Subjects: ERN, DIV
NEXUS REIT announces record 2017 results and March 2018 distribution
TORONTO and MONTREAL, March 15, 2018 /CNW/ - NEXUS Real Estate Investment Trust (the "REIT") (TSXV: NXR.UN) announced today its results for the fourth quarter and year ended December 31, 2017 and the declaration of the March 2018 distribution.
Highlights
- Net income for the year of $15,688,792, up 50% as compared to 2016 net income of $10,478,291.
- Total assets increased $273,918,822 or 156% as compared to December 31, 2016, primarily as a result of accretive acquisitions completed in the year, and fair value increases of investment property.
- Normalized AFFO per unit for the year increased 8.4% as compared to 2016 AFFO per unit. AFFO per unit for the quarter of $0.048 is 6.2% higher than AFFO per unit of the same quarter of 2016.
- Normalized AFFO payout ratio for the year of 83% is down from 89.1% for the year ended December 31, 2016.
- Conservative debt to total assets ratio of 54%.
- Sandalwood acquisition continues to deliver strong results; space early terminated in the third quarter was fully leased on favourable terms subsequent to year end.
- Management of the REIT will host a conference call on Friday March 16th at 1PM EST to review results and operations.
"2017 was a transformational year for the REIT. With the completion of the Nobel merger in April and the purchase of the Sandalwood portfolio in July, the REIT more than doubled its assets and market capitalization while continuing to grow our AFFO per unit." commented Kelly Hanczyk, the REIT's Chief Executive Officer. "Since the inception of the REIT in January 2014, we have consistently reduced our AFFO payout ratio, conservatively managed our debt to total assets ratio and have proven to be a stable long-term investment for our unitholders. We have fully integrated both transactions and are excited about the next phase of our growth. We will begin to recycle capital and execute on off market transactions in the very near future, continuing to grow our AFFO per unit."
Summary of Results
Included in the tables that follow 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, | |||
|
2017 |
2016 |
2017 |
2016 | |
|
Financial Results |
$ |
$ |
$ |
$ |
|
Property revenue |
13,135,687 |
3,989,359 |
36,999,083 |
15,407,328 |
|
Net operating income |
8,161,267 |
3,341,920 |
25,139,568 |
12,822,691 |
|
Net income |
12,302,915 |
5,694,279 |
15,688,792 |
10,478,291 |
|
Net income excluding transaction costs, fair value adjustments, and bargain purchase gain |
5,059,897 |
1,800,690 |
15,496,518 |
7,182,350 |
|
Three months ended December 31, |
Year ended December 31, | |||
|
2017 |
2016 |
2017 |
2016 | |
|
Financial Highlights |
$ |
$ |
$ |
$ |
|
FFO (1) |
5,353,520 |
2,042,133 |
16,066,532 |
8,099,254 |
|
Normalized FFO (1) (4) |
5,353,520 |
2,042,133 |
16,066,532 |
7,842,726 |
|
AFFO (1) |
4,548,657 |
1,893,760 |
14,168,344 |
7,574,295 |
|
Normalized AFFO (1) (4) |
4,548,657 |
1,893,760 |
14,168,344 |
7,317,767 |
|
Distributions declared (2) |
3,768,425 |
1,668,306 |
12,203,008 |
6,522,392 |
|
Weighted average units outstanding - basic (3) |
94,213,235 |
41,668,244 |
72,657,067 |
40,669,109 |
|
Weighted average units outstanding - diluted (3) |
94,277,656 |
41,668,244 |
72,739,276 |
40,669,109 |
|
Distributions per unit, basic and diluted (2) (3) |
0.040 |
0.040 |
0.168 |
0.160 |
|
FFO per unit, basic and diluted (1) (3) |
0.057 |
0.049 |
0.221 |
0.199 |
|
Normalized FFO per unit, basic (1) (3) (4) |
0.057 |
0.049 |
0.221 |
0.193 |
|
AFFO per unit, basic and diluted (1) (3) |
0.048 |
0.045 |
0.195 |
0.186 |
|
Normalized AFFO per unit, basic and diluted (1) (3) (4) |
0.048 |
0.045 |
0.195 |
0.180 |
|
Normalized AFFO payout ratio, basic(1) (2) (4) (5) |
82.8% |
88.1% |
83.0% |
89.1% |
|
Debt to total assets ratio |
54.0% |
48.7% |
54.0% |
48.7% |
|
(1) |
Non-IFRS Measure |
|
(2) |
Includes distributions payable to holders of Class B LP Units which are accounted for as interest expense in the consolidated financial statements. |
|
(3) |
Weighted average number of units includes the Class B LP Units. |
|
(4) |
For the year ended December 31, 2016, FFO and AFFO include $256,528 of other income relating to the release in the first quarter of 2016 of funds previously held in an environmental escrow in connection with the acquisition of ten industrial properties on January 14, 2014. This is a one-time item which is excluded from normalized FFO and normalized AFFO for the year ended December 31, 2016. |
|
(5) |
33,350,000 REIT units were issued on June 30, 2017 on the closing of an equity financing and private placement. These units were eligible to receive distributions for the month of June 2017. Normalized AFFO payout ratio, basic and diluted, is calculated excluding $444,556 of June 2017 distributions paid on these units. Normalized AFFO Payout Ratio for the year ended December 31, 2017 was 86.1% when unadjusted for distributions paid on these units. |
Revenues and Results from Operations in Line with Expectations
Net operating income for the fourth quarter of $8,161,267 was $264,807 lower than net operating income of $8,426,074 for the third quarter. A lease termination payment of $150,000 was received in the third quarter with respect to space that was untenanted in the fourth quarter, combined with the impact of seasonal costs such as utilities and snow removal. Subsequent to year end, the terminated space was fully leased.
General and administrative expense for the quarter of $987,470 was $286,027 higher than general and administrative expense for the third quarter of $701,443. 2017 Annual bonuses paid to officers and employees of the REIT in 2018 were accrued and expensed in the fourth quarter, accounting for the increase, partially offset by other lower expenses. It is anticipated that bonuses will be accrued and expensed quarterly vs. annually going forward.
Other income for the quarter of $315,717 was $189,965 higher than $125,752 for the third quarter due to construction management fees earned in the fourth quarter.
Earnings Call
Management of the REIT will host a conference call at 1:00 PM Eastern Standard Time on Friday March 16, 2018 to review the financial results and operations.
To participate in the conference call, please dial 416-915-3239 or 1-800-319-4610 (toll free in Canada and the US) at least five minutes prior to the start time and ask to join the Nexus REIT conference call.
A recording of the conference call will be available until April 15, 2018. To access the recording, please dial 604-674-8052 or 1-855-669-9658 (toll free in Canada and the US) and enter access code 2098.
March Distribution
The REIT will make a cash distribution in the amount of $0.01333 per unit, representing $0.16 per unit on an annualized basis, payable April 16, 2018 to unitholders of record as of March 30, 2018.
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 Nexus REIT
Nexus is a growth oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership and management of industrial, office and retail properties located in primary and secondary markets in North America. The REIT currently owns a portfolio of 62 properties comprising approximately 3.5 million square feet of rentable area. The REIT has approximately 88,882,000 units issued and outstanding. Additionally, there are approximately 5,440,000 Class B LP units of subsidiary limited partnerships of the REIT issued and outstanding.
Forward Looking Statements
Certain statements contained in this news 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.
SOURCE Nexus Real Estate Investment Trust
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