TORONTO, ONTARIO--(Marketwired - Nov 7, 2017) -
This news release contains forward-looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained within this press release.
DREAM INDUSTRIAL REIT (TSX:DIR.UN) today announced its financial results for the three and nine months ended September 30, 2017.
HIGHLIGHTS
"Having completed our first U.S. asset acquisition, and with Brian Pauls joining us as CEO in the new year, we are making significant progress on our previously announced strategy of entering the United States industrial markets in a disciplined manner," said Vincenza Sera, Chair and Trustee of Dream Industrial REIT. "We expect our relationship with PAULS Corp LLC will help Dream Industrial REIT capitalize on unique and attractive industrial opportunities in the near term. In addition, we look forward to working with Brian to grow the Trusts' business in Canada, including identifying new development projects and increasing the scope of the asset recycling program to improve the overall quality of our portfolio."
SELECTED FINANCIAL INFORMATION | ||||||||||||||||
(unaudited) | Three Months Ended | Nine Months Ended | ||||||||||||||
($000's except unit and per unit amounts) | September 30, 2017 | June 30, 2017 |
September 30, 2016 | September 30, 2017 | September 30, 2016 | |||||||||||
Net income | 9,091 | (7,108 | ) | 14,283 | 15,193 | 6,912 | ||||||||||
Net operating income ("NOI")(1) | 29,037 | 28,936 | 29,426 | 86,479 | 88,611 | |||||||||||
Funds from operations ("FFO")(1) | 18,708 | 18,502 | 18,191 | 54,969 | 54,632 | |||||||||||
Adjusted funds from operations ("AFFO")(1) | 16,867 | 16,382 | 15,923 | 48,819 | 47,331 | |||||||||||
Investment properties value | 1,625,681 | 1,617,098 | 1,659,015 | 1,625,681 | 1,659,015 | |||||||||||
Debt | 883,941 | 861,777 | 878,862 | 883,941 | 878,862 | |||||||||||
Per unit data(1)(2) | ||||||||||||||||
FFO - diluted(1) | $ | 0.230 | $ | 0.230 | $ | 0.229 | $ | 0.681 | $ | 0.690 | ||||||
AFFO - diluted(1) | 0.208 | 0.205 | 0.203 | 0.610 | 0.604 | |||||||||||
Distributions | 0.175 | 0.175 | 0.175 | 0.525 | 0.525 | |||||||||||
FFO payout ratio (%)(1)(3) | 76.1 | % | 76.1 | % | 76.4 | % | 77.1 | % | 76.1 | % | ||||||
AFFO payout ratio (%)(1)(3) | 84.1 | % | 85.4 | % | 86.2 | % | 86.1 | % | 86.9 | % | ||||||
Units (period-end) | ||||||||||||||||
REIT Units | 61,542,636 | 60,904,202 | 59,275,687 | 61,542,636 | 59,275,687 | |||||||||||
LP Class B Units | 18,551,855 | 18,551,855 | 18,551,855 | 18,551,855 | 18,551,855 | |||||||||||
Total number of units | 80,094,491 | 79,456,057 | 77,827,542 | 80,094,491 | 77,827,542 | |||||||||||
Portfolio gross leasable area (square feet)(4) | 16,087,993 | 16,084,410 | 16,638,360 | 16,087,993 | 16,638,360 | |||||||||||
Occupied and committed space(4) | 96.7 | % | 96.8 | % | 94.5 | % | 96.7 | % | 94.5 | % | ||||||
Average occupancy for the period(4) | 95.3 | % | 95.0 | % | 93.3 | % | 94.9 | % | 93.5 | % | ||||||
See footnotes on page 4. |
FINANCIAL HIGHLIGHTS
OPERATIONAL HIGHLIGHTS
"Dream Industrial's operational performance over the past year has improved significantly," said Brent Chapman, President and Chief Executive Officer. "Our Western Canada portfolio occupancy has remained strong at 96.5%, and our occupancy in Eastern Canada has increased 580 bps since this time last year. We are capitalizing on the strong industrial fundamentals in our markets which positions the Trust well for continued stability and growth."
September 30, 2017(4) | GLA (million sq. ft.) |
Occupancy (%) | Average lease term (years) | Average in-place rent (per sq. ft.) |
Western Canada | 4.9 | 96.5 | 3.7 | $ 9.00 |
Ontario | 4.8 | 99.7 | 3.7 | 6.17 |
Québec | 3.8 | 95.4 | 4.6 | 6.14 |
Eastern Canada | 2.6 | 93.5 | 3.5 | 7.23 |
Total | 16.1 | 96.7 | 3.9 | $ 7.19 |
See footnotes on page 4. |
CAPITAL STRUCTURE
Key performance indicators | September 30, 2017 | December 31, 2016 | September 30, 2016 | |||
Level of debt (debt-to-total assets)(1) | 52.6 | % | 52.6 | % | 52.7 | % |
Interest coverage ratio(1) | 3.3 times | 3.1 times | 3.1 times | |||
Weighted average face interest rate on all debt(5) | 3.81 | % | 3.81 | % | 3.83 | % |
Weighted average effective interest rate on all debt(5) | 3.91 | % | 3.89 | % | 3.88 | % |
Debt - weighted average term to maturity (years) | 3.8 | 4.2 | 4.2 | |||
See footnotes on page 4. |
The Trust continues to improve its financial metrics and is strategically evaluating opportunities to take advantage of the current favourable interest rate environment, while maintaining a balanced debt maturity profile. As at September, 30, 2017, the Trust had $99 million of unencumbered assets and $98 million available to be drawn on the revolving credit facility, which provide additional sources of financial flexibility.
"We have been able to improve our payout ratio, reduce our leverage and deliver improved financial results relative to the same quarter in 2016, after selling $71 million of assets last year," said Lenis Quan, Chief Financial Officer of Dream Industrial REIT. "With two acquisitions completed this year, including our first asset in the U.S., we are executing on our growth strategies and believe that the Trust is well positioned with the financial flexibility to explore and continue to execute on them going forward."
CONFERENCE CALL
Senior management will host a conference call to discuss the results on Wednesday, November 8, 2017 at 2:00 p.m. (ET). To access the conference call, please dial 1-888-465-5079 in Canada and the United States or 416-216-4169 elsewhere and use passcode 6802 324#. To access the conference call via webcast, please go to Dream Industrial REIT's website at www.dreamindustrialreit.ca and click on the link for News & Events, then click on Calendar of Events. A taped replay of the conference call and the webcast will be available for ninety (90) days following the call.
Other information
Information appearing in this news release is a select summary of results. The condensed consolidated financial statements and management's discussion and analysis for the Trust will be available at www.dreamindustrialreit.ca and on www.sedar.com.
Dream Industrial REIT is an unincorporated, open-ended real estate investment trust. Dream Industrial REIT owns and operates a portfolio of 214 geographically diversified light industrial properties comprising approximately 17.0 million square feet of gross leasable area in key markets across Canada. Its objective is to build upon and grow its portfolio and to provide stable and sustainable cash distributions to its unitholders. For more information, please visit www.dreamindustrialreit.ca.
FOOTNOTES
(1) AFFO, FFO, comparative properties NOI, NOI, FFO and AFFO payout ratios, level of debt (debt-to-total assets) and interest coverage ratio are non-GAAP measures used by Management in evaluating operating performance and debt management. Please refer to the cautionary statements under the heading "Non-GAAP Measures" in this press release. |
(2) A description of the determination of diluted amounts per unit can be found in our Management's Discussion and Analysis for the three and nine months ended September 30, 2017 under the heading "Non-GAAP Measures and Other Disclosures". |
(3) Payout ratios for FFO and AFFO (non-GAAP measures) are calculated as the ratio of distribution rate to diluted FFO and AFFO per unit, respectively. |
(4) Excludes property or properties held for sale at each quarter. |
(5) Weighted average effective interest rate is calculated as the weighted average face rate of interest net of amortization of fair value adjustments and financing costs of all interest bearing debt. Weighted average face interest rate is calculated as the weighted average face interest rate of all interest bearing debt. |
Non-GAAP Measures
The Trust's condensed consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). In this press release, as a complement to results provided in accordance with IFRS, the Trust discloses and discusses certain non-GAAP financial measures, including net operating income ("NOI"), comparative properties NOI, funds from operations ("FFO"), adjusted funds from operations ("AFFO"), FFO payout ratio, AFFO payout ratio, level of debt (debt-to-total assets) and interest coverage ratio as well as other measures discussed elsewhere in this release. These non-GAAP measures are not defined by IFRS, do not have a standardized meaning and may not be comparable with similar measures presented by other income trusts. The Trust has presented such non-GAAP measures as Management believes they are relevant measures of the Trust's underlying operating performance and debt management. Non-GAAP measures should not be considered as alternatives to net income, cash generated from (utilized in) operating activities or comparable metrics determined in accordance with IFRS as indicators of the Trust's performance, liquidity, cash flow, and profitability. For a full description of these measures, please refer to the "Non-GAAP Measures and Other Disclosures" in Dream Industrial REIT's Management's Discussion and Analysis for the three and nine months ended September 30, 2017.
Forward looking information
This press release may contain forward-looking information within the meaning of applicable securities legislation, including statements regarding our objectives and strategies and plans to enter new markets. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream Industrial REIT's control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, general and local economic and business conditions; the financial condition of tenants; our ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest and currency rate fluctuations. Our objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable, interest rates remain stable, conditions within the real estate market remain consistent, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forward-looking information in this press release speaks as of the date of this press release. Dream Industrial REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise except as required by law. Additional information about these assumptions and risks and uncertainties is contained in Dream Industrial REIT's filings with securities regulators, including its latest annual information form and MD&A. These filings are also available at Dream Industrial REIT's website at www.dreamindustrialreit.ca.
Dream Industrial REIT
Brent Chapman
President and Chief Executive Officer
(416) 365-5265
[email protected]
Dream Industrial REIT
Lenis Quan
Chief Financial Officer
(416) 365-2353
[email protected]