TORONTO, May 3 /CNW/ - Allied Properties REIT (TSX:AP.UN) today announced
results for the first quarter ended March 31, 2006. "We are benefiting from
strengthening demand for office space in our principal target markets," said
Michael Emory, President and CEO. "Our leasing activity during and following
the first quarter bodes well for continued strong operating and financial
performance."
Highlights
In the first quarter of 2006, the REIT
- increased Distributable Income ("DI") to $5.4 million, up 26% from the
comparable quarter in 2005, resulting in DI per unit (diluted) of
$0.336,
- increased Funds From Operations ("FFO") to $5.9 million, up 24% from
the comparable quarter in 2005, resulting in FFO per unit (diluted) of
$0.368,
- increased monthly distributions (effective March of 2006) to $0.10167
per unit ($1.22 per unit annualized), up 3.4% from $0.09833 per unit
($1.18 per unit annualized),
- achieved a DI pay-out ratio of 88.4% and an FFO pay-out ratio of
80.6%,
- announced the acquisition of 4436-4450 Saint-Laurent Boulevard and
adjacent land in Montreal, which closed on April 5, 2006, bringing the
Montreal component of its portfolio to nearly half a million square
feet,
- leased 32,242 square feet of gross leasable area ("GLA") at the
Balfour Building in Montreal (3575 Saint-Laurent Boulevard) to a
single tenant for a term of 10 years commencing September 1, 2006, and
- increased the leased area of its portfolio to 97.2% from 97.0% at the
end of 2005 (not including properties under development).
By the end of the first quarter, the REIT had renewed or replaced leases
representing 71% of the 272,103 square feet of GLA covered by leases maturing
in 2006.
Following the end of the first quarter, the REIT leased 19,045 square
feet of GLA at 905 King Street West, Toronto, to a single tenant for a term of
five years commencing May 1, 2006. This space was vacated following non-
renewal by a single tenant on March 31, 2005.
Financial Results
The REIT's financial results for the first quarter ended March 31, 2006,
are summarized below and compared to the prior quarter and the same quarter in
2005:
<<
(In thousands
except for
per unit
and %
amounts) Q1 2006 Q4 2005 Change % Change Q1 2005 Change % Change
-------------------------------------------------------------------------
DI 5,395 5,283 112 2.1% 4,297 1,098 25.6%
DI per unit
(basic) $0.341 $0.344 ($0.003) (0.9%) $0.355 ($0.014) (3.9%)
DI per unit
(diluted) $0.336 $0.339 ($0.003) (0.9%) $0.348 ($0.012) (3.5%)
DI pay-out
ratio 88.4% 86.7% 1.7% 82.8% 5.60%
FFO 5,913 5,782 131 2.3% 4,786 1,127 23.5%
FFO per
unit
(basic) $0.374 $0.377 ($0.003) (0.8%) $0.395 ($0.021) (5.3%)
FFO per
unit
(diluted) $0.368 $0.370 ($0.002) (0.5%) $0.388 ($0.020) (5.2%)
FFO pay-out
ratio 80.6% 79.2% 1.4% 74.3% 6.3%
Leased GLA 97.2% 97.0% 0.2% 99.1% (1.9%)
-------------------------------------------------------------------------
The decline in DI per unit and FFO per unit from the same quarter in 2005
was primarily the result of lower leased area in the first quarter of 2006
(97.2% at quarter-end, as compared to 99.1% at the end of the first quarter of
2005). A significant portion of the incremental vacant space in the first
quarter of 2006 was leased following the end of the quarter, bringing the
REIT's leased area to 98.2%.
DI and FFO are not financial measures defined by Canadian GAAP. Please
see the REIT's MD&A for a description of these measures and their
reconciliation to net income.
Properties Under Development
QRC South in Toronto (103 Richmond Street East, formally referred to as
100 Lombard Street) and 145 Berkeley Street in Toronto were acquired in
November of 2005. They are properties under development, in that they are
undergoing the repositioning and redevelopment necessary for them to function
as high quality, income-producing, Class I office properties. By the end of
the first quarter, the REIT had increased the occupancy at 145 Berkeley Street
from 20% to 64% of the GLA in the building. The REIT also finalized plans to
reposition and redevelop QRC South as an annex to The Queen Richmond Centre, a
large Class I office complex acquired by the REIT in 2004. The construction
phase at QRC South commenced in April, 2006, and the re-leasing phase is
expected to commence fully by June, 2006.
Outlook
Demand for office space in the REIT's principal target markets is
strengthening. This is particularly pronounced in the REIT's Toronto target
market, where overall occupancy levels and rent levels are expected to rise
over the remainder of 2006. The state of the REIT's target markets, the
quality of the REIT's portfolio and the capabilities of the REIT's personnel
afford Management a reasonable basis for confidence in the REIT's near-term
performance. The REIT intends to continue the acquisition of Class I and other
office properties in its target markets.
Additional Financial Information
The consolidated financial statements of the REIT for the quarter ended
March 31, 2006, together with accompanying notes and MD&A, have been filed
with SEDAR, www.sedar.com, and are available on the REIT's web-site,
www.alliedpropertiesreit.com.
Cautionary Statements
This press release may contain forward-looking statements with respect to
the REIT, its operations, strategy, financial performance and condition. These
statements generally can be identified by use of forward looking words such as
"may", "will", "expect", "estimate", "anticipate", intends", "believe" or
"continue" or the negative thereof or similar variations. The actual results
and performance of the REIT discussed herein could differ materially from
those expressed or implied by such statements. Such statements are qualified
in their entirety by the inherent risks and uncertainties surrounding future
expectations. Important factors that could cause actual results to differ
materially from expectations include, among other things, general economic and
market factors, competition, changes in government regulations and the factors
described under "Risk Factors" in the Annual Information Form of the REIT
which is available at www.sedar.com. The cautionary statements qualify all
forward-looking statements attributable to the REIT and persons acting on its
behalf. Unless otherwise stated, all forward-looking statements speak only as
of the date of this press release, and the parties undertake no obligation to
update such statements.
Allied Properties REIT owns a portfolio of predominantly Class I office
properties in downtown Toronto, downtown Montreal and downtown Winnipeg. The
objectives of the REIT are to provide stable and growing cash distributions to
its unitholders and to maximize unitholder value through the effective
management and accretive growth of its portfolio.
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