015 the REIT’s debt-to-gross-book-value ratio was a conservative 48.8% with an interest coverage ratio of 3.4 times, a debt-to-EBITDA ratio of 7.7 times, and a fixed charge coverage ratio of 2.9 times. The weighted average effective interest rate on its outstanding debt was 3.8%, down from 3.9% as at December 31, 2014, with a weighted average term to maturity on its mortgages payable of 5.2 years compared to 6.1 years as at December 31, 2014. The weighted average remaining lease term as at September 30, 2015 was 4.0 years.
As at September 30, 2015, availability on the REIT’s revolving credit facility was $75.0 million, of which the REIT had drawn $46.7 million, leaving remaining availability of $28.3 million.
RECENT EVENTS
On August 12, 2015, the Board of Trustees approved an increase to the REIT’s annualized cash distribution rate to unitholders from $0.70 per unit to $0.76 per unit (from $0.0583 to $0.0633 on a monthly basis), representing an 8.6% increase in the annualized distribution rate. The increase was effective beginning with the distribution paid on October 15, 2015 to unitholders of record as of the close of business on September 30, 2015.
On May 18, 2015, the REIT announced that its Board of Trustees had formed a special committee to explore strategic alternatives. There can be no assurance that this exploration process will result in any transaction. The REIT does not currently intend to disclose further developments with respect to this process, unless and until its Board approves a specific transaction or otherwise concludes the review of strategic alternatives.
FINANCIAL AND OPERATIONAL HIGHLIGHTS
|
Three months ended September 30, |
Nine months ended September 30, |
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|
(In thousands of USD, except where noted) |
2015 |
2014 |
2015 |
2014 |
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|
Operating Results: |
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|
Investment properties revenue |
$ |
17,705 |
$ |
15,227 |
$ |
51,654 |
$ |
41,920 |
|
|
NOI (1) |
13,420 |
11,610 |
39,230 |
31,522 |
|||||
|
FFO (1), (2) |
8,617 |
7,431 |
24,750 |
19,990 |
|||||
|
AFFO (1), (3) |
7,361 |
6,234 |
21,214 |
16,205 |
|||||
|
FFO per Unit (1), (4), (7) |
0.255 |
0.252 |
0.743 |
0.740 |
|||||
|
AFFO per Unit (1), (4), (7) |
0.218 |
0.212 |
0.637 |
0.602 |
|||||
|
Distributions: |
|||||||||
|
Distributions per Unit (7), (8) |
$ |
0.180 |
$ |
0.175 |
$ |
0.530 |
$ |
0.525 |
|
|
Distributions declared (7), (8) |
6,071 |
5,148 |
17,877 |
14,206 |
|||||
|
AFFO payout ratio (1) |
82.5% |
82.6% |
84.3% |
87.7% |
|||||
|
Weighted-average number of Units (4), (7) |
33,748,433 |
29,435,714 |
33,321,922 |
26,897,479 |
|||||
|
As at |
September 30, 2015 |
December 31, 2014 |
September 30, 2014 |
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|
Operational Information: |
|||||||
|
Number of investment properties |
48 |
42 |
42 |
||||
|
GLA |
15,097,471 |
12,770,313 |
12,756,313 |
||||
|
Occupancy |
98.1% |
99.1% |
98.9% |
||||
|
Average remaining lease term (years) |
4.0 |
4.6 |
4.8 |
||||
|
Fair value of investment properties |
$ |
739,792 |
$ |
633,056 |
$ |
631,367 |
|
|
Ratios: |
|||||||
|
Weighted-average effective interest rate (5) |
3.8% |
3.9% |
3.9% |
||||
|
Variable interest rate debt as percentage of total debt (6) |
12.9% |
17.7% |
18.2% |
||||
|
Debt-to-gross book value (1) |
48.8% |
50.8% |
51.3% |
||||
|
Interest coverage ratio (1) |
3.4x |
3.3x |
3.3x |
||||
|
Fixed charge coverage ratio (1) |
2.9x |
2.8x |
2.8x |
||||
|
Debt to EBITDA (1) |
7.7x |
7.6x |
7.9x |
||||
|
Unit Information: |
|||||||
|
REIT Units outstanding |
18,523,119 |
14,210,619 |
14,210,400 |
||||
|
Class B Units outstanding |
15,225,314 |
15,225,314 |
15,225,314 |
||||
|
Welsh Retained Interest (7) (assuming all Class B Units held are redeemed for REIT Units) |
47.3% |
54.3% |
54.3% |
||||
|
REIT Unit price |
$ |
11.41 |
$ |
10.95 |
$ |
10.05 |
|
|
(1) |
NOI, FFO, AFFO, FFO per Unit, AFFO per Unit, AFFO payout ratio, EBITDA, debt-to-gross book value, interest coverage ratio, fixed charge coverage ratio and debt to EBITDA are key measures of performance used by real estate operating companies, however, they are not defined by IFRS, do not have standard meanings and may not be comparable with other industries or trusts. This data should be read in conjunction with the “Non-IFRS Measures” of the MD&A. |
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|
(2) |
Refer to the REIT’s respective annual and interim MD&As issued for a reconciliation of FFO to net income (loss) relating to all other periods. |
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|
(3) |
Refer to the REIT’s respective annual and interim MD&As issued for a reconciliation of AFFO to FFO relating to all other periods. |
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|
(4) |
Includes REIT Units and Class B Units (collectively, the “Units“). |
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|
(5) |
Includes mortgages payable, bank indebtedness, mark-to-market adjustments and financing costs. |
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|
(6) |
Includes amounts outstanding under the Revolving Facility. |
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|
(7) |
Excludes options and DTUs outstanding under the REIT’s equity compensation plans. |
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|
(8) |
Includes distributions on REIT Units and Class B Units. |
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INVESTOR CONFERENCE CALL
A conference call will be hosted by the REIT’s management team on Friday, November 13, 2015 at 9:00 am ET. The telephone numbers to participate in the conference call are Canada Toll Free: (855) 669-9657, U.S. Toll Free (888) 249-8268 and International: (412) 902-4153. The live audio conference call will also be available as a webcast. To access the live audio webcast please access the link on the “Investors” page on our web site at www.wptreit.com. The telephone numbers to listen to the call after it is completed (Instant Replay) are Canada Toll Free (855) 669-9658, U.S. Toll Free (877) 344-7529 and International (412) 317-0088. The Passcode for the Instant Replay is 10073403#. A recording of the call will also be archived on the REIT’s web site at www.wptreit.com.
About WPT Industrial Real Estate Investment Trust
WPT Industrial Real Estate Investment Trust 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 formed to own and operate an institutional-quality portfolio of primarily industrial properties located in the United States, with a particular focus on warehouse and distribution industrial real estate. WPT Industrial, LP (the REIT’s operating subsidiary) indirectly owns a portfolio of properties consisting of approximately 15.1 million square feet of gross leasable area, comprised of 46 industrial properties and two office properties located in 13 states in the United States. Welsh Property Trust, LLC is the external asset manager and property manager of the REIT. The REIT pays monthly cash distributions, currently at $0.0633 per Trust Unit, or approximately $0.76 per Trust Unit on an annualized basis, in US funds.
Forward-Looking Statements
This press release contains “forward-looking information” as defined under applicable Canadian securities law (“forward-looking information” or “forward-looking statements“) which reflect management’s expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words “plans”, “expects”, “does not expect”, “scheduled”, “estimates”, “intends”, “anticipates”, “does not anticipate”, “projects”, “believes” or variations of such words and phrases or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “occur”, “be achieved” or “continue” and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management of the REIT as of the date of this press release, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The REIT’s estimates, beliefs and assumptions, which may prove to be incorrect, include the various assumptions set forth herein, including, but not limited to, the REIT’s and the property’s future growth potential, anticipated amounts of expenses, results of operations, future prospects and opportunities, the demographic and industry trends remaining unchanged, no change in legislative or regulatory matters, future levels of indebtedness, the tax laws as currently in effect remaining unchanged, the continual availability of capital, the current economic conditions remaining unchanged, and continued positive net absorption and declining vacancy rates in the markets in which the REIT’s properties are located.
When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under “Risk Factors” in the REIT’s annual information form for the period ended December 31, 2014, which is available under the REIT’s profile on SEDAR at www.sedar.com. These forward-looking statements are made as of the date of this press release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE WPT Industrial Real Estate Investment Trust
