TORONTO, Aug. 11, 2022 (GLOBE NEWSWIRE) -- SmartCentres Real Estate Investment Trust ("SmartCentres", the "Trust" or the "REIT") (TSX: SRU.UN) is pleased to report its financial and operating results for the quarter ended June 30, 2022.
"We continue to see improvement in customer traffic to our shopping centres which in turn generated steady increased levels of leasing activity that began earlier in 2022. We anticipate that this momentum will continue for the rest of 2022 which should have a positive impact on both our occupancy and earnings. We are pleased with this noticeable improvement in leasing activity and the associated improvement in metrics. Cash collections continue to improve, again exceeding 98% for the quarter, and we expect these levels to return to pre-COVID levels over the remainder of the year. Notwithstanding the recent upward movement in interest rates, our Walmart-anchored retail portfolio continues to demonstrate its strength and alignment with Canadian consumers; and thus has maintained its value for IFRS purposes during the quarter.
The improvement in our operating performance is further reflected in our financial results for the quarter. Our FFO per Unit as adjusted for anomalous items(1) increased by $0.03 or 5.8% to $0.55, and net income and comprehensive income per Unit increased by $0.34 or 60.8% to $0.90, as compared to the same quarter in the prior year".
At SmartVMC, currently our largest development initiative, but just one of many master-planned projects, beginning in Q3 2020, we have thus far closed on 1,763 units in the first three Transit City condominium phases, resulting in $0.38 in FFO per Unit(1) and $0.39 in net income and comprehensive income per Unit. Excitement around SmartVMC continues as the 120,000 square foot world class YMCA opened during the quarter, a huge step in the evolution at this city's growth. Through our residential banner, SmartLiving, our mixed-use intensification program continues to be a source of additional accretive growth, demonstrated by the launch of presale activity at Park Place where to date we have pre-sold approximately 50% of units released, demonstrating that SmartVMC operates outside the ebb and flow of other one-off residential developments owing to its master plan around mass transit and its strategic location in the GTA. Park Place, which includes approximately 1100 units in two stunning 56 and 48 storey towers, will be built on approximately two acres of the 53 acres of the recently acquired western lands at SmartVMC. At the Artwalk, another neighborhood within VMC, we have presold 100% of units released and we expect to begin construction of this multi-phased project later this year on a portion of lands previously occupied by Walmart at SmartVMC. Also, during the quarter, we successfully closed all 22 presold townhomes at Transit City and construction is progressing on time and on budget for the fourth and fifth fully sold-out phases of Transit City condominiums with full deposits representing 20% of each unit's purchase price having now been received, with closings expected to commence early in 2023. The 454-unit Millway rental tower is also proceeding on time and on budget with initial tenancies expected to begin later this year. We intend to develop approximately 20.0 million square feet of mixed-use space at SmartVMC alone, on which together with the City of Vaughan, we are also planning a 9-acre park which, over time, will become the focal point of this landmark city centre development.
Not that long ago our company was primarily focused on value-oriented retail with Walmart as its driving force. Today, our platform has evolved in new areas of growth. In 2015, we expanded our focus to various mixed-use forms of real estate including office, self-storage, condominiums and townhomes, high-rise rentals and seniors housing. SmartCentres now possesses industry leading, in-house expertise in all of these areas. Most notably, through our SmartLiving platform, we now have an internal team of professionals who facilitate the development, sales, construction, leasing, and management of our residential program across the country; a platform that did not exist a mere seven years ago. And now, with the acquisition of 32 acres of development lands in Pickering, we have begun our first initiative into the industrial sector; more to come. These evolving stages of growth in multiple disciplines permit us to continue to diversify our asset base and plant seeds for growth in NAV and FFO for many years into the future," said Mitchell Goldhar, Executive Chairman and CEO of SmartCentres REIT.
(1) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
Key Business Development, Financial and Operational Highlights for the Three Months Ended June 30, 2022
Mixed-Use Development and Intensification at SmartVMC
Other Business Development
Financial
Operational
(1) Represents a GAAP measure.
(2) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
(3) Net of cash-on-hand of $133.2 million as at June 30, 2022 for the purposes of calculating the applicable ratios.
Selected Consolidated Operational, Mixed-Use Development and Financial Information
Key consolidated operational, mixed-use development and financial information shown in the table below includes the Trust's proportionate share of equity accounted investments:
(in thousands of dollars, except per Unit and other non-financial data) | June 30, 2022 | December 31, 2021 | June 30, 2021 |
Portfolio Information | |||
Number of retail properties | 155 | 155 | 156 |
Number of office properties | 4 | 4 | 4 |
Number of self-storage properties | 6 | 6 | 4 |
Number of residential properties | 1 | 1 | 1 |
Number of properties under development | 19 | 17 | 15 |
Total number of properties with an ownership interest | 185 | 183 | 180 |
Leasing and Operational Information(1) | |||
Gross leasable retail and office area (in thousands of sq. ft.) | 34,661 | 34,119 | 34,186 |
Occupied retail and office area (in thousands of sq. ft.) | 33,707 | 33,219 | 33,180 |
Vacant retail and office area (in thousands of sq. ft.) | 954 | 900 | 1,006 |
In-place occupancy rate (%) | 97.2 | 97.4 | 97.1 |
Committed occupancy rate (%) | 97.6 | 97.6 | 97.3 |
Average lease term to maturity (in years) | 4.4 | 4.4 | 4.6 |
Net retail rental rate (per occupied sq. ft.) ($) | 15.54 | 15.44 | 15.43 |
Net retail rental rate excluding Anchors (per occupied sq. ft.) ($) | 22.26 | 22.07 | 22.04 |
Mixed-Use Development Information | |||
Trust's share of future development area (in thousands of sq. ft.) | 40,200 | 40,600 | 32,400 |
Trust's share of estimated costs of future projects currently under construction, or for which construction is expected to commence within the next five years (in millions of dollars) | 9,800 | 9,800 | 7,800 |
Total number of residential rental projects | 104 | 104 | 96 |
Total number of seniors' housing projects | 27 | 27 | 40 |
Total number of self-storage projects | 36 | 36 | 50 |
Total number of office building projects | 8 | 8 | 7 |
Total number of hotel projects | 3 | 3 | 4 |
Total number of condominium developments | 95 | 95 | 72 |
Total number of townhome developments | 9 | 10 | 15 |
Total number of estimated future projects currently in development planning stage | 282 | 283 | 284 |
Financial Information | |||
Total assets ? GAAP(2) | 11,905,066 | 11,293,248 | 10,036,672 |
Total assets ? non-GAAP(3)(4) | 12,200,890 | 11,494,377 | 10,221,599 |
Investment properties ? GAAP(2) | 10,285,753 | 9,847,078 | 8,883,634 |
Investment properties ? non-GAAP(3)(4) | 11,191,069 | 10,684,529 | 9,490.636 |
Total unencumbered assets(3) | 8,413,000 | 6,640,600 | 5,937,900 |
Debt ? GAAP(2) | 5,128,604 | 4,854,527 | 4,492,948 |
Debt ? non-GAAP(3)(4) | 5,325,630 | 4,983,078 | 4,591,889 |
Debt to Aggregate Assets (%)(3)(4)(5) | 43.0 | 42.9 | 44.6 |
Debt to Gross Book Value (%)(3)(4)(5) | 51.9 | 50.8 | 50.1 |
Unsecured to Secured Debt Ratio(3)(4)(5) | 77%/23% | 71%/29% | 70%/30% |
Unencumbered assets to unsecured debt(3)(4)(5) | 2.1X | 1.9X | 1.9X |
Weighted average interest rate (%)(3)(4) | 3.30 | 3.11 | 3.27 |
Weighted average term of debt (in years) | 4.4 | 4.8 | 5.3 |
Interest coverage ratio(3)(4)(5) | 3.3X | 3.4X | 3.4X |
Adjusted Debt to Adjusted EBITDA (net of cash)(3)(4)(5) | 10.0X | 9.2X | 8.2X |
Adjusted Debt to Adjusted EBITDA (net of cash and TRS)(3)(4)(5) | 9.8X | 9.1X | 8.1X |
Fixed Rate to Variable Rate Debt Ratio(3)(4)(5) | 84%/16% | 89%/11% | 96%/4% |
Equity (book value)(2) | 6,216,395 | 5,841,315 | 5,168,610 |
Weighted average number of units outstanding ? diluted | 179,626,838 | 173,748,819 | 173,480,822 |
(1) Excluding residential and self-storage area.
(2) Represents a GAAP measure.
(3) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
(4) Includes the Trust's proportionate share of equity accounted investments.
(5) As at June 30, 2022, cash-on-hand of $133.2 million was excluded for the purposes of calculating the applicable ratios (December 31, 2021 ? $80.0 million, June 30, 2021 ? $55.7 million).
Quarterly Comparison to Prior Year
The following table presents key financial, per Unit, and payout ratio information for the three months ended June 30, 2022 and June 30, 2021:
(in thousands of dollars, except per Unit information) | June 30, 2022 | June 30, 2021 | Variance | ||||||
(A) | (B) | (A?B) | |||||||
Financial Information | |||||||||
Rentals from investment properties and other(1) | 198,296 | 193,937 | 4,359 | ||||||
Net base rent(1) | 127,232 | 123,500 | 3,732 | ||||||
Total recoveries(1) | 65,119 | 63,995 | 1,124 | ||||||
Miscellaneous revenue(1) | 3,416 | 2,998 | 418 | ||||||
Service and other revenues(1) | 2,529 | 3,444 | (915 | ) | |||||
Net income and comprehensive income(1) | 161,997 | 96,985 | 65,012 | ||||||
Net income and comprehensive income excluding fair value adjustments(2)(3) | 89,646 | 93,156 | (3,510 | ) | |||||
Cash flows provided by operating activities(1) | 43,970 | 62,168 | (18,198 | ) | |||||
Net rental income and other(1) | 124,964 | 119,132 | 5,832 | ||||||
NOI from condominium and townhome closings(2) | 1,100 | 14,028 | (12,928 | ) | |||||
NOI(2) | 130,034 | 136,091 | (6,057 | ) | |||||
Change in net rental income and other(2) | 4.9 | % | 12.8 | % | (7.9 | )% | |||
Change in SPNOI(2) | 5.0 | % | 9.6 | % | (4.6 | )% | |||
Change in SPNOI excluding ECL(2) | 2.1 | % | (2.0)% | 4.1 | % | ||||
FFO(2)(3)(4)(5) | 88,464 | 100,455 | (11,991 | ) | |||||
Other adjustments | 982 | 625 | 357 | ||||||
FFO with adjustments(2)(3)(4) | 89,446 | 101,080 | (11,634 | ) | |||||
Adjusted for: | |||||||||
ECL | (1,214 | ) | 2,274 | (3,488 | ) | ||||
Loss (gain) on derivative ? TRS | 7,843 | (557 | ) | 8,400 | |||||
FFO sourced from condominium and townhome closings | (1,100 | ) | (12,891 | ) | 11,791 | ||||
FFO sourced from SmartVMC West acquisition | (207 | ) | ? | (207 | ) | ||||
FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4) | 94,768 | 89,906 | 4,862 | ||||||
ACFO(2)(3)(4)(5) | 80,871 | 94,246 | (13,375 | ) | |||||
Other adjustments | 982 | 625 | 357 | ||||||
ACFO with adjustments(2)(3)(4) | 81,853 | 94,871 | (13,018 | ) | |||||
Adjusted for: | |||||||||
Loss (gain) on derivative ? TRS | 7,843 | (557 | ) | 8,400 | |||||
ACFO sourced from condominium and townhome closings | (1,100 | ) | (14,028 | ) | 12,928 | ||||
ACFO sourced from SmartVMC West acquisition | (207 | ) | ? | (207 | ) | ||||
ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4) | 88,389 | 80,286 | 8,103 | ||||||
Distributions declared | 82,422 | 79,685 | 2,737 | ||||||
Shortfall of cash provided by operating activities over distributions declared(2) | (38,452 | ) | (17,517 | ) | (20,935 | ) | |||
(Shortfall) surplus of ACFO over distributions declared(2) | (1,551 | ) | 14,563 | (16,114 | ) | ||||
Surplus of ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition over distributions declared(2) | 5,967 | 601 | 5,366 | ||||||
Units outstanding(6) | 178,122,655 | 172,280,187 | 5,842,468 | ||||||
Weighted average ? basic | 178,122,655 | 172,275,798 | 5,846,857 | ||||||
Weighted average ? diluted(7) | 179,662,689 | 173,543,923 | 6,118,766 | ||||||
Per Unit Information (Basic/Diluted) | |||||||||
Net income and comprehensive income(1) | $0.91/$0.90 | $0.56/$0.56 | $0.35/$0.34 | ||||||
Net income and comprehensive income excluding fair value adjustments(2)(3) | $0.50/$0.50 | $0.54/$0.54 | $-0.04/$-0.04 | ||||||
FFO(2)(3)(4)(5) | $0.50/$0.49 | $0.58/$0.58 | $-0.08/$-0.09 | ||||||
Other adjustments | $0.00/$0.01 | $0.01/$0.00 | $-0.01/$0.01 | ||||||
FFO with adjustments(2)(3)(4) | $0.50/$0.50 | $0.59/$0.58 | $-0.09/$-0.08 | ||||||
Adjusted for: | |||||||||
ECL | $-0.01/$-0.01 | $0.01/$0.01 | $-0.02/$-0.02 | ||||||
Loss (gain) on derivative ? TRS | $0.04/$0.04 | $0.00/$0.00 | $0.04/$0.04 | ||||||
FFO sourced from condominium and townhome closings | $-0.01/$-0.01 | $-0.08/$-0.07 | $0.07/$0.06 | ||||||
FFO units impact from SmartVMC West LP Class D units | $0.03/$0.03 | $0.00/$0.00 | $0.03/$0.03 | ||||||
FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4) | $0.55/$0.55 | $0.52/$0.52 | $0.03/$0.03 | ||||||
Distributions declared | $0.463 | $0.463 | $? | ||||||
Payout Ratio Information | |||||||||
Payout Ratio to cash flows provided by operating activities | 187.5 | % | 128.2 | % | 59.3 | % | |||
Payout Ratio to ACFO(2)(3)(4)(5) | 101.9 | % | 84.6 | % | 17.3 | % | |||
Payout Ratio to ACFO with adjustments(2)(3)(4) | 100.7 | % | 84.0 | % | 16.7 | % | |||
Payout Ratio to ACFO with adjustments excluding impact of TRS, condominium and townhome sales, and SmartVMC West acquisition(2)(3)(4) | 90.2 | % | 99.3 | % | (9.1)% |
(1) Represents a GAAP measure.
(2) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
(3) Includes the Trust's proportionate share of equity accounted investments.
(4) See "Non-GAAP Measures" in this Press Release for a reconciliation of these measures to the nearest consolidated financial statement measure.
(5) The calculation of the Trust's FFO and ACFO and related payout ratios, including comparative amounts, are financial metrics that were determined based on the REALpac White Paper on FFO issued in January 2022 and REALpac White Paper on ACFO issued in February 2019, respectively. Comparison with other reporting issuers may not be appropriate. The payout ratio to FFO and the payout ratio to ACFO are calculated as declared distributions divided by FFO and ACFO, respectively.
(6) Total Units outstanding include Trust Units and LP Units, including Units classified as liabilities. LP Units classified as equity in the consolidated financial statements are presented as non-controlling interests.
(7) The diluted weighted average includes the vested portion of the deferred units issued pursuant to the deferred unit plan.
Year-to-Date Comparison to Prior Year
The following table presents key financial, per Unit, and payout ratio information for the six months ended June 30, 2022 and June 30, 2021:
(in thousands of dollars, except per Unit information) | June 30, 2022 | June 30, 2021 | Variance | ||||||
(A) | (B) | (A?B) | |||||||
Financial Information | |||||||||
Rentals from investment properties and other(1) | 400,819 | 392,775 | 8,044 | ||||||
Net base rent(1) | 252,506 | 244,830 | 7,676 | ||||||
Total recoveries(1) | 137,505 | 135,777 | 1,728 | ||||||
Miscellaneous revenue(1) | 5,731 | 5,839 | (108 | ) | |||||
Service and other revenues(1) | 5,077 | 6,329 | (1,252 | ) | |||||
Net income and comprehensive income(1) | 532,107 | 157,544 | 374,563 | ||||||
Net income and comprehensive income excluding fair value adjustments(2)(3) | 169,983 | 169,709 | 274 | ||||||
Cash flows provided by operating activities(1) | 146,789 | 141,652 | 5,137 | ||||||
Net rental income and other(1) | 245,378 | 235,269 | 10,109 | ||||||
NOI from condominium and townhome closings(2) | 1,076 | 14,094 | (13,018 | ) | |||||
NOI(2) | 253,902 | 255,072 | (1,170 | ) | |||||
Change in net rental income and other(2) | 4.3 | % | 2.5 | % | 1.8 | % | |||
Change in SPNOI(2) | 3.5 | % | 1.8 | % | 1.7 | % | |||
Change in SPNOI excluding ECL(2) | 0.6 | % | (2.6)% | 3.2 | % | ||||
FFO(2)(3)(4)(5) | 180,699 | 184,733 | (4,034 | ) | |||||
Other adjustments | 1,897 | 861 | 1,036 | ||||||
FFO with adjustments(2)(3)(4) | 182,596 | 185,594 | (2,998 | ) | |||||
Adjusted for: | |||||||||
ECL | (2,276 | ) | 4,581 | (6,857 | ) | ||||
Loss (gain) on derivative ? TRS | 6,238 | (1,070 | ) | 7,308 | |||||
FFO sourced from condominium and townhome closings | (1,076 | ) | (12,891 | ) | 11,815 | ||||
FFO sourced from SmartVMC West acquisition | (459 | ) | ? | (459 | ) | ||||
FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4) | 185,023 | 176,214 | 8,809 | ||||||
FFO with adjustments and Transactional FFO(2)(3)(4) | 182,596 | 187,181 | (4,585 | ) | |||||
ACFO(2)(3)(4)(5) | 166,025 | 179,401 | (13,376 | ) | |||||
Other adjustments | 1,897 | 861 | 1,036 | ||||||
ACFO with adjustments(2)(3)(4) | 167,922 | 180,262 | (12,340 | ) | |||||
Adjusted for: | |||||||||
Loss (gain) on derivative ? TRS | 6,238 | (1,070 | ) | 7,308 | |||||
ACFO sourced from condominium and townhome closings | (1,076 | ) | (14,094 | ) | 13,018 | ||||
ACFO sourced from SmartVMC West acquisition | (459 | ) | ? | (459 | ) | ||||
ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4) | 172,625 | 165,098 | 7,527 | ||||||
Distributions declared | 164,761 | 159,345 | 5,416 | ||||||
Shortfall of cash flows provided by operating activities over distributions declared(2) | (17,972 | ) | (17,693 | ) | (279 | ) | |||
Surplus of ACFO over distributions declared(2) | 1,264 | 20,056 | (18,792 | ) | |||||
Surplus of ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition over distributions declared(2) | 7,864 | 5,753 | 2,111 | ||||||
Units outstanding(6) | 178,122,655 | 172,280,187 | 5,842,468 | ||||||
Weighted average ? basic | 178,115,751 | 172,256,994 | 5,858,757 | ||||||
Weighted average ? diluted(7) | 179,626,838 | 173,480,822 | 6,146,016 | ||||||
Per Unit Information (Basic/Diluted) | |||||||||
Net income and comprehensive income(1) | $2.99/$2.96 | $0.91/$0.91 | $2.08/$2.05 | ||||||
Net income and comprehensive income excluding fair value adjustments(2)(3) | $0.95/$0.95 | $0.99/$0.98 | $-0.04/$-0.03 | ||||||
FFO(2)(3)(4)(5) | $1.01/$1.01 | $1.07/$1.06 | $-0.06/$-0.05 | ||||||
Other adjustments | $0.02/$0.01 | $0.01/$0.01 | $0.01/$0.00 | ||||||
FFO with adjustments(2)(3)(4) | $1.03/$1.02 | $1.08/$1.07 | $-0.05/$-0.05 | ||||||
Adjusted for: | |||||||||
ECL | $-0.01/$-0.01 | $0.03/$0.03 | $-0.04/$-0.04 | ||||||
Loss (gain) on derivative ? TRS | $0.04/$0.03 | $-0.01/$-0.01 | $0.05/$0.04 | ||||||
FFO sourced from condominium and townhome closings | $-0.01/$-0.01 | $-0.08/$-0.07 | $0.07/$0.06 | ||||||
FFO units impact from SmartVMC West LP Class D units | $0.02/$0.03 | $0.00/$0.00 | $0.02/$0.03 | ||||||
FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(2)(3)(4) | $1.07/$1.06 | $1.02/$1.02 | $0.05/$0.04 | ||||||
FFO with adjustments and Transactional FFO(2)(3)(4) | $1.03/$1.02 | $1.08/$1.07 | $-0.05/$-0.05 | ||||||
Distributions declared | $0.925 | $0.925 | $? | ||||||
Payout Ratio Information | |||||||||
Payout Ratio to cash flows provided by operating activities | 112.2 | % | 112.5 | % | (0.3)% | ||||
Payout Ratio to ACFO(2)(3)(4)(5) | 99.2 | % | 88.8 | % | 10.4 | % | |||
Payout Ratio to ACFO with adjustments(2)(3)(4) | 98.1 | % | 88.4 | % | 9.7 | % | |||
Payout Ratio to ACFO with adjustments excluding impact of TRS, condominium and townhome sales, and SmartVMC West acquisition(2)(3)(4) | 92.3 | % | 96.5 | % | (4.2)% |
(1) Represents a GAAP measure.
(2) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
(3) Includes the Trust's proportionate share of equity accounted investments.
(4) See "Non-GAAP Measures" in this Press Release for a reconciliation of these measures to the nearest consolidated financial statement measure.
(5) The calculation of the Trust's FFO and ACFO and related payout ratios, including comparative amounts, are financial metrics that were determined based on the REALpac White Paper on FFO issued in January 2022 and REALpac White Paper on ACFO issued in February 2019, respectively. Comparison with other reporting issuers may not be appropriate. The payout ratio to FFO and the payout ratio to ACFO are calculated as declared distributions divided by FFO and ACFO, respectively.
(6) Total Units outstanding include Trust Units and LP Units, including Units classified as liabilities. LP Units classified as equity in the consolidated financial statements are presented as non-controlling interests.
(7) The diluted weighted average includes the vested portion of the deferred units issued pursuant to the deferred unit plan.
Operational Highlights
For the three months ended June 30, 2022, net income and comprehensive income increased by $65.0 million as compared to the same period in 2021. This increase was primarily attributed to the following:
Partially offset by the following:
For the six months ended June 30, 2022, net income and comprehensive income increased by $374.6 million as compared to the same period in 2021. This increase was primarily attributed to the following:
Partially offset by the following:
Development and Intensification Summary
The following table summarizes the 282 identified mixed-use, recurring rental income and development income initiatives, which are included in the Trust's large development pipeline:
Underway | Active | Future | ||
Description | (Construction underway or expected to commence within next 2 years) | (Construction expected to commence within next 3?5 years) | (Construction expected to commence after 5 years) | Total |
Number of projects in which the Trust has an ownership interest | ||||
Residential Rental | 24 | 20 | 60 | 104 |
Seniors' Housing | 4 | 9 | 14 | 27 |
Self-storage | 12 | 7 | 17 | 36 |
Office Buildings | ? | 1 | 7 | 8 |
Hotels | ? | ? | 3 | 3 |
Subtotal ? Recurring rental income initiatives | 40 | 37 | 101 | 178 |
Condominium developments | 26 | 22 | 47 | 95 |
Townhome developments | 3 | 1 | 5 | 9 |
Subtotal ? Development income initiatives | 29 | 23 | 52 | 104 |
Total | 69 | 60 | 153 | 282 |
Trust's share of project area (in thousands of sq. ft.) | ||||
Recurring rental income initiatives | 4,600 | 3,900 | 12,000 | 20,500 |
Development income initiatives | 6,300 | 3,500 | 9,900 | 19,700 |
Total Trust's share of project area (in thousands of sq. ft.) | 10,900 | 7,400 | 21,900 | 40,200 |
Trust's share of such estimated costs (in millions of dollars) | 5,900 | 3,900 | ? (1) | 9,800 |
(1) The Trust has not fully determined the costs attributable to future projects expected to commence after five years and as such they are not included in this table.
The Trust is currently working on initiatives for the development of many properties, for which final municipal approvals have been obtained or are being actively pursued. Completion, milestone or occupancy dates of each of the projects described below may be delayed or adversely impacted as a result of, among other things, restrictions or delays related to the COVID-19 pandemic.
Proportionately Consolidated Balance Sheets (including the Trust's interests in equity accounted investments)
The following table presents the proportionately consolidated balance sheets, which includes a reconciliation of the Trust's proportionate share of equity accounted investments:
(in thousands of dollars) | June 30, 2022 | December 31, 2021 | ||||||
GAAP Basis | Proportionate Share Reconciliation | Total Proportionate Share(1) | GAAP Basis | Proportionate Share Reconciliation | Total Proportionate Share(1) | |||
Assets | ||||||||
Non-current assets | ||||||||
Investment properties | 10,285,753 | 905,316 | 11,191,069 | 9,847,078 | 837,451 | 10,684,529 | ||
Equity accounted investments | 650,487 | (650,487 | ) | ? | 654,442 | (654,442 | ) | ? |
Mortgages, loans and notes receivable | 352,921 | (93,702 | ) | 259,219 | 345,089 | (69,576 | ) | 275,513 |
Other financial assets | 228,707 | ? | 228,707 | 97,148 | ? | 97,148 | ||
Other assets | 82,814 | 7,643 | 90,457 | 80,940 | 7,465 | 88,405 | ||
Intangible assets | 44,473 | ? | 44,473 | 45,139 | ? | 45,139 | ||
11,645,155 | 168,770 | 11,813,925 | 11,069,836 | 120,898 | 11,190,734 | |||
Current assets | ||||||||
Residential development inventory | 29,749 | 81,670 | 111,419 | 27,399 | 67,828 | 95,227 | ||
Current portion of mortgages, loans and notes receivable | 95,254 | ? | 95,254 | 71,947 | ? | 71,947 | ||
Amounts receivable and other | 55,829 | (8,564 | ) | 47,265 | 49,542 | (8,637 | ) | 40,905 |
Prepaid expenses, deposits and deferred financing costs | 44,393 | 15,220 | 59,613 | 12,289 | 13,118 | 25,407 | ||
Cash and cash equivalents | 34,686 | 38,728 | 73,414 | 62,235 | 7,922 | 70,157 | ||
259,911 | 127,054 | 386,965 | 223,412 | 80,231 | 303,643 | |||
Total assets | 11,905,066 | 295,824 | 12,200,890 | 11,293,248 | 201,129 | 11,494,377 | ||
Liabilities | ||||||||
Non-current liabilities | ||||||||
Debt | 4,750,365 | 179,737 | 4,930,102 | 4,176,121 | 93,465 | 4,269,586 | ||
Other financial liabilities | 278,944 | ? | 278,944 | 326,085 | ? | 326,085 | ||
Other payables | 17,732 | 46 | 17,778 | 18,243 | ? | 18,243 | ||
5,047,041 | 179,783 | 5,226,824 | 4,520,449 | 93,465 | 4,613,914 | |||
Current liabilities | ||||||||
Current portion of debt | 378,239 | 17,289 | 395,528 | 678,406 | 35,086 | 713,492 | ||
Accounts payable and current portion of other payables | 263,391 | 98,752 | 362,143 | 253,078 | 72,578 | 325,656 | ||
641,630 | 116,041 | 757,671 | 931,484 | 107,664 | 1,039,148 | |||
Total liabilities | 5,688,671 | 295,824 | 5,984,495 | 5,451,933 | 201,129 | 5,653,062 | ||
Equity | ||||||||
Trust Unit equity | 5,175,826 | ? | 5,175,826 | 4,877,961 | ? | 4,877,961 | ||
Non-controlling interests | 1,040,569 | ? | 1,040,569 | 963,354 | ? | 963,354 | ||
6,216,395 | ? | 6,216,395 | 5,841,315 | ? | 5,841,315 | |||
Total liabilities and equity | 11,905,066 | 295,824 | 12,200,890 | 11,293,248 | 201,129 | 11,494,377 |
(1) This column contains non-GAAP measures because it includes figures that are recorded in equity accounted investments. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
Proportionately Consolidated Statements of Income and Comprehensive Income (including the Trust's Interests in Equity Accounted Investments)
The following tables present the proportionately consolidated statements of income and comprehensive income, which include a reconciliation of the Trust's proportionate share of equity accounted investments:
Quarterly Comparison to Prior Year
(in thousands of dollars) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | ||||||||||||
GAAP Basis | Proportionate Share Reconciliation | Total Proportionate Share(1) | GAAP Basis | Proportionate Share Reconciliation | Total Proportionate Share(1) | Variance of Total Proportionate Share(1) | ||||||||
Net rental income and other | ||||||||||||||
Rentals from investment properties and other | 198,296 | 7,018 | 205,314 | 193,937 | 5,039 | 198,976 | 6,338 | |||||||
Property operating costs and other | (73,332 | ) | (3,108 | ) | (76,440 | ) | (74,805 | ) | (2,108 | ) | (76,913 | ) | 473 | |
124,964 | 3,910 | 128,874 | 119,132 | 2,931 | 122,063 | 6,811 | ||||||||
Condo and townhome closings revenue and other(2) | ? | 4,511 | 4,511 | ? | 52,768 | 52,768 | (48,257 | ) | ||||||
Condo and townhome cost of sales and other | ? | (3,351 | ) | (3,351 | ) | ? | (38,740 | ) | (38,740 | ) | 35,389 | |||
? | 1,160 | 1,160 | ? | 14,028 | 14,028 | (12,868 | ) | |||||||
NOI | 124,964 | 5,070 | 130,034 | 119,132 | 16,959 | 136,091 | (6,057 | ) | ||||||
Other income and expenses | ||||||||||||||
General and administrative expense, net | (7,916 | ) | 18 | (7,898 | ) | (7,304 | ) | (5 | ) | (7,309 | ) | (589 | ) | |
Earnings from equity accounted investments | 3,785 | (3,785 | ) | ? | 21,751 | (21,751 | ) | ? | ? | |||||
Earnings from other(3) | 289 | (289 | ) | ? | ? | ? | ? | ? | ||||||
Fair value adjustment on revaluation of investment properties | 9,669 | 1,185 | 10,854 | 10,854 | 7,097 | 17,951 | (7,097 | ) | ||||||
Gain (loss) on sale of investment properties | 18 | ? | 18 | (68 | ) | ? | (68 | ) | 86 | |||||
Interest expense | (33,852 | ) | (1,637 | ) | (35,489 | ) | (36,653 | ) | (1,354 | ) | (38,007 | ) | 2,518 | |
Interest income | 3,866 | 41 | 3,907 | 3,395 | 20 | 3,415 | 492 | |||||||
Supplemental costs | ? | (603 | ) | (603 | ) | ? | (966 | ) | (966 | ) | 363 | |||
Fair value adjustment on financial instruments | 61,497 | ? | 61,497 | (14,122 | ) | ? | (14,122 | ) | 75,619 | |||||
Acquisition-related costs | (323 | ) | ? | (323 | ) | ? | ? | ? | (323 | ) | ||||
Net income and comprehensive income | 161,997 | ? | 161,997 | 96,985 | ? | 96,985 | 65,012 |
(1) This column contains non-GAAP measures because it includes figures that are recorded in equity accounted investments. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
(2) Includes additional partnership profit and other revenues.
(3) Represents SmartVMC West's operating results.
Year-to-Date Comparison to Prior Year
(in thousands of dollars) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | ||||||||||||
GAAP Basis | Proportionate Share Reconciliation | Total Proportionate Share(1) | GAAP Basis | Proportionate Share Reconciliation | Total Proportionate Share(1) | Variance of Total Proportionate Share(1) | ||||||||
Net rental income and other | ||||||||||||||
Rentals from investment properties and other | 400,819 | 13,510 | 414,329 | 392,775 | 10,070 | 402,845 | 11,484 | |||||||
Property operating costs and other | (155,441 | ) | (6,121 | ) | (161,562 | ) | (157,506 | ) | (4,361 | ) | (161,867 | ) | 305 | |
245,378 | 7,389 | 252,767 | 235,269 | 5,709 | 240,978 | 11,789 | ||||||||
Condo and townhome closings revenue and other(2) | ? | 4,517 | 4,517 | ? | 52,933 | 52,933 | (48,416 | ) | ||||||
Condo and townhome cost of sales and other | ? | (3,382 | ) | (3,382 | ) | ? | (38,839 | ) | (38,839 | ) | 35,457 | |||
? | 1,135 | 1,135 | ? | 14,094 | 14,094 | (12,959 | ) | |||||||
NOI | 245,378 | 8,524 | 253,902 | 235,269 | 19,803 | 255,072 | (1,170 | ) | ||||||
Other income and expenses | ||||||||||||||
General and administrative expense, net | (14,783 | ) | (104 | ) | (14,887 | ) | (14,784 | ) | (5 | ) | (14,789 | ) | (98 | ) |
Earnings from equity accounted investments | 3,211 | (3,211 | ) | ? | 37,069 | (37,069 | ) | ? | ? | |||||
Earnings from other(3) | 594 | (594 | ) | ? | ? | ? | ? | ? | ||||||
Fair value adjustment on revaluation of investment properties | 281,014 | 1,631 | 282,645 | (7,905 | ) | 20,930 | 13,025 | 269,620 | ||||||
Loss on sale of investment properties | (104 | ) | ? | (104 | ) | (58 | ) | ? | (58 | ) | (46 | ) | ||
Interest expense | (69,185 | ) | (3,028 | ) | (72,213 | ) | (73,854 | ) | (2,734 | ) | (76,588 | ) | 4,375 | |
Interest income | 6,826 | 49 | 6,875 | 6,997 | 42 | 7,039 | (164 | ) | ||||||
Supplemental costs | ? | (3,267 | ) | (3,267 | ) | ? | (967 | ) | (967 | ) | (2,300 | ) | ||
Fair value adjustment on financial instruments | 79,479 | ? | 79,479 | (25,190 | ) | ? | (25,190 | ) | 104,669 | |||||
Acquisition-related costs | (323 | ) | ? | (323 | ) | ? | ? | ? | (323 | ) | ||||
Net income and comprehensive income | 532,107 | ? | 532,107 | 157,544 | ? | 157,544 | 374,563 |
(1) This column contains non-GAAP measures because it includes figures that are recorded in equity accounted investments. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
(2) Includes additional partnership profit and other revenues.
(3) Represents SmartVMC West's operating results.
FFO, FFO with adjustments, and FFO with adjustments and Transactional FFO
The following tables reconciles net income and comprehensive income to FFO, FFO with adjustments, and FFO with adjustments and Transactional FFO:
Quarterly Comparison to Prior Year
Three Months Ended | Three Months Ended | |||||||
(in thousands of dollars, except per Unit amounts) | June 30, 2022 | June 30, 2021 | Variance ($) | Variance (%) | ||||
Net income and comprehensive income | 161,997 | 96,985 | 65,012 | N/R(7) | ||||
Add (deduct): | ||||||||
Fair value adjustment on revaluation of investment properties(1) | (9,669 | ) | (10,854 | ) | 1,185 | N/R(7) | ||
Fair value adjustment on financial instruments(2) | (61,497 | ) | 14,122 | (75,619 | ) | N/R(7) | ||
(Loss) Gain on derivative ? TRS | (7,843 | ) | 557 | (8,400 | ) | N/R(7) | ||
(Loss) Gain on sale of investment properties | (18 | ) | 68 | (86 | ) | N/R(7) | ||
Amortization of intangible assets | 333 | 333 | ? | ? | ||||
Amortization of tenant improvement allowance and other | 1,578 | 1,447 | 131 | 9.1 | ||||
Distributions on Units classified as liabilities recorded as interest expense | 1,083 | 970 | 113 | 11.6 | ||||
Distributions on vested deferred units recorded as interest expense | 728 | 416 | 312 | 75.0 | ||||
Adjustment on debt modification | (1,960 | ) | ? | (1,960 | ) | N/R(7) | ||
Salaries and related costs attributed to leasing activities(3) | 1,952 | 1,199 | 753 | 62.8 | ||||
Acquisition-related costs | 323 | ? | 323 | N/R(7) | ||||
Adjustments relating to equity accounted investments: | ||||||||
Rental revenue adjustment ? tenant improvement amortization | 96 | 101 | (5 | ) | (5.0 | ) | ||
Indirect interest with respect to the development portion(4) | 1,943 | 1,712 | 231 | 13.5 | ||||
Adjustment to indirect interest with respect to Transit City condo closings(4) | ? | (470 | ) | 470 | N/R(7) | |||
Fair value adjustment on revaluation of investment properties | (1,185 | ) | (7,097 | ) | 5,912 | N/R(7) | ||
Adjustment for supplemental costs | 603 | 966 | (363 | ) | (37.6 | ) | ||
FFO(5) | 88,464 | 100,455 | (11,991 | ) | (11.9 | ) | ||
Adjustments: | ||||||||
Other adjustments(6) | 982 | 625 | 357 | 57.1 | ||||
FFO with adjustments(5) | 89,446 | 101,080 | (11,634 | ) | (11.5 | ) |
(1) Fair value adjustment on revaluation of investment properties is described in "Investment Properties" in the Trust's MD&A.
(2) Fair value adjustment on financial instruments comprises the following financial instruments: units classified as liabilities, Earnout options, DUP, EIP, LTIP, TRS, interest rate swap agreement(s), and loans receivable and Earnout options recorded in the same period in 2021. The significant assumptions made in determining the fair value and fair value adjustments for these financial instruments are more thoroughly described in the Trust's unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2022. For details please see discussion in "Results of Operations" in the Trust's MD&A.
(3) Salaries and related costs attributed to leasing activities of $2.0 million were incurred in the three months ended June 30, 2022 (three months ended June 30, 2021 ? $1.2 million) and were eligible to be added back to FFO based on the definition of FFO, in the REALpac White Paper published in January 2022, which provided for an adjustment to incremental leasing expenses for the cost of salaried staff. This adjustment to FFO results in more comparability between Canadian publicly traded real estate entities that expensed their internal leasing departments and those that capitalized external leasing expenses.
(4) Indirect interest is not capitalized to properties under development and residential development inventory of equity accounted investments under IFRS but is a permitted adjustment under REALpac's definition of FFO. The amount is based on the total cost incurred with respect to the development portion of equity accounted investments multiplied by the Trust's weighted average cost of debt.
(5) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
(6) Represents adjustments relating to $1.0 million of costs associated with COVID-19 vaccination centres (three months ended June 30, 2021 ? $0.6 million).
(7) N/R ? Not representative.
Year-to-Date Comparison to Prior Year
(in thousands of dollars, except per Unit amounts) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | Variance ($) | Variance (%) | ||||
Net income and comprehensive income | 532,107 | 157,544 | 374,563 | N/R(7) | ||||
Add (deduct): | ||||||||
Fair value adjustment on revaluation of investment properties(1) | (281,014 | ) | 7,905 | (288,919 | ) | N/R(7) | ||
Fair value adjustment on financial instruments(2) | (79,479 | ) | 25,190 | (104,669 | ) | N/R(7) | ||
(Loss) gain on derivative ? TRS | (6,238 | ) | 1,070 | (7,308 | ) | N/R(7) | ||
Gain (loss) on sale of investment properties | 104 | (186 | ) | 290 | N/R(7) | |||
Amortization of intangible assets | 666 | 666 | ? | ? | ||||
Amortization of tenant improvement allowance and other | 3,237 | 3,768 | (531 | ) | (14.1 | ) | ||
Distributions on Units classified as liabilities recorded as interest expense | 2,127 | 1,941 | 186 | 9.6 | ||||
Distributions on vested deferred units recorded as interest expense | 1,405 | 948 | 457 | 48.2 | ||||
Adjustment on debt modification | (1,960 | ) | ? | (1,960 | ) | N/R(7) | ||
Salaries and related costs attributed to leasing activities(3) | 3,778 | 2,702 | 1,076 | 39.8 | ||||
Acquisition-related costs | 323 | ? | 323 | N/R(7) | ||||
Adjustments relating to equity accounted investments: | ||||||||
Rental revenue adjustment ? tenant improvement amortization | 191 | 200 | (9 | ) | (4.5 | ) | ||
Indirect interest with respect to the development portion(4) | 3,816 | 3,418 | 398 | 11.6 | ||||
Adjustment to indirect interest with respect to Transit City condo closings(4) | ? | (470 | ) | 470 | N/R(7) | |||
Fair value adjustment on revaluation of investment properties | (1,631 | ) | (20,930 | ) | 19,299 | (92.2 | ) | |
Adjustment for supplemental costs | 3,267 | 967 | 2,300 | N/R(7) | ||||
FFO(5) | 180,699 | 184,733 | (4,034 | ) | (2.2 | ) | ||
Adjustments: | ||||||||
Other adjustments(6) | 1,897 | 861 | 1,036 | N/R(7) | ||||
FFO with adjustments(5) | 182,596 | 185,594 | (2,998 | ) | (1.6 | ) | ||
Transactional FFO ? gain on sale of land to co-owners | ? | 1,587 | (1,587 | ) | N/R(7) | |||
FFO with adjustments and Transactional FFO(5) | 182,596 | 187,181 | (4,585 | ) | (2.4 | ) |
(1) Fair value adjustment on revaluation of investment properties is described in "Investment Properties" in the Trust's MD&A.
(2) Fair value adjustment on financial instruments comprises the following financial instruments: units classified as liabilities, Earnout options, DUP, EIP, LTIP, TRS, interest rate swap agreement(s), and loans receivable and Earnout options recorded in the same period in 2021. The significant assumptions made in determining the fair value and fair value adjustments for these financial instruments are more thoroughly described in the Trust's unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2022. For details please see discussion in "Results of Operations" in the Trust's MD&A.
(3) Salaries and related costs attributed to leasing activities of $3.8 million were incurred in the six months ended June 30, 2022 (six months ended June 30, 2021 ? $2.7 million) and were eligible to be added back to FFO based on the definition of FFO, in the REALpac White Paper published in January 2022, which provided for an adjustment to incremental leasing expenses for the cost of salaried staff. This adjustment to FFO results in more comparability between Canadian publicly traded real estate entities that expensed their internal leasing departments and those that capitalized external leasing expenses.
(4) Indirect interest is not capitalized to properties under development and residential development inventory of equity accounted investments under IFRS but is a permitted adjustment under REALpac's definition of FFO. The amount is based on the total cost incurred with respect to the development portion of equity accounted investments multiplied by the Trust's weighted average cost of debt.
(5) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
(6) Represents adjustments relating to $1.9 million of costs associated with COVID-19 vaccination centres (six months ended June 30, 2021 ? $0.9 million).
(7) N/R ? Not representative.
The following table presents FFO excluding anomalous transactions for the three and six months ended June 30, 2022:
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
(in thousands of dollars) | 2022 | 2021 | Variance ($) | 2022 | 2021 | Variance ($) | ||||||
FFO with adjustments(1) | 89,446 | 101,080 | (11,634 | ) | 182,596 | 185,594 | (2,998 | ) | ||||
Adjusted for: | ||||||||||||
ECL | (1,214 | ) | 2,274 | (3,488 | ) | (2,276 | ) | 4,581 | (6,857 | ) | ||
Loss (gain) on derivative ? TRS | 7,843 | (557 | ) | 8,400 | 6,238 | (1,070 | ) | 7,308 | ||||
FFO sourced from condominium and townhome closings | (1,100 | ) | (12,891 | ) | 11,791 | (1,076 | ) | (12,891 | ) | 11,815 | ||
FFO sourced from SmartVMC West acquisition | (207 | ) | ? | (207 | ) | (459 | ) | ? | (459 | ) | ||
FFO with adjustments excluding impact of ECL, TRS, condominium and townhome closings, and SmartVMC West acquisition(1) | 94,768 | 89,906 | 4,862 | 185,023 | 176,214 | 8,809 |
(1) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
ACFO and ACFO with adjustments
The following table reconciles cash flows provided by operating activities to ACFO and ACFO with adjustments:
Quarterly Comparison to Prior Year
(in thousands of dollars) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Variance ($)/(%) | |||
Cash flows provided by operating activities | 43,970 | 62,168 | (18,198 | ) | ||
Adjustments to working capital items that are not indicative of sustainable cash available for distribution(1) | 25,261 | 5,462 | 19,799 | |||
Distributions on Units classified as liabilities recorded as interest expense | 1,083 | 970 | 113 | |||
Distributions on vested deferred units recorded as interest expense | 728 | 416 | 312 | |||
Expenditures on direct leasing costs and tenant incentives | 1,922 | 1,583 | 339 | |||
Expenditures on tenant incentives for properties under development | 596 | 458 | 138 | |||
Actual sustaining capital expenditures | (2,847 | ) | (1,569 | ) | (1,278 | ) |
Actual sustaining leasing commissions | (419 | ) | (1,251 | ) | 832 | |
Actual sustaining tenant improvements | (1,506 | ) | (790 | ) | (716 | ) |
Non-cash interest expense, net of other financing costs | 7,252 | 12,782 | (5,530 | ) | ||
Non-cash interest income | 1,572 | (961 | ) | 2,533 | ||
Acquisition-related costs, net | 323 | ? | 323 | |||
Distributions from equity accounted investments | (1,533 | ) | (962 | ) | (571 | ) |
Adjustments relating to equity accounted investments: | ||||||
Cash flows from operating activities including working capital adjustments | 2,674 | 14,653 | (11,979 | ) | ||
Notional interest capitalization(2) | 1,943 | 1,712 | 231 | |||
Adjustment to indirect interest with respect to Transit City condo closings(3) | ? | (470 | ) | 470 | ||
Actual sustaining capital and leasing expenditures | (179 | ) | (14 | ) | (165 | ) |
Non-cash interest expense | 31 | 59 | (28 | ) | ||
ACFO(3) | 80,871 | 94,246 | (13,375 | ) | ||
Other adjustments(4) | 982 | 625 | 357 | |||
ACFO with adjustments(3) | 81,853 | 94,871 | (13,018 | ) | ||
ACFO(3) | 80,871 | 94,246 | (13,375 | ) | ||
Distributions declared | 82,422 | 79,685 | 2,737 | |||
Surplus of ACFO over distributions declared | (1,551 | ) | 14,561 | (16,112 | ) | |
Payout Ratio Information: | ||||||
Payout Ratio to ACFO(3) | 101.9 | % | 84.6 | % | 17.3 | % |
Payout Ratio to ACFO with adjustments(3) | 100.7 | % | 84.0 | % | 16.7 | % |
Payout Ratio to ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition(3)(5) | 90.2 | % | 99.3 | % | (9.1) % |
(1) Adjustments to working capital items include, but are not limited to, changes in prepaid expenses and deposits, accounts receivables, accounts payables and other working capital items that are not indicative of sustainable cash available for distribution.
(2) See the "Indirect interest with respect to the development portion" as presented in the "Funds From Operations" subsection in the Trust's MD&A.
(3) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
(4) Represents adjustments relating to $1.0 million of costs associated with COVID-19 vaccination centres (three months ended June 30, 2021 ? $0.6 million).
(5) For the three months ended June 30, 2022, excludes $2.7 million of distributions declared in connection with SmartVMC West LP Class D units (three months ended June 30, 2021 ? $nil).
Year-to-Date Comparison to Prior Year
(in thousands of dollars) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | Variance ($)/(%) | |||
Cash flows provided by operating activities | 146,789 | 141,652 | 5,137 | |||
Adjustments to working capital items that are not indicative of sustainable cash available for distribution(1) | 20,872 | 7,461 | 13,411 | |||
Distributions on Units classified as liabilities recorded as interest expense | 2,127 | 1,941 | 186 | |||
Distributions on vested deferred units recorded as interest expense | 1,405 | 948 | 457 | |||
Expenditures on direct leasing costs and tenant incentives | 4,361 | 2,644 | 1,717 | |||
Expenditures on tenant incentives for properties under development | 2,276 | 730 | 1,546 | |||
Actual sustaining capital expenditures | (5,022 | ) | (2,930 | ) | (2,092 | ) |
Actual sustaining leasing commissions | (929 | ) | (1,855 | ) | 926 | |
Actual sustaining tenant improvements | (3,454 | ) | (1,247 | ) | (2,207 | ) |
Non-cash interest expense, net of other financing costs | (8,953 | ) | 11,189 | (20,142 | ) | |
Non-cash interest income | 733 | (239 | ) | 972 | ||
Acquisition-related costs, net | 323 | ? | 323 | |||
Gain on sale of land to co-owners | ? | 1,587 | (1,587 | ) | ||
Distributions from equity accounted investments | (1,959 | ) | (1,570 | ) | (389 | ) |
Adjustments relating to equity accounted investments: | ||||||
Cash flows from operating activities including working capital adjustments | 3,796 | 16,204 | (12,408 | ) | ||
Notional interest capitalization(2) | 3,816 | 3,418 | 398 | |||
Adjustment to indirect interest with respect to Transit City condo closings(2) | ? | (470 | ) | 470 | ||
Actual sustaining capital and leasing expenditures | (272 | ) | (88 | ) | (184 | ) |
Non-cash interest expense | 116 | 26 | 90 | |||
ACFO(3) | 166,025 | 179,401 | (13,376 | ) | ||
Other adjustments(4) | 1,897 | 861 | 1,036 | |||
ACFO with adjustments(3) | 167,922 | 180,262 | (12,340 | ) | ||
ACFO(3) | 166,025 | 179,401 | (13,376 | ) | ||
Distributions declared | 164,761 | 159,345 | 5,416 | |||
Surplus of ACFO over distributions declared | 1,264 | 20,056 | (18,792 | ) | ||
Payout Ratio Information: | ||||||
Payout Ratio to ACFO(3) | 99.2 | % | 88.8 | % | 10.4 | % |
Payout Ratio to ACFO with adjustments(3) | 98.1 | % | 88.4 | % | 9.7 | % |
Payout Ratio to ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition(3)(5) | 92.3 | % | 96.5 | % | (4.2) % |
(1) Adjustments to working capital items include, but are not limited to, changes in prepaid expenses and deposits, accounts receivables, accounts payables and other working capital items that are not indicative of sustainable cash available for distribution.
(2) See the "Indirect interest with respect to the development portion" as presented in the "Funds From Operations" subsection in the Trust's MD&A.
(3) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
(4) Represents adjustments relating to $1.9 million of costs associated with COVID-19 vaccination centres (six months ended June 30, 2021 ? $0.9 million).
(5) For the six months ended June 30, 2022, excludes $5.4 million of distributions declared in connection with SmartVMC West LP Class D units (six months ended June 30, 2021 ? $nil).
The following table presents ACFO excluding anomalous transactions for the three and six months ended June 30, 2022:
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
(in thousands of dollars) | 2022 | 2021 | Variance ($) | 2022 | 2021 | Variance ($) | ||||||
ACFO with adjustments(1) | 81,853 | 94,871 | (13,018 | ) | 167,922 | 180,262 | (12,340 | ) | ||||
Adjusted for: | ||||||||||||
Loss (gain) on derivative ? TRS | 7,843 | (557 | ) | 8,400 | 6,238 | (1,070 | ) | 7,308 | ||||
ACFO sourced from condominium and townhome closings | (1,100 | ) | (14,028 | ) | 12,928 | (1,076 | ) | (14,094 | ) | 13,018 | ||
ACFO sourced from SmartVMC West acquisition | (207 | ) | ? | (207 | ) | (459 | ) | ? | (459 | ) | ||
ACFO with adjustments excluding impact of TRS, condominium and townhome closings, and SmartVMC West acquisition(1) | 88,389 | 80,286 | 8,103 | 172,625 | 165,098 | 7,527 |
(1) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
Net Operating Income
The following tables summarize NOI, related ratios and recovery ratios, provide additional information, and reflect the Trust's proportionate share of equity accounted investments, the sum of which represent a non-GAAP measure:
Quarterly Comparison to Prior Year
(in thousands of dollars) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | ||||||||||||
Trust portion excluding EAI | Equity Accounted Investments | Total Proportionate Share(1) | Trust portion excluding EAI | Equity Accounted Investments | Total Proportionate Share(1) | Variance(1) | ||||||||
(A) | (B) | (A?B) | ||||||||||||
Net base rent | 127,232 | 4,311 | 131,543 | 123,500 | 3,158 | 126,658 | 4,885 | |||||||
Property tax and insurance recoveries | 44,788 | 734 | 45,522 | 45,370 | 565 | 45,935 | (413 | ) | ||||||
Property operating cost recoveries | 20,331 | 1,036 | 21,367 | 18,625 | 735 | 19,360 | 2,007 | |||||||
Miscellaneous revenue | 3,416 | 937 | 4,353 | 2,998 | 581 | 3,579 | 774 | |||||||
Rentals from investment properties | 195,767 | 7,018 | 202,785 | 190,493 | 5,039 | 195,532 | 7,253 | |||||||
Service and other revenues | 2,529 | ? | 2,529 | 3,444 | ? | 3,444 | (915 | ) | ||||||
Rentals from investment properties and other(2) | 198,296 | 7,018 | 205,314 | 193,937 | 5,039 | 198,976 | 6,338 | |||||||
Recoverable tax and insurance costs | (46,055 | ) | (775 | ) | (46,830 | ) | (47,668 | ) | (578 | ) | (48,246 | ) | 1,416 | |
Recoverable CAM costs | (22,299 | ) | (991 | ) | (23,290 | ) | (19,736 | ) | (682 | ) | (20,418 | ) | (2,872 | ) |
Property management fees and costs | (882 | ) | (243 | ) | (1,125 | ) | (172 | ) | (157 | ) | (329 | ) | (796 | ) |
Non-recoverable operating costs | (2,435 | ) | (1,076 | ) | (3,511 | ) | (1,508 | ) | (679 | ) | (2,187 | ) | (1,324 | ) |
ECL | 1,237 | (23 | ) | 1,214 | (2,262 | ) | (12 | ) | (2,274 | ) | 3,488 | |||
Property operating costs | (70,434 | ) | (3,108 | ) | (73,542 | ) | (71,346 | ) | (2,108 | ) | (73,454 | ) | (88 | ) |
Other expenses | (2,529 | ) | ? | (2,529 | ) | (3,459 | ) | ? | (3,459 | ) | 930 | |||
Property operating costs and other(2) | (72,963 | ) | (3,108 | ) | (76,071 | ) | (74,805 | ) | (2,108 | ) | (76,913 | ) | 842 | |
Net rental income and other | 125,333 | 3,910 | 129,243 | 119,132 | 2,931 | 122,063 | 7,180 | |||||||
Condo and townhome closings revenue | ? | 4,511 | 4,511 | ? | 52,768 | 52,768 | (48,257 | ) | ||||||
Condo and townhome cost of sales | ? | (3,106 | ) | (3,106 | ) | ? | (38,705 | ) | (38,705 | ) | 35,599 | |||
Marketing and selling costs | (369 | ) | (245 | ) | (614 | ) | ? | (35 | ) | (35 | ) | (579 | ) | |
Net profit on condo and townhome closings | (369 | ) | 1,160 | 791 | ? | 14,028 | 14,028 | (13,237 | ) | |||||
NOI(3) | 124,964 | 5,070 | 130,034 | 119,132 | 16,959 | 136,091 | (6,057 | ) | ||||||
Net rental income and other as a percentage of net base rent (%) | 98.5 | 90.7 | 98.3 | 96.5 | 92.8 | 96.4 | 1.9 | |||||||
Net rental income and other as a percentage of rentals from investment properties (%) | 64.0 | 55.7 | 63.7 | 62.5 | 58.2 | 62.4 | 1.3 | |||||||
Net rental income and other as a percentage of rentals from investment properties and other (%) | 63.2 | 55.7 | 62.9 | 61.4 | 58.2 | 61.3 | 1.6 | |||||||
Recovery Ratio (including prior year adjustments) (%) | 95.3 | 100.2 | 95.4 | 94.9 | 103.2 | 95.1 | 0.3 | |||||||
Recovery Ratio (excluding prior year adjustments) (%) | 94.8 | 99.9 | 94.9 | 95.4 | 113.0 | 95.7 | (0.8 | ) |
(1) This column contains non-GAAP measures because it includes figures that are recorded in equity accounted investments ? that are not explicitly disclosed and/or presented in the unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2022 and June 30, 2021. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
(2) As reflected under the column "Trust portion excluding EAI" in the table above, this amount represents a GAAP measure.
(3) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
Year-to-Date Comparison to Prior Year
(in thousands of dollars) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | ||||||||||||
Trust portion excluding EAI | Equity Accounted Investments | Total Proportionate Share(1) | Trust portion excluding EAI | Equity Accounted Investments | Total Proportionate Share(1) | Variance of Total Proportionate Share(1) | ||||||||
(A) | (B) | (A?B) | ||||||||||||
Net base rent | 252,506 | 8,391 | 260,897 | 244,830 | 6,202 | 251,032 | 9,865 | |||||||
Property tax and insurance recoveries | 89,850 | 1,504 | 91,354 | 92,744 | 1,221 | 93,965 | (2,611 | ) | ||||||
Property operating cost recoveries | 47,655 | 1,957 | 49,612 | 43,033 | 1,603 | 44,636 | 4,976 | |||||||
Miscellaneous revenue | 5,731 | 1,658 | 7,389 | 5,839 | 1,044 | 6,883 | 506 | |||||||
Rentals from investment properties | 395,742 | 13,510 | 409,252 | 386,446 | 10,070 | 396,516 | 12,736 | |||||||
Service and other revenues | 5,077 | ? | 5,077 | 6,329 | ? | 6,329 | (1,252 | ) | ||||||
Rentals from investment properties and other(2) | 400,819 | 13,510 | 414,329 | 392,775 | 10,070 | 402,845 | 11,484 | |||||||
Recoverable tax and insurance costs | (93,148 | ) | (1,558 | ) | (94,706 | ) | (97,024 | ) | (1,231 | ) | (98,255 | ) | 3,549 | |
Recoverable CAM costs | (52,292 | ) | (1,941 | ) | (54,233 | ) | (46,124 | ) | (1,489 | ) | (47,613 | ) | (6,620 | ) |
Property management fees and costs | (1,940 | ) | (453 | ) | (2,393 | ) | (461 | ) | (300 | ) | (761 | ) | (1,632 | ) |
Non-recoverable operating costs | (4,939 | ) | (2,095 | ) | (7,034 | ) | (2,982 | ) | (1,331 | ) | (4,313 | ) | (2,721 | ) |
ECL | 2,350 | (74 | ) | 2,276 | (4,571 | ) | (10 | ) | (4,581 | ) | 6,857 | |||
Property operating costs | (149,969 | ) | (6,121 | ) | (156,090 | ) | (151,162 | ) | (4,361 | ) | (155,523 | ) | (567 | ) |
Other expenses | (5,077 | ) | ? | (5,077 | ) | (6,344 | ) | ? | (6,344 | ) | 1,267 | |||
Property operating costs and other(2) | (155,046 | ) | (6,121 | ) | (161,167 | ) | (157,506 | ) | (4,361 | ) | (161,867 | ) | 700 | |
Net rental income and other | 245,773 | 7,389 | 253,162 | 235,269 | 5,709 | 240,978 | 12,184 | |||||||
Condo and townhome closings revenue | ? | 4,517 | 4,517 | ? | 52,933 | 52,933 | (48,416 | ) | ||||||
Condo and townhome cost of sales | ? | (3,110 | ) | (3,110 | ) | ? | (38,804 | ) | (38,804 | ) | 35,694 | |||
Marketing and selling costs | (395 | ) | (272 | ) | (667 | ) | ? | (35 | ) | (35 | ) | (632 | ) | |
Net profit on condo and townhome closings | (395 | ) | 1,135 | 740 | ? | 14,094 | 14,094 | (13,354 | ) | |||||
NOI(3) | 245,378 | 8,524 | 253,902 | 235,269 | 19,803 | 255,072 | (1,170 | ) | ||||||
Net rental income and other as a percentage of net base rent (%) | 97.3 | 88.1 | 97.0 | 96.1 | 92.1 | 96.0 | 1.0 | |||||||
Net rental income and other as a percentage of rentals from investment properties (%) | 62.1 | 54.7 | 61.9 | 60.9 | 56.7 | 60.8 | 1.1 | |||||||
Net rental income and other as a percentage of rentals from investment properties and other (%) | 61.3 | 54.7 | 61.1 | 59.9 | 56.7 | 59.8 | 1.3 | |||||||
Recovery Ratio (including prior year adjustments) (%) | 94.5 | 98.9 | 94.6 | 94.9 | 103.8 | 95.0 | (0.4 | ) | ||||||
Recovery Ratio (excluding prior year adjustments) (%) | 94.3 | 97.7 | 94.3 | 95.2 | 108.6 | 95.5 | (1.2 | ) |
(1) This column contains non-GAAP measures because it includes figures that are recorded in equity accounted investments ? that are not explicitly disclosed and/or presented in the unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2022 and June 30, 2021. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
(2) As reflected under the column "Trust portion excluding EAI" in the table above, this amount represents a GAAP measure.
(3) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
Same Properties NOI
NOI (a non-GAAP financial measure) from continuing operations represents: i) rentals from investment properties and other revenues less property operating costs and other expenses, and ii) net profit from condominium sales. Disclosing the NOI contribution from each of same properties, acquisitions, dispositions, Earnouts and Development activities highlights the impact each component has on aggregate NOI. Straight-line rent, lease terminations and other adjustments, and amortization of tenant incentives have been excluded from Same Properties NOI, as have NOI from acquisitions, dispositions, Earnouts and Development activities, and ECL. This has been done in order to more directly highlight the impact of changes in occupancy, rent uplift and productivity.
Quarterly Comparison to Prior Year
Three Months Ended | Three Months Ended | |||||||
(in thousands of dollars) | June 30, 2022 | June 30, 2021 | Variance ($) | Variance (%) | ||||
Net rental income | 124,964 | 119,147 | 5,817 | 4.9 | ||||
Service and other revenues | 2,529 | 3,444 | (915 | ) | (26.6 | ) | ||
Other expenses | (2,529 | ) | (3,459 | ) | 930 | (26.9 | ) | |
NOI(1) | 124,964 | 119,132 | 5,832 | 4.9 | ||||
NOI from equity accounted investments(1) | 5,070 | 16,959 | (11,889 | ) | (70.1 | ) | ||
Total portfolio NOI before adjustments(1) | 130,034 | 136,091 | (6,057 | ) | (4.5 | ) | ||
Adjustments: | ||||||||
Royalties | 276 | 208 | 68 | 32.7 | ||||
Straight-line rent | (304 | ) | (553 | ) | 249 | (45.0 | ) | |
Lease termination and other adjustments | 97 | (496 | ) | 593 | N/R(2) | |||
Net profit on condo and townhome closings(3) | (791 | ) | (14,028 | ) | 13,237 | N/R(2) | ||
Amortization of tenant incentives | 1,725 | 1,600 | 125 | 7.8 | ||||
Total portfolio NOI after adjustments(1) | 131,037 | 122,822 | 8,215 | 6.7 | ||||
NOI sourced from: | ||||||||
Acquisitions | (1,699 | ) | 25 | (1,724 | ) | N/R(2) | ||
Dispositions | (19 | ) | (469 | ) | 450 | (95.9 | ) | |
Earnouts and Developments | (863 | ) | (43 | ) | (820 | ) | N/R(2) | |
Same Properties NOI(1) | 128,456 | 122,335 | 6,121 | 5.0 | ||||
Add back: Bad debt expense/ECL | (1,230 | ) | 2,300 | (3,530 | ) | N/R(2) | ||
Same Properties NOI excluding ECL(1) | 127,226 | 124,635 | 2,591 | 2.1 |
(1) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
(2) N/R ? Not representative.
(3) Includes marketing costs.
Year-to-Date Comparison to Prior Year
Six Months Ended | Six Months Ended | |||||||
(in thousands of dollars) | June 30, 2022 | June 30, 2021 | Variance ($) | Variance (%) | ||||
Net rental income | 245,378 | 235,284 | 10,094 | 4.3 | ||||
Service and other revenues | 5,077 | 6,329 | (1,252 | ) | (19.8 | ) | ||
Other expenses | (5,077 | ) | (6,344 | ) | 1,267 | 20.0 | ||
NOI(1) | 245,378 | 235,269 | 10,109 | 4.3 | ||||
NOI from equity accounted investments(1) | 8,524 | 19,803 | (11,279 | ) | (57.0 | ) | ||
Total portfolio NOI before adjustments(1) | 253,902 | 255,072 | (1,170 | ) | (0.5 | ) | ||
Adjustments: | ||||||||
Royalties | 512 | 409 | 103 | 25.2 | ||||
Straight-line rent | (381 | ) | (89 | ) | (292 | ) | N/R(2) | |
Lease termination and other adjustments | (145 | ) | (940 | ) | 795 | (84.6 | ) | |
Net profit on condo and townhome closings(3) | (740 | ) | (14,094 | ) | 13,354 | N/R(2) | ||
Amortization of tenant incentives | 3,534 | 4,074 | (540 | ) | (13.3 | ) | ||
Total portfolio NOI after adjustments(1) | 256,682 | 244,432 | 12,250 | 5.0 | ||||
Less NOI sourced from: | ||||||||
Acquisitions | (3,015 | ) | 125 | (3,140 | ) | N/R(2) | ||
Dispositions | (13 | ) | (1,038 | ) | 1,025 | N/R(2) | ||
Earnouts and Developments | (1,808 | ) | (191 | ) | (1,617 | ) | N/R(2) | |
Same Properties NOI(1) | 251,846 | 243,328 | 8,518 | 3.5 | ||||
Add back: ECL | (2,275 | ) | 4,636 | (6,911 | ) | N/R(2) | ||
Same Properties NOI excluding ECL(1) | 249,571 | 247,964 | 1,607 | 0.6 |
(1) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
(2) N/R ? Not representative.
Adjusted EBITDA
The following table presents a reconciliation of net income and comprehensive income to Adjusted EBITDA:
Rolling 12 Months Ended | ||||||
(in thousands of dollars) | June 30, 2022 | June 30, 2021 | Variance ($) | |||
Net income and comprehensive income | 1,362,238 | 316,959 | 1,045,279 | |||
Add (deduct) the following items: | ||||||
Interest expense | 147,566 | 156,129 | (8,563 | ) | ||
Interest income | (12,169 | ) | (15,167 | ) | 2,998 | |
Yield maintenance costs | ? | 11,954 | (11,954 | ) | ||
Amortization of equipment and intangible assets | 3,741 | 4,540 | (799 | ) | ||
Amortization of tenant improvements | 6,964 | 8,166 | (1,202 | ) | ||
Fair value adjustments on revaluation of investment properties | (948,875 | ) | (2,904 | ) | (945,971 | ) |
Fair value adjustments on revaluation of financial instruments | (72,401 | ) | 40,715 | (113,116 | ) | |
Fair value adjustment on TRS | (1,666 | ) | 1,070 | (2,736 | ) | |
Adjustment for supplemental costs | 4,919 | 2,094 | 2,825 | |||
Loss (gain) on sale of investment properties | 20 | (388 | ) | 408 | ||
Gain on sale of land to co-owners (Transactional FFO) | 336 | 2,332 | (1,996 | ) | ||
Acquisition-related costs | 3,114 | 166 | 2,948 | |||
Adjusted EBITDA(1) | 493,787 | 525,666 | (31,879 | ) | ||
Adjusted EBITDA(1) | 493,787 | 525,666 | (31,879 | ) | ||
Less: Condo and townhome closings | (7,080 | ) | (61,912 | ) | 54,832 | |
Add: ECL | (3,109 | ) | 19,760 | (22,869 | ) | |
Adjusted EBITDA excluding condo and townhome closings and ECL(1) | 483,598 | 483,514 | 84 |
(1) Represents a non-GAAP measure. The Trust's method of calculating non-GAAP measures may differ from other reporting issuers' methods and, accordingly, may not be comparable. For additional information, please see "Non-GAAP Measures" in this Press Release.
Non-GAAP Measures
The non-GAAP measures used in this Press Release, including but not limited to, FFO per Unit, Unencumbered Assets, NOI, Debt to Aggregate Assets, Interest Coverage Ratio, Adjusted Debt to Adjusted EBITDA, Unsecured/Secured Debt Ratio, FFO, FFO with adjustments, FFO per Unit with adjustments, Transactional FFO, ACFO, Payout Ratio to ACFO, Same Properties NOI, Investment properties ? non-GAAP, Debt ? non-GAAP, Debt to Gross Book Value, Unencumbered Assets to Unsecured Debt, Weighted Average Interest Rate, and Total Proportionate Share, do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and are therefore unlikely to be comparable to similar measures presented by other issuers. Additional information regarding these non-GAAP measures is available in the Management's Discussion and Analysis of the Trust for the three and six months ended June 30, 2022, dated August 11, 2022 (the "MD&A), and is incorporated by reference. The information is found in the "Presentation of Certain Terms Including Non-GAAP Measures" and "Non-GAAP Measures" sections of the MD&A, which is available on SEDAR at www.sedar.com. Reconciliations of non-GAAP financial measures to the most directly comparable IFRS measures are found in the following sections of this Press Release: "Proportionately Consolidated Balance Sheets (including the Trust's interests in equity accounted investments)", "Proportionately Consolidated Statements of Income and Comprehensive Income (including the Trust's Interests in Equity Accounted Investments)", "FFO, FFO with adjustments, and FFO with adjustments and Transactional FFO", "ACFO and ACFO with adjustments", "Net Operating Income", "Same Properties NOI", and "Adjusted EBITDA".
Full reports of the financial results of the Trust for the three and six months ended June 30, 2022 are outlined in the unaudited interim condensed consolidated financial statements and the related MD&A of the Trust for the three and six months ended June 30, 2022, which are available on SEDAR at www.sedar.com.
Conference Call
SmartCentres will hold a conference call on Friday, August 12, 2022 at 10:00 a.m. (ET). Participating on the call will be members of SmartCentres' senior management.
Investors are invited to access the call by dialing 1-855-353-9183 and then keying in the participant access code 37281#. You will be required to identify yourself and the organization on whose behalf you are participating.
A recording of this call will be made available Friday, August 12, 2022 beginning at 8:30 p.m. (ET) through to 8:30 p.m. (ET) on Friday, August 19, 2022. To access the recording, please call 1-855-201-2300, enter the conference access code 37281# and then key in the playback access code 0112310#.
About SmartCentres
SmartCentres Real Estate Investment Trust is one of Canada's largest fully integrated REITs, with a best-in-class portfolio featuring 185 strategically located properties in communities across the country. SmartCentres has approximately $11.9 billion in assets and owns 34.7 million square feet of income producing value-oriented retail and first-class office space with 97.6% occupancy, on 3,500 acres of owned land across Canada.
SmartCentres continues to focus on enhancing the lives of Canadians by planning and developing complete, connected, mixed-use communities on its existing retail properties. Project 512, a publicly announced $15.2 billion intensification program ($9.8 billion at SmartCentres' share) represents the REIT's current major development focus on which construction is expected to commence within the next five years. This intensification program consists of rental apartments, condos, seniors' residences and hotels, to be developed under the SmartLiving banner, and retail, office, and storage facilities, to be developed under the SmartCentres banner.
SmartCentres' intensification program is expected to produce an additional 58.3 million square feet (40.2 million square feet at SmartCentres' share) of space, 28.3 million square feet (18.3 million square feet at SmartCentres' share) of which has or will commence construction within the next five years. From shopping centres to city centres, SmartCentres is uniquely positioned to reshape the Canadian urban and urban-suburban landscape.
Included in this intensification program is the Trust's share of SmartVMC which, when completed, is expected to include approximately 20.0 million square feet of mixed-use space in Vaughan, Ontario. Construction of the first five sold-out phases of Transit City Condominiums that represent 2,789 residential units continues to progress. Final closings of the first three phases of Transit City Condominiums began ahead of budget and ahead of schedule in August 2020 and all 1,741 units, in addition to the 22 townhomes that complete these phases, have now closed. The fourth and fifth sold-out phases representing 1,026 units are currently under construction and are expected to close in 2023.
Certain statements in this Press Release are "forward-looking statements" that reflect management's expectations regarding the Trust's future growth, results of operations, performance and business prospects and opportunities. More specifically, certain statements including, but not limited to, statements related to SmartCentres' expectations relating to cash collections, SmartCentres' expected or planned development plans and joint venture projects, including the described type, scope, costs and other financial metrics and the expected timing of construction and condominium closings and statements that contain words such as "could", "should", "can", "anticipate", "expect", "believe", "will", "may" and similar expressions and statements relating to matters that are not historical facts, constitute "forward-looking statements". These forward-looking statements are presented for the purpose of assisting the Trust's Unitholders and financial analysts in understanding the Trust's operating environment and may not be appropriate for other purposes. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management.
However, such forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including risks associated with potential acquisitions not being completed or not being completed on the contemplated terms, public health crises such as the COVID-19 pandemic, real property ownership and development, debt and equity financing for development, interest and financing costs, construction and development risks, and the ability to obtain commercial and municipal consents for development. These risks and others are more fully discussed under the heading "Risks and Uncertainties" and elsewhere in SmartCentres' most recent Management's Discussion and Analysis, as well as under the heading "Risk Factors" in SmartCentres' most recent annual information form. Although the forward-looking statements contained in this Press Release are based on what management believes to be reasonable assumptions, SmartCentres cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. These forward-looking statements are made as at the date of this Press Release and SmartCentres assumes no obligation to update or revise them to reflect new events or circumstances unless otherwise required by applicable securities legislation.
Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a stable retail environment; a continuing trend toward land use intensification, including residential development in urban markets and continued growth along transportation nodes; access to equity and debt capital markets to fund, at acceptable costs, future capital requirements and to enable our refinancing of debts as they mature; that requisite consents for development will be obtained in the ordinary course, construction and permitting costs consistent with the past year and recent inflation trends.
For more information, please visit www.smartcentres.com or contact:
Mitchell Goldhar Executive Chairman and CEO SmartCentres (905) 326-6400 ext. 7674 [email protected] | Peter Sweeney Chief Financial Officer SmartCentres (905) 326-6400 ext. 7865 [email protected] |
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