Allied Properties REIT (TSX:AP.UN) today announced results for its
fourth quarter and fiscal year ended December 31, 2012. "We took
advantage of a very supportive environment in 2012 to make our
business better and stronger in every material respect," said
Michael Emory, President and CEO. "Our performance measures reached
new heights, and our balance sheet continued to grow and
strengthen."
The results for the fourth quarter are summarized below and
compared to the same quarter in 2011:
(In thousands except for per
unit and % amounts) Q4 2012 Q4 2011 CHANGE % CHANGE
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Net income 25,524 19,073 6,451 33.8%
Same-asset NOI 32,560 30,688 1,872 6.1%
Funds from operations ("FFO") 28,020 20,706 7,314 35.3%
FFO per unit (diluted) $ 0.45 $ 0.40 $ 0.05 12.5%
FFO pay-out ratio 73.2% 81.9% (8.7%)
Adjusted FFO ("AFFO") 23,430 16,594 6,836 41.2%
AFFO per unit (diluted) $ 0.38 $ 0.33 $ 0.05 15.2%
AFFO pay-out ratio 87.5% 102.1% (14.6%)
Total debt as a % of fair value
of investment properties 36.4% 44.8% (8.4%)
Net debt as a multiple of
annualized Q4 EBITDA 6.3:1 6.3:1 -
Interest as a multiple of EBITDA 4.2:1 3.2:1 1:1
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The results for the fiscal year ended December 31, 2012, are
summarized and compared to the same period in 2011:
(In thousands except for per unit
and % amounts) 2012 2011 CHANGE % CHANGE
----------------------------------------------------------------------------
Net income 93,325 59,949 33,376 55.7%
Same-asset NOI 106,078 92,422 13,656 14.8%
Funds from operations ("FFO") 102,152 66,091 36,061 54.6%
FFO per unit (diluted) $ 1.79 $ 1.39 $ 0.40 28.8%
FFO pay-out ratio 73.8% 95.2% (21.4%)
Adjusted FFO ("AFFO") 81,707 51,083 30,624 59.9%
AFFO per unit (diluted) $ 1.43 $ 1.07 $ 0.36 33.6%
AFFO pay-out ratio 92.3% 123.2% (30.9%)
Total debt as a % of fair value
of investment properties 36.4% 44.8% (8.4%)
Net debt as a multiple of
annualized Q4 EBITDA 6.3:1 6.3:1 -
Interest as a multiple of EBITDA 3.6:1 2.9:1 0.7:1
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Allied's financial performance measures for the fourth quarter
and fiscal year were up significantly from the comparable periods
in 2011, reflecting increased occupancy, portfolio-wide rental
growth and accretion from recent acquisitions.
Having leased over 1.7 million square feet of space in 2012,
Allied finished the year with its rental portfolio 92.2% leased,
94.2% leased if upgrade properties are excluded. Allied renewed or
replaced 81.3% of its leases maturing in 2012, resulting in an
overall increase of 8.3% in net rental income per square foot from
the affected space.
With over $400 million in acquisitions announced and completed
in 2012, Allied finished the year well ahead of its annual target.
As expected, the acquisitions were evenly spread over Allied's
three operating regions and included a significant number of
value-creation opportunities. Allied also sold three non-core
properties, one in Toronto and two in Winnipeg, as well as an
undivided 50% interest to joint-venture partners in three Toronto
properties.
Allied's value-creation activity accelerated in 2012, with the
acquisition of redevelopment projects in Calgary and Montreal and
the advancement of four urban intensification opportunities in
Toronto. Allied also established two new and promising avenues of
growth. One was the expansion of its telecom and IT facilities
through the long-term lease of space at 250 Front Street West in
Toronto. The other was the initiation of four urban intensification
joint ventures in Toronto.
Allied's balance sheet continued to grow and strengthen in 2012.
At year-end, the fair value of its assets was nearly $3 billion, up
41% from the beginning of the year through a combination of
acquisitions ($517 million) and value appreciation ($369 million),
offset somewhat by dispositions ($32 million). Its weighted-average
mortgage term was five years, its weighted-average interest rate
5.0%, its total debt as a percentage of fair value 36.4% and its
net debt as a multiple of its annualized Q4 EBITDA 6.3:1 This was
reflected in an interest-coverage ratio of 4.2:1 in the fourth
quarter.
"We expect our FFO and AFFO per unit to continue to grow, and we
expect the demand for space across our target markets to remain
strong," said Mr. Emory, summarizing Allied's outlook for 2013. "We
intend to continue the consolidation of ownership in our target
markets, but with a more exclusive focus than last year on the
acquisition of stabilized properties. We also intend to focus on
the execution of our value-creation opportunities as part of our
ongoing effort to build a value-creation pipeline that in time will
make a recurring, annual contribution to the growth of our
business."
FFO and AFFO are not financial measures defined by International
Financial Reporting Standards ("IFRS"). Please see Allied's
MD&A for a description of these measures and their
reconciliation to net income and comprehensive income under IFRS,
as presented in Allied's consolidated financial statements for the
quarter and fiscal year ended December 31, 2012. These statements,
together with accompanying notes and MD&A, have been filed with
SEDAR, www.sedar.com, and are also available on Allied's web-site,
www.alliedreit.com.
NOI is not a measure recognized under IFRS and does not have any
standardized meaning prescribed by IFRS. NOI is presented in this
press release because management of Allied believes that this
non-IFRS measure is an important financial performance indicator.
NOI, as computed by Allied, may differ from similar computations as
reported by other similar organizations and, accordingly, may not
be comparable to NOI reported by such organizations.
This press release may contain forward-looking statements with
respect to Allied, its operations, strategy, financial performance
and condition. These statements generally can be identified by use
of forward looking words such as "may", "will", "expect",
"estimate", "anticipate", intends", "believe" or "continue" or the
negative thereof or similar variations. Allied's actual results and
performance discussed herein could differ materially from those
expressed or implied by such statements. Such statements are
qualified in their entirety by the inherent risks and uncertainties
surrounding future expectations. Important factors that could cause
actual results to differ materially from expectations include,
among other things, general economic and market factors,
competition, changes in government regulations and the factors
described under "Risk Factors" in the Allied's Annual Information
Form which is available at www. sedar.com. The cautionary
statements qualify all forward-looking statements attributable to
Allied and persons acting on its behalf. Unless otherwise stated,
all forward-looking statements speak only as of the date of this
press release, and Allied has no obligation to update such
statements.
Allied Properties REIT is a leading owner, manager and developer
of urban office environments that enrich experience and enhance
profitability for business tenants operating in Canada's major
cities. Its objectives are to provide stable and growing cash
distributions to unitholders and to maximize unitholder value
through effective management and accretive portfolio growth.
Contacts: Allied Properties REIT Michael R. Emory President
& Chief Executive Officer 416.977.9002memory@alliedreit.com
www.alliedreit.com
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