Boardwalk REIT Announces Solid Third Quarter Financial Results: FFO
up 13.2%, FFO per unit up 11.9% from the same three-month period
last year, and confirms monthly per unit Distribution for November
and December of 2012 and January of 2013. In addition, Boardwalk
REIT refines its 2012 Financial Guidance and introduces 2013
Financial Guidance.
Boardwalk Real Estate Investment Trust ("BEI.UN" -
TSX)
CALGARY, Nov. 14, 2012 /CNW/ - Boardwalk Real Estate
Investment Trust ("Boardwalk", "Boardwalk REIT" or the "Trust")
today announced solid financial results for the three month period
ended September 30, 2012.
Funds From Operations ("FFO") for the third
quarter totalled $39.4 million, or
$0.75 per unit on a diluted basis,
compared to FFO of $34.8 million, or
$0.67 per unit for the same period
last year, an increase of 13.2% and 11.9%, respectively.
Funds from Operations for the nine month period
ended September 30, 2012, increased
14.7% to $111.9 million from
$97.6 million in the same period of
2011, and increased 14.4% to $2.14
per Unit from $1.87 per Unit for the
same nine month period in 2011.
Adjusted Funds From Operation ("AFFO") for the
third quarter increased 15.3% to $0.68 per unit, compared to $0.59 per unit in the same period last
year. For the nine month period ended September 30, 2012, AFFO per Unit increased 16.5%
to $1.91, from $1.64 in the same period last year.
The increase in reported FFO is mainly attributed to rental
revenue growth and higher occupancy coupled with lower overall
financing costs, as the Trust continues to benefit from the current
low interest rate environment in the renewal of its existing CMHC
Insured Mortgages.
FFO and AFFO are widely accepted supplemental measures of the
performance of a Canadian Real Estate entity; they are not,
however, measures defined by International Financial Reporting
Standards ("IFRS"). The reconciliation of FFO and other
financial performance measures can be found in the Management
Discussion and Analysis (MD&A) for the third quarter ended
September 30, 2012, under the section
titled "Performance Measures".
For further detail, please refer to page 15
of the MD&A.
Additional Information
A more detailed analysis is included in the
Management's Discussion and Analysis and Consolidated Financial
Statements, which have been filed on SEDAR and can be viewed at
www.sedar.com or on the Trust's website at
www.boardwalkreit.com. Additionally, more detail on
Boardwalk's operations will be found in its conference call
presentation and other supplemental materials, to be posted on its
web site today at
http://www.boardwalkreit.com/FinancialReports/. The webcast
for this presentation will also be made available on its website at
www.boardwalkreit.com.
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$ millions, except per unit amounts
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Highlights of
the Trust's Third Quarter and First Nine Months 2012 Financial
Results |
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Three
Months
Sep 2012 |
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Three
Months
Sep 2011 |
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%
Change |
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Nine
Months
Sep 2012 |
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Nine
Months
Sep 2011 |
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%
Change |
Total Rental Revenue |
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$ |
110.6 |
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$ |
106.0 |
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4.3% |
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$ |
327.9 |
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$ |
315.7 |
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3.9% |
Net Operating Income (NOI) |
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$ |
70.2 |
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$ |
67.5 |
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4.0% |
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$ |
207.0 |
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$ |
195.5 |
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5.9% |
Profit |
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$ |
294.0 |
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$ |
169.1 |
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73.9% |
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$ |
672.9 |
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$ |
1,088.2 |
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-38.2% |
Funds From Operations (FFO) |
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$ |
39.4 |
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$ |
34.8 |
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13.2% |
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$ |
111.9 |
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$ |
97.6 |
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14.7% |
Adjusted Funds From Operations (AFFO) |
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$ |
35.4 |
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$ |
30.8 |
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14.9% |
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$ |
100.0 |
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$ |
85.7 |
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16.7% |
FFO Per Unit |
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$ |
0.75 |
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$ |
0.67 |
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13.1% |
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$ |
2.14 |
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$ |
1.87 |
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14.6% |
AFFO Per Unit |
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$ |
0.68 |
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$ |
0.59 |
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15.3% |
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$ |
1.91 |
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$ |
1.64 |
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16.5% |
Regular Distributions Declared (Trust Units & LP B
Units) |
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$ |
24.8 |
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$ |
23.5 |
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5.7% |
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$ |
73.2 |
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$ |
70.5 |
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3.8% |
Regular Distributions Declared Per Unit (Trust Units & LP B
Units) |
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$ |
0.48 |
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$ |
0.45 |
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5.6% |
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$ |
1.40 |
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$ |
1.35 |
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3.7% |
(2011 - $1.80 Per Unit - 2012 - $1.92 per Unit
on an annualized basis) |
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Regular Payout as a % FFO |
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63.0% |
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67.5% |
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65.4% |
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72.2% |
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Regular Payout as a % AFFO |
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70.1% |
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76.2% |
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73.2% |
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82.2% |
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Interest Coverage Ratio (Rolling 4 quarters) |
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2.65 |
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2.51 |
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2.65 |
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2.51 |
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Operating Margin |
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63.5% |
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63.7% |
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63.1% |
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61.9% |
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The Fair Value under IFRS for the Trust's portfolio increased as
a result of higher market rents and lower Capitalization Rates in
most municipalities for multi-family assets (as compared to
the end of the 2011 fiscal year). Below is a summary of the
Trust's per unit Net Asset Value, with further discussion located
in the 2012 Third Quarter MD&A.
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Highlights of the Trust's Fair
Value of Investment Properties |
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9/30/2012(1) |
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6/30/2012(1) |
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12/31/2011(1) |
IFRS Net Asset Value (NAV) Per
Diluted Unit (Trust & LP B) |
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$ |
60.11 |
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$ |
54.73 |
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$ |
45.42 |
Cash Per Diluted Unit (Trust & LP B) |
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$ |
3.07 |
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$ |
2.60 |
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$ |
4.90 |
Total Per Diluted Unit (Trust & LP B) |
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$ |
63.18 |
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$ |
57.33 |
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$ |
50.32 |
(1)
Calculated using principal amounts of unsecured and secured debt
outstanding in each period totalling
$2.26 billion as of Sep 30, 2012, $2.31 billion as of Jun 30, 2012
and $2.42 billion as of Dec 31, 2011. |
Weighted Average Capitalization Rate: 5.47% as at
Sept 30, 2012 and includes
Development Assets.
For further detail, please refer to page
16 of the MD&A.
In the third quarter of 2012, overall occupancy for Boardwalk's
portfolio was 98.10%, an increase in occupancy level compared to
the same period last year and sequentially higher than the end of
2011. Average market rents have increased to $1,100, up from $1,044 in September of 2011.
Despite the continued increase in average monthly and occupied
rents the Trust was able to achieve in the first nine months of
2012, there remains a considerable mark-to-market opportunity for
the Trust. Continued focus on product quality and Customer
Service remain key to Boardwalk's operating strategy and further
sustainable improvement of financial performance.
Boardwalk's rental optimization strategy of continuous active
management of occupancy levels, market rents, and suite-specific
incentives (three key variables), has allowed the Trust to report
an increase in both average and occupied rents versus the last
quarter, and the same period a year ago, while also increasing the
Trust's occupancy levels. Average monthly rents increased to
$1,049 from $1,002 in September of 2011 and average occupied
rents for the period ended also increased to $1,067 versus $1,029 for the same period last year.
The Trust's self-imposed rent control and Rental Increase
Forgiveness program for financially challenged Residents, which
eliminates or reduces rental increases where appropriate, continues
to build goodwill. Historically, by providing sustainable
rental increases to our Residents, the Trust has experienced lower
turnover, reduced expenses and higher occupancy, all of which have
resulted in higher revenues; benefiting all of the Trust's
Stakeholders.
For further detail, please refer to page
16 of the MD&A.
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Portfolio Highlights for the
Third Quarter of 2012 |
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Sep-12 |
Dec-11 |
Sep-11 |
Average Occupancy (Period Average) |
98.10% |
97.47% |
97.52% |
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Average Monthly Rent (Period Ended) |
$1,049 |
$1,012 |
$1,002 |
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Average Market Rent (Period Ended) |
$1,100 |
$1,053 |
$1,044 |
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Average Occupied Rent (Period Ended) |
$1,067 |
$1,033 |
$1,029 |
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Loss-to-Lease (Period Ended) ($ millions) |
$13.7 |
$8.4 |
$6.5 |
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Loss-to-Lease Per Trust Unit (Period Ended) |
$0.26 |
$0.16 |
$0.12 |
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Cash(Period Ended) ($ millions) |
$160.6 |
$255.9 |
$222.1 |
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Same Property Results |
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% Change Year-
Over-Year - 3
Months Sep 2012 |
% Change Year-
Over-Year - 9
Months Sep 2012 |
Rental Revenue |
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4.4% |
3.9% |
Operating Costs |
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8.1% |
0.6% |
Net Operating Income (NOI) |
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2.5% |
5.8% |
For the three-month stabilized
property analysis shown above, operating expense for Q3 2011 was
adjusted for
the change in Q1 and Q2 2011 internal capitalization program
estimate, which was reported in Q3 of 2011. |
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Stabilized Revenue
Growth |
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# of
Units |
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Q3 2012 vs
Q2 2012 |
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Q2 2012 vs
Q1 2012 |
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Q1 2012 vs
Q4 2011 |
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Q4 2011 vs
Q3 2011 |
Calgary |
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5,310 |
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1.6% |
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1.3% |
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2.0% |
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1.3% |
Edmonton |
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12,497 |
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1.8% |
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1.9% |
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0.7% |
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1.1% |
Fort McMurray |
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352 |
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-0.3% |
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1.7% |
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1.5% |
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-1.5% |
Grande Prairie |
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645 |
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3.9% |
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1.1% |
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1.5% |
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3.2% |
Red Deer |
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939 |
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2.0% |
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3.4% |
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1.5% |
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1.4% |
British Columbia |
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633 |
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0.9% |
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-0.7% |
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0.5% |
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0.7% |
Ontario |
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4,265 |
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0.3% |
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0.5% |
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0.6% |
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1.3% |
Quebec |
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6,000 |
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0.3% |
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-0.2% |
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0.0% |
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0.6% |
Saskatchewan |
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4,636 |
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1.0% |
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1.4% |
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0.7% |
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0.6% |
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35,277 |
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1.3% |
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1.2% |
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0.8% |
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1.0% |
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On a sequential basis, stabilized revenues for the third quarter
of 2012 increased 1.3% when compared to the previous quarter,
mainly the result of higher market rents coupled with increased
occupancy. Alberta, our
largest market, led the sequential revenue growth this quarter with
most areas in the province posting positive three-month revenue
growth. The increase in occupancy, while also increasing
occupied rents, reflects positively on the Trust's vertically
integrated operating and revenue optimization strategies.
For further detail, please refer to page 22 of the
MD&A.
Economic Market Fundamentals
Market Fundamentals
Market Fundamentals |
BC |
Alberta |
Saskatchewan |
Ontario |
Quebec |
|
Sep-12 |
Sep-11 |
Sep-12 |
Sep-11 |
Sep-12 |
Sep-11 |
Sep-12 |
Sep-11 |
Sep-12 |
Sep-11 |
Unemployment Rate |
7.0% |
6.7% |
4.4% |
5.4% |
4.7% |
4.6% |
7.9% |
7.6% |
8.0% |
7.3% |
|
Q2 2012 |
Q2 2011 |
Q2 2012 |
Q2 2011 |
Q2 2012 |
Q2 2011 |
Q2 2012 |
Q2 2011 |
Q2 2012 |
Q2 2011 |
Net Interprovincial Migration |
-1,196 |
73 |
8,544 |
3954 |
1,373 |
581 |
-4,364 |
-1,944 |
-1,027 |
-2,169 |
Net International Migration |
11,493 |
9,361 |
14,546 |
8,676 |
4,035 |
2,643 |
33,936 |
31,615 |
21,373 |
19,135 |
Total Net Migration |
10,297 |
9,434 |
23,090 |
12,630 |
5,408 |
3,224 |
29,572 |
29,671 |
20,346 |
16,966 |
|
Aug 2011
to Aug 2012 |
Aug 2010
to Aug 2011 |
Aug 2011
to Aug 2012 |
Aug 2010
to Aug 2011 |
Aug 2011
to Aug 2012 |
Aug 2010
to Aug 2011 |
Aug 2011
to Aug 2012 |
Aug 2010
to Aug 2011 |
Aug 2011
to Aug 2012 |
Aug 2010
to Aug 2011 |
Average Weekly Wages
Growth |
3.2% |
2.7% |
3.2% |
4.9% |
6.1% |
3.5% |
3.0% |
2.8% |
4.5% |
2.4% |
Source: Statistics Canada
Western Canada
CMHC expects Alberta's economy
to continue to expand over the forecasted period with real GDP
growth of 3.4% in 2012 and 3.2% in 2013. In Saskatchewan, CMHC expects real GDP to rise by
3.1% in 2012 and by 3% in 2013. Both provinces are expected
to have GDP growth above the national average. Although
expected to be at a slower pace than previous years, the investment
in the energy sector and energy exports in both Alberta and Saskatchewan will remain an important driver
of the economic growth in 2012 and 2013, says CMHC. In British Columbia, CMHC reports total
employment rose during the second quarter of 2012 and the shift to
full-time employment continued a trend that is expected to remain
steady throughout the rest of the year.
Due to the expanding economy in Alberta, more workers will be required, and,
as a result, employment is expected to increase by almost 3% in
2012; additionally, Alberta is
expected to experience a lower unemployment rate throughout 2013,
projected to average below 5%. The expanding economy in
Alberta, coupled with the need for
more workers, will draw more temporary foreign workers. CMHC
predicts total net migration to Alberta will reach 57,800 in 2012 and 48,500
in 2013.
CMHC expects Saskatchewan's
economic opportunities, coupled with a low unemployment rate, will
continue to attract migrants to the province. According to
CMHC, the unemployment rate will average 4.8% in 2012 and 4.7% in
2013 in Saskatchewan.
Saskatchewan's net migration is
projected to reach 12,000 in 2012, easing slightly in
2013, while remaining elevated at 11,000, with international
migrants being responsible for the majority of migration gains.
Eastern Canada
According to CMHC, Ontario's
economy will finish 2012 and enter into 2013 with less momentum
than previously forecasted. CMHC anticipates the resurfacing
of concerns surrounding the global economy has likely translated
into cautionary spending among North American businesses, and, as a
result, Ontario businesses have
reduced their investment. CMHC advises Ontario may experience below average
employment growth and suggests this will be a contributing factor
to the slower than expected economic growth, particularly as
consumers will be more cautious with spending. With the current
climate of uncertainty regarding economic prospects abroad, CMHC
expects Quebec will experience
less vigorous household spending and private investment in
2012.
With improving job prospects in the west, CMHC predicts more
Ontario residents will move
westward; they also expect international migration to provide some
underlying support to population growth in Ontario. CMHC predicts Quebec will have sustained net migration over
the coming years, remaining stable with no significant change in
immigration targets expected.
MLS Housing Prices
British Columbia |
Vancouver CMA |
Victoria CMA |
|
Sep-12 |
Sep-11 |
Sep-12 |
Sep-11 |
Average Single Family |
NA |
NA |
$595,452 |
$608,668 |
Average Condo |
NA |
NA |
$320,304 |
$332,490 |
Average Overall |
$606,100 |
$627,994 |
NA |
NA |
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Alberta |
Calgary CMA |
Edmonton CMA |
|
Sep-12 |
Sep-11 |
Sep-12 |
Sep-11 |
Average Single Family |
$468,793 |
$466,192 |
$376,678 |
$375,738 |
Average Condo |
$329,797 |
$329,089 |
$229,246 |
$236,125 |
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Saskatchewan |
Saskatoon CMA |
Regina CMA |
|
Sep-12 |
Sep-11 |
Sep-12 |
Sep-11 |
Average Overall |
$321,564 |
$311,057 |
$298,501 |
$282,313 |
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Ontario |
London CMA |
Windsor CMA |
|
Sep-12 |
Sep-11 |
Sep-12 |
Sep-11 |
Average Overall |
$231,599 |
$180,929 |
$181,976 |
$177,096 |
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Quebec |
Montreal CMA |
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Sep-12 |
Sep-11 |
|
Average Overall* |
$327,336 |
$313,203 |
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Internally generated, NA = Data not
available, * Internally calculated based on volume of
sales and total sales as provided by the Greater Montreal Real
Estate Board. Source:
Association of Regina REALTORS®, Calgary Real Estate Board, Canada
Mortgage and
Housing Corporation, Canadian Real Estate Association, Edmonton
Real Estate Board,
Greater Montreal Real Estate Board, London and St. Thomas
Association of REALTORS®,
Real Estate Board of Greater Vancouver, Saskatoon Region
Association of REALTORS®,
Victoria Real Estate Board, Windsor-Essex County Real Estate
Board |
Western Canada
The trend of well supplied resale markets that British Columbia saw in the first half of 2012
will continue into the second half, with CMHC predicting
single-detached housing starts of 8,900 units in 2012 and 9,900
units in 2013. In 2013, CMHC cites that fewer listings,
higher existing home sales, and firmer resale prices, are going to
shift demand towards new homes in British
Columbia. The number of multi-family housing starts
originally forecasted is being revised to higher levels in 2012 as
a result of an increase in larger projects in British Columbia. CMHC is predicting 19,600
units in 2012 and 20,200 units in 2013.
In response to heightened demand in Alberta, single-detached construction has
increased in 2012, and, as such, CMHC predicts 17,600 units in 2012
and 18,400 units in 2013. Construction activity of
multi-family housing in Alberta
has also increased to 14,200 units in 2012; this will moderate
slightly in 2013 to 13,800 units, according to CMHC.
As a result of economic and demographic factors, Saskatchewan is in a period of heightened
housing demand and the number of single-detached units under
construction has risen, providing more supply. CMHC suggests
higher inventory levels will contribute to lower housing starts in
2013 and further predicts single-detached starts will rise to 4,900
in 2013, before tapering off slightly to 4,700 in 2013.
Similarly, CMHC cites the low multi-family inventory in
Saskatchewan has caused increases
in condominium construction in 2012, resulting in an increase in
starts for a third consecutive year at 3,600 units in 2012. With
higher inventory in 2013, multi-family starts are expected to ease
slightly to 3,500 units in Saskatchewan.
With strengthening employment and population growth, CMHC
advises that re-sales in British
Columbia will gradually improve and the provincial resale
market will remain in balance for the remainder of 2012, and into
2013. The average annual prices in British Columbia are expected to be
$522,200 for 2012 and $535,700 in 2013, according to CMHC. CMHC
also expects re-sales in Alberta
to increase in both 2012 and 2013 to 59,800 units and 61,000 units,
respectively. CMHC predicts Alberta will see a transition to balanced
market conditions, which will cause prices to increase over the
forecast period. Average resale prices in Alberta are projected to be at $362,200 in 2012 and $372,300 in 2013. CMHC reports that employment
and income growth, high levels of migration, and the Province of
Saskatchewan's $10,000 First-Time Homebuyer's Tax Credit, will
support resale transactions in the province, resulting in 14,000
units in 2012 and 13,700 units in 2013. While housing prices
in Saskatchewan are expected to
continue to trend higher in 2013, according to CMHC, price growth
is expected to moderate. The average price in Saskatchewan is forecasted at $269,000 in 2012 and $275,500 in 2013.
Eastern Canada
In Ontario, CMHC reports
single-detached starts have stabilized in recent months and will
reach 25,900 units in both 2012 and 2013. Low inventories,
tight re-sale market conditions, and stronger income growth, are
expected to support single-detached starts in the future. In
2012, multi-family home construction in Ontario has had a larger share of new home
activity, and CMHC expects this to continue for the rest of 2012,
with starts reaching 49,200. These starts will moderate in
2013 to 37,400 as the demand slows in Ontario.
In 2011, Quebec experienced
slower job growth as well as easing of the resale market, along
with a trend towards multi-family dwellings, and, as a result,
single-detached starts have decreased. CMHC predicts a less
pronounced decline over the next two years with 15,700 starts in
2012 and 15,000 in 2013. With sustained construction of
multi-family homes in 2011 in Quebec, CMHC expects this to taper off to more
sustainable rates of 29,700 in 2012 and 27,100 in 2013.
CMHC estimates re-sales peaked earlier in 2012 and are expected
to moderate throughout the rest of the year, and into 2013 in
Ontario. These re-sales are
forecasted to reach 199,500 units in 2012 and then slow to 195,300
units in 2013. According to CMHC, modest job growth and
changes in mortgage insurance rules will slow sales in Ontario; however, they will still remain near
historically high levels as a result of the low interest
rates. As a result of the moderating sales and a high level
of home listings, CMHC reports Ontario's resale markets will move back into
balance, with the average price in Ontario forecasted at $386,900 in 2012 and $389,200 in 2013. After a slight moderation
of re-sales in Quebec in 2011,
CMHC predicts re-sales will recover this year to 81,300 units and
further to 82,100 units in 2013. With relatively stable
demand for resale homes in Quebec
and rising supply, some of the pressure on prices has been
removed. CMHC expects price growth will moderate throughout
2012 and into 2013 in Quebec,
resulting in average prices of $271,600 in 2012 and $277,800 in 2013.
Acquisitions, Dispositions, and Development
There were no Investment Property acquisitions or dispositions
in the third quarter of 2012. Subsequent to the end of the
Trust's Third Quarter, legislation was tabled in the House of
Commons to implement outstanding tax amendments, including those
relating to REITs. The Trust is pleased with the legislation,
which essentially mirrors tax amendments previously announced and
provides further clarity on the nature of income generated from
property sales. This will allow the Trust to continue its
strategy of potentially selling certain non-core assets without
being offside with the REIT exemption criteria under the specified
investment flow-through rules.
The demand for Multi-Family Investment Properties in
Canada continues to be
strong. As a result, continued further capitalization rate
compression and increases in values for Multi-Family assets
continue to be the trend. The Trust continues to actively bid
on higher quality assets; however, no new apartment acquisitions
have been completed to date as the actual transaction prices on
these assets would not prove to be in the best interest of the
Trust on a risk-adjusted basis.
The Trust has received development approval and commenced
construction of a 109-unit, wood frame, four storey, elevatored
asset on existing excess land the Trust owns in Calgary, Alberta. It is estimated the
cost of this development will be approximately $19 million. The Trust applied for a grant
from the Province of Alberta's
'Housing Capital Initiatives' and will receive $7.5 million to assist in the development of this
property. In return, the Trust has agreed to provide 54 of
the 109 units at rental rates 10% below average Calgary market rents for 20 years. The
remainder of the development costs will be funded by existing
liquidity the Trust has on hand. The Trust estimates the
stabilized capitalization rate of this project will be
approximately 6.10%, while also allowing the Trust to surface
approximately $39,000 per apartment
unit of land value.
The Trust continues to explore other viable development
opportunities for multi-family apartment buildings on excess land
the Trust currently owns in Alberta and Saskatchewan. The increased demand for
multi-family investment properties, which has resulted in continued
capitalization rate compression, continues to present a unique
opportunity for the Trust to explore the viability of multi-family
rental property development in order to improve the Trust's
portfolio and enhance value for Unitholders.
For further detail, please refer to page 32 of the
MD&A.
Investing in our Properties
Continued internalization of more maintenance and value-added
projects has further enhanced curb appeal and the quality of our
property portfolio. The Trust believes the quality of
Boardwalk's Communities continues to drive long-term revenue growth
and stability. The Trust continues to invest in its
properties and expects to invest approximately $97.5 million during the 2012 fiscal year to
further enhance the curb appeal and quality of the Trust's
assets. For the first nine-months of 2012, Boardwalk invested
approximately $61.8 million in the
form of project enhancements and equipment purchases, including
upgrades to existing suites, common areas, mechanical systems, and
building exteriors, compared to $48.4
million for the same period in 2011.
Boardwalk's vertically integrated structure allows many repair
and maintenance functions, including landscaping, to be
internalized. A continued focus on completing more of these
functions in-house has resulted in improved quality, productivity,
effectiveness of resources, and overall execution of the Trust's
capital improvement program, leading to sustainable value for our
Customers and long-term growth for Unitholders.
For further detail, please refer to page 29 of the
MD&A.
Liquidity and Continued Financial Strength
In January of 2012, the Trust's $112.4
million Unsecured Debentures were retired with existing
liquidity; however, the Trust continues to maintain a solid
financial position with $161 million
of cash and an undrawn $196 million
credit facility.
As of September 30, 2012, the
Trust had approximately $389 million
of available liquidity with debt (net of cash) to reported asset
fair value of 40%. The Trust's interest coverage ratio,
excluding gain or loss on sale of assets, for the most recent
completed four quarters ended September 30,
2012, was 2.65 times compared to 2.51 times for the same
period last year.
The Trust continues to review all available options in deploying
capital that will provide the greatest return to the Trust's
Unitholders. Cumulatively, since 2007, the Trust has
purchased and cancelled 4,542,747 Trust Units, representing a total
purchase cost of $170.5 million, or
an average cost of $37.53 per Trust
Unit through the facilities of the Toronto Stock Exchange.
In $000's |
|
|
|
|
|
|
|
Cash Position - Sep 30, 2012 |
|
|
|
$ |
|
|
160,601 |
|
|
|
|
|
|
|
|
Subsequent Committed Financing |
|
|
|
$ |
|
|
32,010 |
|
|
|
|
|
|
|
|
Line of Credit* |
|
|
|
$ |
|
|
196,276 |
|
|
|
|
|
|
|
|
Total Available Liquidity |
|
|
|
$ |
|
|
388,887 |
|
|
|
|
|
|
|
|
Liquidity as a % of Total Debt |
|
|
|
|
|
|
17% |
|
|
|
|
|
|
|
|
Debt (net of cash) as a % of reported asset
value |
|
|
|
|
|
|
40% |
|
|
|
|
|
|
|
|
For further detail, please refer to pages 33 of the
MD&A.
Mortgage Financing
Interest rates continue to hover near historic lows and have
benefitted the Trust's mortgage program as the Trust has continued
to renew existing CMHC Insured mortgages at interest rates well
below the maturing rates. As of September 30, 2012, the Trust's total mortgage
principal outstanding totaled $2.34
billion at a weighted average interest rate of 3.84%,
compared to $2.38 billion (inclusive
of the unsecured debentures) at a weighted average interest rate of
4.18% reported for September 30,
2011.
Approximately 99% of the Trust's mortgages are CMHC Insured,
providing the benefit of lower interest rates and limiting the
renewal risk of these mortgage loans for the entire amortization
period (which can be up to 40 years). The Trust's total debt
had an average term to maturity of over 3 years, where the debt
(net of cash) to reported asset value ratio was approximately 40%
as of September 30, 2012.
For the remainder of 2012, the Trust has
approximately $237.3 million
remaining in maturing mortgage principal at a weighted average
interest rate of 4.79%. To date, the Trust has forward locked
the interest rate on $234.2 million
of the remaining mortgage principal at an average interest rate of
3.32% while extending the term of these loans for an average of 9
years. The Trust has also repaid a $3.1 million mortgage, concluding the Trust's
2012 mortgage program.
The Trust is beginning to carry out a similar
strategy in 2012 for the Trust's 2013 mortgage maturities. The
strategy supports a continued balanced approach to its mortgage
program with current 5- and 10-year CMHC Mortgages estimated to be
2.30% and 2.90%, and anticipates continued accretive mortgage
renewals in 2013.
For further detail, please refer to page 34
of the MD&A.
2012 Financial Guidance
As is customary, the Trust reviews its financial guidance on a
quarterly basis, and has revised 2012 Financial Guidance as
follows:
Description
|
2012
Original Guidance |
2012 - Q1
Revised Guidance |
2012 - Q2
Revised Guidance |
2012 - Q3
Revised Guidance |
Acquisitions |
No new apartment
acquisitions or dispositions |
No new apartment
acquisitions or dispositions |
No new apartment
acquisitions or dispositions |
No new apartment
acquisitions or dispositions |
Stabilized
Building NOI
Growth |
1% to 4% |
2% to 4% |
3% to 5% |
3% to 5% |
FFO Per Trust Unit |
$2.65 to $2.85 |
$2.70 to $2.85 |
$2.75 to $2.90 |
$2.80 to $2.90 |
AFFO per
Trust Unit - based
on $450/yr/apt |
$2.35 to $2.55 |
$2.40 to $2.55 |
$2.45 to $2.60 |
$2.50 to $2.60 |
Based on the Trust's review, the reported stabilized portfolio
results for the first nine months of 2012 continue to be ahead of
original internal expectations, mainly a result of higher revenue
growth and lower than anticipated rental utility charges. As
such, Boardwalk has re-iterated its expectations on the annual
Stabilized Building NOI growth range of 3% to 5%. In
addition, the Trust has increased the bottom end of Boardwalk's
overall FFO and AFFO estimate range from the Trust's Q2 Revised
Guidance. The Trust expects FFO to be in a range of
$2.80 to $2.90 per Trust Unit.
The Trust's AFFO range has been revised to $2.50 to $2.60 per Trust Unit.
Management will continue to update Financial Guidance on a
quarterly basis. The reader is cautioned this information is
forward-looking and actual results may vary materially from those
reported.
For further detail, please refer to page 37 of the
MD&A.
2012 Distribution
Boardwalk's Board of Trustees has approved the
next three month's distribution of $0.16 per Trust Unit per Month, or $1.92 per Trust Unit on an annualized
basis. Since the beginning of 2012, the Trust has increased
distributions by 6.7%.
Boardwalk's Board of Trustee's has approved the
next three month of distributions of $0.16 per Trust Unit per Month ($1.92 on an annualized basis) according to the
following schedule:
Month |
Record Date |
Distribution
Date |
Nov-12 |
30-Nov-12 |
17-Dec-12 |
Dec-12 |
31-Dec-12 |
15-Jan-13 |
Jan-13 |
31-Jan-13 |
15-Feb-13 |
The Board of Trustees will continue to review
the distributions made on the Trust Units on a quarterly basis.
2013 Financial Guidance
As customary with the reporting of Boardwalk's Third Quarter
Results, the Trust is introducing its 2013 Financial
Guidance. With the continued success of Boardwalk's Customer
Friendly Operating Strategy and anticipated further reduction in
the Trust's in-place mortgage interest rates, Boardwalk is
introducing its 2013 Financial Guidance as follows:
Description
|
2013
Guidance |
Acquisitions |
No new apartment
acquisitions
or dispositions |
Stabilized Building NOI
Growth |
1% to 4% |
FFO Per Trust Unit |
$2.95 to $3.15 |
AFFO per Trust Unit - based
on $475/yr/apt |
$2.63 to $2.83 |
The Trust's Board of Trustees has also approved the 2013 Capital
Budget as follows:
Capital Budget - in thousands $
except per Unit amounts |
|
|
|
2013 Budget |
|
|
|
|
|
|
|
Per Unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance Capital - $475/Apartment
Unit/Year |
|
|
$ |
16,800 |
|
|
|
$ |
|
|
|
475 |
Stablizing & Value Added Capital |
|
|
$ |
74,900 |
|
|
|
$ |
|
|
|
2,124 |
Total Operational Capital
|
|
|
$ |
91,700 |
|
|
|
$ |
|
|
|
2,599 |
Development |
|
|
$ |
21,000 |
|
|
|
|
|
|
|
|
Total Capital Investment |
|
|
$ |
112,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Trust has increased its Maintenance Capital estimate for
2013 to $475 per apartment unit per
year from $450 as a result of
increased pricing pressure.
For further detail, please refer to page 38 of the
MD&A.
Supplementary Information
Boardwalk produces the Quarterly Supplemental Information which
provides detailed information regarding the Trust's activities
during the quarter. The Third Quarter 2012 Supplemental
Information is available on our investor website at
http://www.boardwalkreit.com/FinancialReports
Teleconference on Third Quarter 2012
Financial Results
Boardwalk invites you to participate in the
teleconference to discuss these results tomorrow morning
(November 15, 2012) at 11:00 am EST. Senior management will speak to the
third quarter financial results and provide an update. Presentation
materials will be made available on Boardwalk's investor website at
www.boardwalkreit.com prior to the call.
Participation & Registration: Please RSVP to
Investor Relations at 403-206-6739 or by email to
investor@bwalk.com.
Teleconference: The telephone numbers for
the conference are toll-free 1-888-231-8191 (within North America) or 647-427-7450
(International.)
Note: Please provide the operator with the below
Conference Call ID or Topic when dialling in to the call.
Conference ID: 35332389
Topic: Boardwalk REIT Third Quarter Results
Webcast: Investors will be able to listen to the call and
view Boardwalk's slide presentation over the Internet by visiting
http://www.boardwalkreit.com prior to the start of the call.
An information page will be provided for any software needed and
system requirements. The webcast and slide presentation will
also be available at
www.newswire.ca/en/webcast/detail/1042013/1132037
Replay: An audio recording of the teleconference
will be available on the Trust's website: www.boardwalkreit.com
Corporate Profile
Boardwalk REIT is Canada's
friendliest landlord and currently owns and operates more than 225
properties with 35,277 residential units (as at Sept 30, 2012), totalling approximately 30
million net rentable square feet. Boardwalk's principal
objectives are to provide its Residents with the best quality
communities and superior customer service, while providing
Unitholders with sustainable monthly cash distributions, and
increase the value of its Trust Units through selective
acquisition, disposition, and effective management of its
residential multi-family properties. Boardwalk REIT is
vertically integrated and is Canada's leading owner/operator of
Multi-Family Communities with 1,600 associates bringing Customers
home to properties located in Alberta, Saskatchewan, Ontario, Quebec, and British
Columbia.
CAUTIONARY STATEMENTS REGARDING
FORWARD-LOOKING STATEMENTS
Information in this news release that is not
current or historical factual information may constitute
forward-looking information within the meaning of securities
laws. Implicit in this information, particularly in respect
of Boardwalk's objectives for 2012 and future periods, Boardwalk's
strategies to achieve those objectives, as well as statements with
respect to management's beliefs, plans, estimates and intentions,
and similar statements concerning anticipated future events,
results, circumstances, performance or expectations are estimates
and assumptions subject to risks and uncertainties, including those
described in the Management's Discussion & Analysis of
Boardwalk REIT's 2011 Annual Report under the heading "Risks and
Risk Management", which could cause Boardwalk's actual results to
differ materially from the forward-looking information contained in
this news release. Specifically, Boardwalk has assumed that
the general economy remains stable, interest rates are relatively
stable, acquisition capitalization rates are stable, competition
for acquisition of residential apartments remains intense, and
equity and debt markets continue to provide access to
capital. These assumptions, although considered reasonable by
the Trust at the time of preparation, may prove to be
incorrect. For more exhaustive information on these risks and
uncertainties, you should refer to Boardwalk's most recently filed
annual information form, which is available at www.sedar.com.
Forward-looking information contained in this news release is based
on Boardwalk's current estimates, expectations and projections,
which Boardwalk believes are reasonable as of the current
date. You should not place undue importance on
forward-looking information and you should not rely upon this
information as of any other date. While the Trust may elect
to, Boardwalk is under no obligation and does not undertake to
update this information at any particular time.
SOURCE Boardwalk Real Estate Investment Trust