SUMMARY HIGHLIGHTS FOR THE THREE-MONTH PERIOD ENDED
MARCH 31, 2019
- SOLID OPERATING PERFORMANCE
-
- FFO of $0.56 per trust unit; an
increase of 16.7% and fourth consecutive quarter of FFO growth
- 3.6% same-property revenue growth
- 5.3% same-property net operating income growth
- 96.6% occupancy in the first 3 months of 2019
- Fifth consecutive quarterly sequential revenue growth
- BALANCING SHORT-TERM RESULTS WITH LONG-TERM
STRATEGY
-
- Primary focus remains on the execution of organic growth
opportunity
- Announces sale of St. James Place, 140-unit non-core asset in
Saskatoon for $20.7 million or $148,000 per door, a premium to IFRS fair
value
- Proceeds recycled towards high-grading, and announces
acquisition Insignia Tower, a 124-unit newly constructed premium
asset in Edmonton for $35.8 million or $289,000 per door.
- The sale of non-core assets at a premium to the Trust's IFRS
value and recycling towards higher quality assets with superior
returns provide excellent sources of equity capital for the Trust
to high-grade its portfolio
- STRONG FINANCIAL POSITION
-
- Approximately $263 million of
liquidity
- Forward locked and/or renewed the interest rate on $384.5 million or 72% of 2019 mortgage
maturities
- Net Asset Value of $62.26 per
trust unit, equating to approximately $179,000 per door
- RE-ITERATES 2019 FINANCIAL GUIDANCE
-
- Same-property NOI growth range of 4% to 9%
- FFO range of $2.35 to
$2.50 per Trust Unit
- DISTRIBUTION OF $1.00 PER
TRUST UNIT ON AN ANNUALIZED BASIS CONFIRMED FOR THE MONTHS OF MAY,
JUNE AND JULY 2019
CALGARY, May 15, 2019 /PRNewswire/ - Boardwalk Real
Estate Investment Trust ("BEI.UN" - TSX)
Boardwalk Real Estate Investment Trust ("Boardwalk", the "REIT"
or the "Trust") today announced its financial results for the first
quarter of 2019.
"We are pleased to report on a solid first quarter of 2019 for
the Trust. The 16.7% growth in Funds from Operations per
Trust Unit reflected in our financial results are the product of
our team's commitment to the best product quality, service and
experience, which has resulted in higher occupancy and decreasing
incentives and provided a 4.5% increase in total revenue for the
quarter. This approach has resulted in a positive trend and
for five consecutive quarters we have delivered a sequential and
compounding improvement in our revenue." said Sam Kolias; Chairman and Chief Executive Officer
of Boardwalk REIT.
Rob Geremia; President of
Boardwalk REIT added: "The rental market in Alberta continues to trend toward a level of
balance with vacancy in our core Alberta markets continuing to improve.
Incentives are decreasing on lease renewals, and fewer incentives
are required to lease and fill our vacant units. As we
prepare for the seasonally stronger spring and summer turnover
season, we are already seeing an increased demand in our
Grande Prairie and Calgary markets for back-to-back turnovers,
which is a reflection of an improving rental market.
Our team's primary focus continues to be on the execution of our
organic revenue growth strategy where we remain in the early stages
of recovery. By focusing on maintaining high occupancy,
reducing incentives, managing controllable operating expenses, and
enhancing the value of our portfolio, the Trust is able to optimize
and drive higher Net Operating Income and Funds from
Operations. With the Trust's minimum distribution/maximum
re-investment policy, this additional free cashflow may then be
re-invested in the Trust's long-term growth strategy of improving
our existing communities, while growing and diversifying our
portfolio into other high-growth rental markets."
Mr. Kolias concluded: "To continue to high-grade our portfolio,
the Trust on April 1st,
2019, acquired Insignia Tower, a newly constructed, 124-unit,
concrete high-rise building in Edmonton for $35.8
million, before transaction costs, equating to $289,000 per door. Insignia Tower is well-located
in southwest Edmonton in an
established and desirable community in close proximity to retail
stores, restaurants, parks, schools and among other amenities, an
extensive network of walking paths. All units in the building
are large 2 bedroom, 2 bathroom suites featuring luxury
specifications such as floor to ceiling glazing, premium flooring,
stainless steel appliances, and granite countertops. Lease-up
of the building began in April of 2019 and to date have leased 19%
of the building at rental rates and absorption exceeding
expectations. The Trust estimates the stabilized
capitalization rate of the asset to range from 4.50% to 5.00%.
Also, subsequent to the first quarter of 2019, the Trust agreed
to the sale of St. James Place; a 140-unit, wood-frame low-rise
asset located in Saskatoon for
total proceeds of $20.7 million,
before transaction costs, or $148,000
per door, a premium to the Trust's IFRS value. Boardwalk is
proud to announce that the sale of this asset is to Avenue Living
Asset Management, one of Canada's
fastest growing, private apartment owner and operator in Western
Canada. This sales transaction is expected to close on
May 28, 2019.
The sale of non-core assets at a premium to the Trust's IFRS
value and recycling towards higher quality assets with superior
returns provide excellent sources of equity capital for the Trust
to high-grade its portfolio"
EXCEPTIONAL VALUE
The Trust believes that its current trading price represents
exceptional value.
Recent sales transactions of institutional sized apartment
buildings in Calgary and
Edmonton have averaged more than
$200,000 per door.
Boardwalk's fair value of its assets are estimated to be
approximately $179,000 per door.
Boardwalk's aforementioned sale of a non-core asset in
Saskatoon is valued at
$148,000 per door.
At a unit price of $39/Trust Unit,
Boardwalk's implied value is approximately $144,000 per door.
Boardwalk's FFO per unit growth this quarter of 16.7% marks the
fourth consecutive quarter of FFO growth, and continues to
represent the early stages of a growth cycle for the Trust on a
foundation of record affordability in rents.
The Trust remains disciplined on its near-term objectives with
our focus remaining on our operational performance, which will
continue to drive FFO growth and, in turn, will lead to
distribution, portfolio, and unit price growth.
FIRST QUARTER HIGHLIGHTS
|
$ millions, except
per unit amounts
|
Highlights of the
Trust's First Quarter 2019 Financial Results
|
|
3 Months Mar
31,
2019
|
3 Months Mar
31,
2018
|
%
Change
|
Operational
Highlights
|
|
|
|
Total Rental
Revenue
|
$
|
111.9
|
$
|
107.1
|
4.5%
|
Same Property Total
Rental Revenue
|
$
|
110.3
|
$
|
106.5
|
3.6%
|
Net Operating Income
(NOI), as reported
|
$
|
59.9
|
$
|
52.8
|
13.6%
|
Comparative
NOI*
|
$
|
58.4
|
$
|
54.5
|
7.1%
|
Same Property
NOI**
|
$
|
58.9
|
$
|
55.9
|
5.3%
|
Operating Margin, as
reported
|
53.6%
|
49.3%
|
|
Comparative Operating
Margin*
|
52.2%
|
50.9%
|
|
Same Property
Operating Margin**
|
53.4%
|
52.5%
|
|
|
|
|
|
Financial
Highlights
|
|
|
|
Funds From Operations
(FFO)
|
$
|
28.2
|
$
|
24.3
|
16.2%
|
Adjusted Funds From
Operations (AFFO)
|
$
|
22.3
|
$
|
18.5
|
20.1%
|
(Loss) Profit for the
Period
|
$
|
(7.7)
|
$
|
69.3
|
-111.2%
|
FFO per
Unit
|
$
|
0.56
|
$
|
0.48
|
16.7%
|
AFFO per
Unit
|
$
|
0.44
|
$
|
0.36
|
22.2%
|
|
|
|
|
Net Asset
Value
|
|
|
|
IFRS Asset Value per
Diluted Unit (Trust & LP B), period end
|
$
|
119.52
|
$
|
113.62
|
|
Debt Outstanding per
Diluted Unit, period end
|
$
|
(57.76)
|
$
|
(54.13)
|
|
Net Asset Value (NAV)
per Diluted Trust Unit (Trust & LP B), period end
|
$
|
61.76
|
$
|
59.49
|
|
Cash per Diluted Unit
(Trust & LP B), period end
|
$
|
0.50
|
$
|
1.76
|
|
Total per Diluted
Unit (Trust & LP B), period end
|
$
|
62.26
|
$
|
61.25
|
|
|
|
|
|
Liquidity, Debt
and Distributions
|
|
|
|
Cash Position, period
end
|
$
|
25,000
|
|
|
Subsequent Committed
Financing
|
$
|
38,000
|
|
|
Line of
Credit
|
$
|
200,000
|
|
|
Total Available
Liquidity
|
$
|
263,000
|
|
|
VTB Mortgage
Receivable
|
$
|
31,000
|
|
|
Total
|
$
|
294,000
|
|
|
Liqudity as a % of
Period Total Debt
|
9%
|
|
|
Debt (net of cash) as
a % of Reported Asset Value
|
48%
|
|
|
|
|
|
|
Principal
Outstanding, period end
|
$
|
2,830,036
|
$
|
2,751,478
|
|
Interest Coverage
Ratio (Rolling 4 quarters)
|
2.69
|
2.59
|
|
|
|
|
|
Regular Distributions
Declared (Trust Units & LP B Units)
|
$
|
12.7
|
$
|
12.7
|
|
Regular Distributions
Declared Per Unit (Trust Units & LP B Units)
|
$
|
0.250
|
$
|
0.250
|
|
Regular Payout as a %
FFO
|
45.1%
|
52.3%
|
|
|
|
|
|
Stabilized Apartment
Units
|
32,968
|
32,361
|
|
Un-stabilized
Apartment Units
|
449
|
826
|
|
Total Apartment
Units
|
33,417
|
33,187
|
|
|
*Comparative figures
adjust for leases payments relating to IFRS 16 and is apples to
apples for the Trust's new Asset Management Model
|
|
**Same Property
figures exclude un-stabilized properties, sold assets, adjust for
lease payments relating to IFRS 16 and is apples to apples for the
Trust's new Asset Management Model
|
NOI, FFO and AFFO are widely accepted supplemental measures
of the performance of a Canadian Real Estate entity; however, they
are not 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 three months ended
March 31, 2019, under the section
titled, "Performance Measures". Same property results
exclude 299-units in Calgary
acquired November 2018, 71-units from
Pines Edge 3 completed July 2018 and
79-units from Pines Edge 2 completed June
2017.
PORTFOLIO HIGHLIGHTS
|
Portfolio
Highlights for the First Quarter of 2019
|
|
Mar-19
|
Dec-18
|
Mar-18
|
Average Occupancy
(Period Average)
|
96.62%
|
95.77%
|
96.07%
|
|
|
|
|
Average Monthly Rent
(Period Ended)
|
$
|
1,103
|
$
|
1,094
|
$
|
1,062
|
Average Market Rent
(Period Ended)
|
$
|
1,299
|
$
|
1,281
|
$
|
1,253
|
Average Market Rent
(Period Ended), including incentives
|
$
|
1,186
|
$
|
1,171
|
$
|
1,129
|
Average Occupied Rent
(Period Ended)
|
$
|
1,139
|
$
|
1,138
|
$
|
1,094
|
|
|
|
|
Loss -to-Lease
(Period Ended) ($ millions )
|
$
|
61.3
|
$
|
54.0
|
$
|
46.3
|
Loss -to-Lease
(Period Ended) ($ millions ), including incentives
|
$
|
18.3
|
$
|
12.3
|
$
|
13.1
|
Loss -to-Lease Per
Trust Unit (Period Ended)
|
$
|
1.21
|
$
|
1.06
|
$
|
0.91
|
Loss -to-Lease Per
Trust Unit (Period Ended), including incentives
|
$
|
0.36
|
$
|
0.24
|
$
|
0.26
|
|
|
|
|
QUARTERLY SEQUENTIAL REVENUE GROWTH
|
|
|
|
|
|
|
|
|
|
|
Stabilized Revenue
Growth
|
# of
Units
|
|
Q1 2019 vs Q4
2018
|
|
Q4 2018 vs Q3
2018
|
|
Q3 2018 vs Q2
2018
|
|
Q2 2018 vs Q1
2018
|
|
Edmonton
|
|
12,906
|
|
|
0.2
|
%
|
|
1.1
|
%
|
|
0.2
|
%
|
|
1.4
|
%
|
Calgary
|
|
5,657
|
|
|
2.2
|
%
|
|
0.7
|
%
|
|
1.4
|
%
|
|
1.2
|
%
|
Red Deer
|
|
939
|
|
|
5.5
|
%
|
|
2.8
|
%
|
|
0.5
|
%
|
|
1.9
|
%
|
Grande
Prairie
|
|
645
|
|
|
2.2
|
%
|
|
3.5
|
%
|
|
3.7
|
%
|
|
4.1
|
%
|
Fort
McMurray
|
|
352
|
|
|
-0.7
|
%
|
|
-2.0
|
%
|
|
-3.4
|
%
|
|
0.8
|
%
|
Quebec
|
|
6,000
|
|
|
1.2
|
%
|
|
1.4
|
%
|
|
0.5
|
%
|
|
0.3
|
%
|
Saskatchewan
|
|
3,884
|
|
|
0.1
|
%
|
|
0.8
|
%
|
|
-1.4
|
%
|
|
1.3
|
%
|
Ontario
|
|
2,585
|
|
|
1.2
|
%
|
|
1.1
|
%
|
|
0.4
|
%
|
|
0.8
|
%
|
|
|
32,968
|
|
|
1.0
|
%
|
|
1.1
|
%
|
|
0.3
|
%
|
|
1.2
|
%
|
2019 FINANCIAL GUIDANCE
|
Description
|
2019
Guidance
|
Stabilized
Building NOI
Growth
|
4% to 9%
|
|
|
FFO Per
Unit
|
$2.35 to
$2.50
|
AFFO Per
Unit
|
$1.88 to $2.03
($717/door maintenance capital)
|
|
Capital Budget
($000's)
|
2019 3 Month
Actual
|
Per
Suite
|
2019 Budget -
Low End
|
Per
Suite
|
2019 Budget -
High End
|
Per
Suite
|
Maintenance
Capital
|
$
|
5,990
|
179
|
$
|
23,960
|
717
|
$
|
23,960
|
717
|
Value-added Capital
(including suite upgrades and
property, plant & equipment)
|
|
19,880
|
595
|
|
71,572
|
2,142
|
|
98,645
|
2,952
|
Total Property
Capital
|
$
|
25,870
|
774
|
$
|
95,532
|
2,859
|
$
|
122,605
|
3,669
|
Acquisitions/Development
|
|
11,828
|
|
|
44,000
|
|
|
44,000
|
|
Total Capital
Investment
|
$
|
37,698
|
|
$
|
139,532
|
|
$
|
166,605
|
|
The reader is cautioned that this information is forward-looking
and actual results may vary materially from those reported.
The Trust reviews these key assumptions quarterly and based on this
review may change its outlook.
Q1 REGULAR MONTHLY DISTRIBUTION
Month
|
|
Per
Unit
|
Annualized
|
Record
Date
|
Distribution
Date
|
May, 2019
|
|
$
|
0.0834
|
$
|
1.00
|
31-May-19
|
17-Jun-19
|
June, 2019
|
|
$
|
0.0834
|
$
|
1.00
|
28-Jun-19
|
15-Jul-19
|
July, 2019
|
|
$
|
0.0834
|
$
|
1.00
|
31-Jul-19
|
15-Aug-19
|
FINANCIAL AND SUPPLEMENTARY INFORMATION
Boardwalk produces quarterly financial statements, management
discussion and analysis, and a supplemental information package
that provides detailed information regarding the Trust's activities
during the quarter. Financial and supplementary information
is available on Boardwalk's investor website at
www.bwalk.com/investors
TELECONFERENCE ON FIRST QUARTER 2019 FINANCIAL
RESULTS
Boardwalk invites you to participate in the teleconference that
will be held to discuss these results tomorrow morning
(May 16, 2019) at 11:00 am Eastern Time. Senior management will
speak to the period's results and provide an update. Presentation
materials will be made available on Boardwalk's investor website at
www.boardwalkreit.com prior to the call.
Teleconference: The telephone numbers for the
conference are 416-764-8688 (local/international callers) or
toll-free 1-888-390-0546 (within North
America).
Note: Please provide the operator with the below Conference Call
ID or Topic when dialing in to the call.
Conference ID: 64582881
Topic: Boardwalk REIT First Quarter Results
Webcast: Investors will be able to listen to the
call and view Boardwalk's slide presentation by visiting
www.bwalk.com/investors 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:
https://event.on24.com/wcc/r/1974326/B50BFCDB5E4813A77106A2C3139E498C
Replay: An audio recording of the teleconference will be
available on the Trust's website:
www.bwalk.com/investors
CORPORATE PROFILE
Boardwalk REIT strives to be Canada's friendliest communities and currently
owns and operates more than 200 communities with over 33,000
residential units totaling over 28 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 acquisitions, dispositions, development, and effective
management of its residential multi-family communities.
Boardwalk REIT is vertically integrated and is Canada's leading owner/operator of
multi-family communities bringing Residents home to properties
located in Alberta, Saskatchewan, Ontario, and Quebec.
Boardwalk REIT's Trust units are listed on the Toronto Stock
Exchange, trading under the symbol BEI.UN. Additional
information about Boardwalk REIT can be found on the Trust's
website at www.BoardwalkREIT.com.
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 2019 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 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
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.
View original
content:http://www.prnewswire.com/news-releases/boardwalk-reit-reports-ffo-per-unit-growth-of-16-7-300851095.html
SOURCE Boardwalk Real Estate Investment Trust