Plaza Retail REIT announces solid 2nd quarter results

FREDERICTON, NB, Aug. 13, 2014 /CNW/ - Plaza Retail REIT (TSX: PLZ.UN) ("Plaza") today announced its results for the quarter ended June 30, 2014.

Plaza reported funds from operations ("FFO") of $7.0 million for the three months ended June 30, 2014, an increase of 44.8% over the same period in the prior year.  FFO per unit was $0.076 for the quarter ended June 30, 2014 ($0.076 per unit diluted) compared to $0.069 per unit for the quarter ended June 30, 2013 ($0.069 per unit diluted), an increase of 10.1% over the prior year.  FFO was positively impacted by an increase in same-asset net property operating income ("NOI"), incremental NOI from new developments/acquisitions and from the purchase of KEYreit.  Partly offsetting the increase in FFO was an increase in: administrative expenses; and finance costs (mainly due to the debt assumed on acquisition of KEYreit and higher overall leverage). 

For the six months ended June 30, 2014, Plaza reported FFO of $12.2 million, an increase of 38.3% over the same period in the prior year.  FFO per unit was $0.135 for the six months ended June 30, 2014 ($0.135 per unit diluted) compared to $0.132 per unit for the six months ended June 30, 2013 ($0.132 per unit diluted), an increase of 2.3%.  Excluding one-time expenses and one-time tax relating to the REIT conversion, FFO per unit would have been $0.142, a 4.4% increase over the prior year.  Excluding unusual NOI variances, FFO per unit would have been $0.145, a 6.6% increase over the prior year.

Michael Zakuta, President and CEO said, "We are pleased with our 2^nd quarter results.  We had a very strong increase in our dollar and per unit FFO results for the quarter which more than offset one-time costs that impacted our 1^st quarter results.  Plaza continues to execute on its strategy of building value for unitholders.  We're expecting continued positive cash flow contributions from new developments, our KEYreit acquisition, and our substantial refinancing program."

Overall Plaza recorded a loss of $4.3 million for the three months ended June 30, 2014 compared to a loss of $11.9 million, for the same period in the prior year.  For the six months ended June 30, 2014, Plaza recorded profit of $61.3 million compared to a loss of $3.4 million for the same period in the prior year.  Year-to-date profit was mainly impacted by: (i) the recording of a non-cash deferred income tax recovery of $59.7 million to reflect the flow-through tax status of Plaza as a REIT (whereby taxes are now only recorded for Plaza's taxable corporate subsidiaries); (ii) the increase in FFO; (iii) an increase in the net loss from non-cash fair value adjustments to investment properties mainly as a result of an increase in capitalization rates; and (iv) a non-cash fair value loss on convertible debentures.

Plaza's summary of FFO is presented below:

 

A copy of Plaza's quarterly report can be found on the Plaza's web site at www.plaza.ca or on SEDAR at www.sedar.com.

Plaza Retail REIT is a leading retail property owner and developer, particularly in Eastern Canada. Plaza has an entrepreneurial focus with strong "value-add" capabilities. Plaza's current portfolio includes interests in 330 properties totaling approximately 6.7 million square feet across Canada and additional lands held for development. Plaza's properties include a mix of strip plazas, stand-alone small box retail outlets and enclosed shopping centres, anchored by approximately 90% national tenants. Total assets have reached almost $1 billion. Plaza is fully internalized, therefore providing unitholders directly with the synergies that come with an internalized management structure. Plaza has proven its strong "value-add" capabilities to develop, redevelop and acquire retail real estate throughout Canada. Plaza has a strong track record of generating growth in distributions, having increased its distributions at least once every year in the last 11 years.

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SOURCE Plaza Retail REIT