QUÉBEC CITY, Aug. 7, 2020 /CNW Telbec/ - Cominar Real
Estate Investment Trust ("Cominar" or the "REIT") (TSX: CUF.UN)
announces its results for the quarter ended June 30, 2020.
2020 SECOND QUARTER - HIGHLIGHTS
- FFO1 per unit of $0.19, materially impacted by COVID-19 when
compared to $0.26 for the same period
in 2019
- Same property NOI1 decrease of 14.8%, including a
decrease of 41.8% for the retail segment due to the closure of
shopping malls, a decrease of 1.3% for the industrial segment and
an increase of 0.4% for the office segment, evidencing strong
fundamentals of the latter two segments
- Stable committed occupancy rate of 93.9% year over year
- 12.7% growth in the average net rent of renewed leases
(six-month period) driven by a 22.3% increase in the industrial
segment, a 7.9% increase in the office segment and a 1.8% increase
in the retail segment
- Negative change in fair value of $330.6
million on a proportionate basis1 as the
estimated COVID-19 impacts on portfolio valuation, including a
negative fair value adjustment of $251.5
million for the retail segment, of which $165.0 million from enclosed malls
- Available liquidity of $434.0
million ($34.0 million of cash
and $400.0 million of undrawn credit
facility) as at June 30, 2020, after
early repayment in May 2020 of the
$300.0 million Series 4 senior
unsecured debentures maturing in July
2020
- The distribution will be decreased from $0.06 per month to $0.03 per month, starting with the August 2020 distribution, in order to optimize
Cominar's financial flexibility
"The COVID-19 pandemic had a significant adverse impact on
our financial results for the quarter as confinement and other
draconian measures were implemented for our well-being, and our
economy was far from operating on all cylinders", said
Sylvain Cossette, President and
Chief Executive Officer of Cominar. Mr. Cossette added, "Despite
business and mall closures, we estimate that we will be receiving
approximately 90% of total invoiced rent for the last quarter,
including 75% that has already been received, 9% to be received
from government support and a remaining 6% from tenants with whom
an agreement has been signed or negotiated. We are aware of the
challenges ahead in retail, however remain optimistic about
essential services, general merchandisers and other segments of the
retail industry demonstrating greater resiliency. In order to
maintain our financial flexibility, withstand volatility associated
with the pandemic and the uncertainties which remain, and invest in
our properties and development projects, we have decided to reduce
our distribution from $0.72 per unit
on an annual basis to $0.36 per unit
on an annual basis".
"The $331 million negative
change in fair value on our properties this quarter due to the
impact of COVID-19 was mostly accounted for by the retail segment
and especially enclosed malls" stated Antoine Tronquoy, Vice
President, Capital Markets and Interim Chief Financial Officer.
"If COVID-19 has had an important adverse impact on our operating
performance for the quarter, it is worth underlying though that
committed occupancy rate remained stable at 93.9% and that we
recorded a 12.7% growth on the average net rent of renewed leases
for the first half of the year, driven by the industrial and office
segments. Also, our current liquidity position of $434 million, which takes into account the early
repayment in May of the $300 million
of unsecured debentures maturing in July
2020, provides us with healthy financial flexibility to
navigate the unknown impact and duration of the pandemic."
FINANCIAL AND OPERATING HIGHLIGHTS
- Net income (loss) for the quarter ended June 30, 2020, amounted to $(318.1) million compared to $51.5 million in 2019. This reflects a decrease
of $328.9 million in change in fair
value of investment properties, a decrease of $16.4 million in net operating income, a
$15.7 million impairment of goodwill,
a decrease of $10.0 million of share
in joint ventures' net income, all related to the COVID-19 impact,
partially offset by a decrease of $3.9
million in restructuring costs. Refer to section "COVID-19 -
impact analysis and risks" of the June 30,
2020, Management Discussion and Analysis.
- For the quarter ended June 30,
2020, Cominar revalued its entire real estate portfolio and
determined that a net decrease of $(320.6)
million was necessary to adjust the carrying amount of
investment properties to fair value. For the retail portfolio, the
decrease represents $251.5 million (a
11% decrease of the retail portfolio fair value), of which
$165.0 million is from enclosed
malls
- Expected credit losses, for the quarter ended June 30, 2020, were $18.2
million or 11.3% of operating revenues, mainly due to
COVID-19, of which $14.6 million is
for retail, $1.6 million is for
office and $2.1 million is for
industrial.
- Adjusted net income for the quarter ended June 30, 2020 was $35.7
million compared to $50.3
million for last year's comparable period. The decrease is
mainly due to the decrease in net operating income related to
COVID-19 and from properties sold in 2019 and 2020, partially
offset by an increase in same property NOI excluding the estimated
COVID-19 impact.
- FFO1 per unit was $0.19 for Q2 2020, compared to $0.26 per unit for Q2 2019. The decrease is
mainly due to the decrease in NOI and to debenture redemption
costs. Excluding debenture redemption costs, FFO would have been
$36.7 million or $0.20 per unit in 2020 compared to $51.2 million or $0.28 per unit in 2019.
- AFFO1 per unit was $0.12 for Q2 2020, compared to $0.18 per unit for Q2 2019, due to the decrease
in FFO. Excluding FFO adjusted items, AFFO would have been
$23.6 million or $0.13 per unit in 2020 compared to $37.4 million or $0.20 per unit in 2019.
- AFFO payout ratio1 for Q2 2020 was 150.0%, up from
100.0% in Q2 2019.
- Same property NOI1 for Q2 2020 was $75.4 million compared to $88.5 million for Q2 2019, resulting in a (14.8)%
year-over-year decrease driven by 0.4% growth in the office
portfolio combined with (1.3)% decline in the industrial and flex
portfolio and (41.8)% decline in the retail portfolio. This
decrease is mainly attributable to the financial impact of
COVID-19, which impacted Cominar for the months of April, May and
June 2020. Refer to section "COVID-19
- impact analysis and risks" of the June 30,
2020, Management Discussion and Analysis.
- The growth in the average net rent on renewed leases was 12.7%
in Q2 2020, compared to 2.8% in Q2 2019. Renewal rent growth was
driven by a strong 22.3% increase in the industrial and flex
portfolio, a 7.9% increase in the office portfolio partially and a
1.8% increase in the retail portfolio.
- The retention rate on 2020 expiring leases was 51.7% in Q2 2020
versus 57.9% in Q2 2019. During the first six months of 2020, we
renewed 3.1 million square feet and signed 1.4 million square feet
of new leases representing 75.2% of 2020 expiring leasable
area.
- Committed occupancy remained stable year-over-year to 93.9% as
at June 30, 2020. In-place occupancy
was 90.4% as at June 30, 2020, up 50
bps from 89.9% as at June 30,
2019.
- Our weighting to industrial and flex properties as a percentage
of NOI for the quarter ended June 30,
2020 is 30.1%, which has increased compared to 25.1% for the
quarter ended June 30, 2019. The
contribution of our office portfolio increased to 46.4% from 40.2%
and our retail weighting decreased to 23.5% from 34.7%.
- 5.2% year-over-year increase in trust administrative expenses,
up to $4.0 million for Q2 2020 from
$3.8 million in Q2 2019, mainly due
to an increase in professional fees.
- As at June 30, 2020, the area
previously occupied by Sears for which leases were signed or in
advanced discussions was 61%, down from 63% as at March 31, 2020.
BALANCE SHEET AND LIQUIDITY HIGHLIGHTS
- The debt ratio was 54.5% as at June 30,
2020, up from 51.4% as at December
31, 2019, which reflects a decrease in the fair value of
investment properties of $319.4
million.
- On June 9, 2020, Cominar entered
into a 27-month agreement for a new secured credit facility of
$120,0 million maturing in
September 2022. This new credit
facility bears interest at the prime rate plus 250 basis points or
at the bankers' acceptance rate plus 350 basis points. As at
June 30, this credit facility was
secured by immovable hypothecs on investment properties with a book
value $206.4 million.
- On May 5, 2020, Cominar issued
$150.0 million in Series 12 senior
unsecured debentures bearing interest at a rate of 5.95% and
maturing in May 2025.
- On May 13, 2020, Cominar early
redeemed $300.0 million in aggregate
principal of 4.941% Series 4 senior unsecured debentures using
available cash and its unsecured renewable credit facility. Cominar
paid $2.5 million in yield
maintenance fees and other costs in connection with the
redemption.
- Debt to EBITDA1 as at June
30, 2020 was 11.0x compared to 10.6x as at December 31, 2019.
- As at June 30, 2020, the
unencumbered asset ratio was 1.77:1, down from 1.82:1 as at
December 31, 2019. Our pool of
unencumbered properties totaled $2.0
billion as at June 30,
2020.
- Unsecured debt to total debt was 32.7% as at June 30, 2020, down from 36.5% as at December 31, 2019.
- As at June 30, 2020, Cominar had
$34.0 million of cash on hand,
$400.0 million of availability on its
$400 million unsecured renewable
credit facility.
INVESTMENT HIGHLIGHTS
- For the six-month period ended June 30,
2020, investments in income properties including capital
expenditures, leasing costs and leasehold improvements totaled
$53.2 million, down 16.4% from
$63.6 million for last year's
comparable period. Including investments in development activities,
year to date capital expenditures totaled $67.0 million, down 7.8% from $72.6 million in 2019.
- Investment properties held for sale as at June 30, 2020 totaled $245.5 million, an increase from $11.7 million at December
31, 2019.
COVID-19 PANDEMIC UPDATE
Rent collection
To date, Cominar has collected approximately 75% of gross rent
invoiced for the months of April, May and June 2020. Taking into account amounts receivable
from the Canada Emergency
Commercial Rent Assistance (CECRA) program from both levels of
government (9%) and the portion to be assumed by clients eligible
for assistance or with whom a rent deferral or reduction agreement
has been signed (6%), management estimates it will be able to
collect approximately 90% of the gross rent invoiced (before
provision for expected credit losses) for the second quarter of
2020. The balance 10% is composed of expected credit losses (6%)
(including the CECRA portion to be assumed by Cominar and rent
credits granted to clients), agreements still under discussion (1%)
and other amounts due by tenants (3%).
The total expected credit loss recorded in our financial
statements amounts to 11.3% of total operating revenues for the
quarter. In total, 14% of our gross invoiced rent was due by
tenants that are eligible for the CECRA.
Industrial portfolio
To date, Cominar has collected approximately 89% of gross rent
invoiced for the months of April, May and June 2020. Taking into account amounts receivable
from the Canada Emergency
Commercial Rent Assistance (CECRA) program from both levels of
government (4%) and the portion to be assumed by clients eligible
for assistance or with whom a rent deferral or reduction agreement
has been signed (4%), management estimates it will be able to
collect approximately 97% of the gross rent invoiced (before
provision for expected credit losses) for the second quarter of
2020. The balance 3% is composed of expected credit losses (1%)
(including the CECRA portion to be assumed by Cominar and rent
credits granted to clients) and other amounts due by tenants
(2%).
The total expected credit losses recorded in our financial
statements for the industrial segment amounts to 5.2% of total
operating revenues for the quarter. In total, 7% of our gross
invoiced rent was due by tenants that are eligible for the
CECRA.
Office portfolio
To date, Cominar has collected approximately 94% of gross rent
invoiced for the months of April, May and June 2020. Taking into account amounts receivable
from the Canada Emergency
Commercial Rent Assistance (CECRA) program from both levels of
government (2%) and the portion to be assumed by clients eligible
for assistance or with whom a rent deferral or reduction agreement
has been signed (2%), management estimates it will be able to
collect approximately 98% of the gross rent invoiced (before
provision for expected credit losses) for the second quarter of
2020. The balance 2% is composed of other amounts due by
tenants.
The total expected credit losses recorded in our financial
statements for the office segment amounts to 2.5% of total
operating revenues for the quarter. In total, 3% of our gross
invoiced rent was due by tenants that are eligible for the
CECRA.
Retail portfolio
To date, Cominar has collected approximately 46% of gross rent
invoiced for the months of April, May and June 2020. Taking into account amounts receivable
from the Canada Emergency
Commercial Rent Assistance (CECRA) program from both levels of
government (21%) and the portion to be assumed by clients eligible
for assistance or with whom a rent deferral or reduction agreement
has been signed (12%), management estimates it will be able to
collect approximately 79% of the gross rent invoiced (before
provision for expected credit losses) for the second quarter of
2020. The balance 21% is composed of expected credit losses (16%)
(including the CECRA portion to be assumed by Cominar and rent
credits granted to clients), 2% agreements still under discussions
and other amounts due by tenants (3%).
The total expected credit losses recorded in our financial
statements for the retail segment amounts to 25.6% of total
operating revenues for the quarter. In total, 33% of our gross
invoiced rent was due by tenants that are eligible for the
CECRA.
The following table highlights expected credit losses (expense)
for the quarter ended June 30,
2020:
Quarter ended June
30, 2020
|
Office
|
Retail
|
Industrial and
flex
|
Total
|
|
|
|
|
|
Expected credit
losses on short-term rent deferrals (provision)
|
270
|
827
|
193
|
1,290
|
Expected credit
losses on trade receivables (provision)
|
581
|
3,848
|
1,079
|
5,508
|
|
851
|
4,675
|
1,272
|
6,798
|
Expected credit
losses - owner portion of CECRA (12.5%)
|
170
|
2,495
|
351
|
3,016
|
Expected credit
losses - rent reduction
|
564
|
7,398
|
439
|
8,401
|
Total expected credit
losses
|
1,585
|
14,568
|
2,062
|
18,215
|
Percentage of
operating revenues
|
2.5 %
|
25.6 %
|
5.2 %
|
11.3 %
|
Cominar's expected credit losses as of June 30, 2020 includes estimates of the property
owner portion of the CECRA program which represents 12.5% of the
eligible tenant's rent for April, May and June, of uncertainty of
the recoverability of April, May and June rents related to tenants
not part of the CECRA program, of the uncertainty of the
recoverability on short-term rent deferrals, of rent reductions
provided to tenants related to rents already recognized as a
receivable when the tenant made a request for financial assistance
and of the uncertainty of the recoverability of all other
receivables.
Operating results
COVID-19 has impacted Cominar's financial results. In
particular, the pandemic has impacted the capacity of our clients
to pay their rent in full or in part. The CECRA program requires
property owners to absorb 25% of gross rent for the months of
April, May and June 2020 in respect
of clients eligible for the federal program. The Quebec government announced that it will make
up 50% of this loss. Cominar has also granted several relief
measures ranging from rent reductions to deferred rent payments up
to 12 months to clients ineligible for government programs. All of
these initiatives contributed to a significant increase in rent
receivable and Cominar recorded an expected credit loss of
$18.2 million for the second quarter.
Management estimates the portion of expected credit losses
attributable to COVID-19 at $17.1
million.
In addition, our revenues were also affected by lower revenues
from percentage leases and by decreases in temporary rentals and
parking revenues. Recoverable operating revenues also declined
significantly due to reductions in our operating expenses following
the impacts of COVID-19 and other decreases in line with our
strategic plan.
We observed a significant decrease in the energy expense
following the closure of shopping centers, offices and certain
industrial properties. Additionally, Cominar had temporarily
reduced its workforce and implemented various cost cutting
measures.
Capital expenditures and cost management
To minimize the impact on free cash flows of the pressure on
revenues resulting from the pandemic, Cominar is working to reduce
operating expenses and capital expenditures. Various initiatives
aimed at reducing or deferring operating expenses and capital
expenditures have been implemented, including reduction of tenant
incentives where feasable and capital investments, deferral of
property tax and hydro payments, temporary layoffs and reduction of
operating costs, including energy and cleaning and maintenance
services costs. These initiatives related to operations have
already reduced the same property operating expenses
(excluding realty taxes and services) for the second quarter of
2020 of an estimated $2.0 million
when compared to budgeted expenses. When compared to 2019, those
expenses for the first two quarters of 2020 decreased by
$2.3 million. Total operating
expenses excluding expected credit losses for the second quarter of
2020 decreased by $15.8 million when
compared to budgeted operating expenses for the same
period.
NON-IFRS FINANCIAL MEASURES
Cominar's financial statements are prepared in accordance
with IFRS. Management uses a number of measures, which are not
standardized under IFRS and should not be construed as an
alternative to financial measures calculated in accordance with
IFRS. Cominar uses those measures to better assess its performance.
Cominar's proportionate share, same property net operating income,
funds from operations (FFO), adjusted funds from operations (AFFO),
debt ratio and debt to EBITDA are not measures recognized by
International Financial Reporting Standards (IFRS) and do not have
standardized meanings prescribed by IFRS. Such measures may differ
from similar computations as reported by similar entities and,
accordingly, may not be comparable to similar measures reported by
such other entities. These non-IFRS financial measures are more
fully defined and discussed in Cominar's interim management's
discussion and analysis for the three and six-month periods ended
June 30, 2020, available at
Cominar.com and on Sedar.com.
RESULTS OF OPERATIONS
|
Quarter
|
|
Year-to-date (six
months)
|
Periods ended June
30
|
2020 ¹
|
|
2019
|
|
2020 ²
|
|
2019
|
|
$
|
|
$
|
|
|
$
|
|
$
|
Operating
revenues
|
160,550
|
|
176,627
|
|
|
332,659
|
|
358,571
|
Operating
expenses
|
(87,960)
|
|
(87,644)
|
|
|
(174,344)
|
|
(182,903)
|
Net operating
income
|
72,590
|
|
88,983
|
|
|
158,315
|
|
175,668
|
Finance
charges
|
(36,912)
|
|
(36,398)
|
|
|
(76,164)
|
|
(73,149)
|
Trust administrative
expenses
|
(4,038)
|
|
(3,838)
|
|
|
(8,182)
|
|
(9,291)
|
Change in fair value
of investment properties
|
(320,631)
|
|
8,291
|
|
|
(319,423)
|
|
8,070
|
Share of joint
ventures' net income
|
(8,481)
|
|
1,503
|
|
|
(6,898)
|
|
2,891
|
Transaction
costs
|
(4,991)
|
|
(3,151)
|
|
|
(5,137)
|
|
(4,490)
|
Restructuring
costs
|
—
|
|
(3,916)
|
|
|
—
|
|
(3,916)
|
Impairment of
goodwill
|
(15,721)
|
|
—
|
|
|
(15,721)
|
|
—
|
Net income (loss)
before income taxes
|
(318,184)
|
|
51,474
|
|
|
(273,210)
|
|
95,783
|
|
|
|
|
|
|
Current income
taxes
|
65
|
|
—
|
|
|
65
|
|
—
|
Net income (loss)
and comprehensive income (loss)
|
(318,119)
|
|
51,474
|
|
|
(273,145)
|
|
95,783
|
1
|
The quarter ended
June 30, 2020 includes the estimated financial impact of COVID-19
and $2.5 million in yield maintenance fees paid in connection with
the debenture Series 4 redemption (includes $3.9 million of
restructuring costs for the quarter ended June 30,
2019).
|
2
|
In addition to the
quarter events explained above, the six month period ended June
30,2020 includes $4.6 million of penalties paid on mortgage
repayments before maturity ($1.0 million in severance allowance
paid following the departure of an executive officer for the six
month period ended June 30, 2019).
|
Net income (loss) for the second quarter of 2020 amounted to
$(318.1) million compared to
$51.5 million in 2019. This reflects
a decrease of $328.9 million in
change in fair value of investment properties, a decrease of
$16.4 million in net operating
income, a $15.7 million impairment of
goodwill, a decrease of $10.0 million
of share in joint ventures' net income, all related to the COVID-19
impact, partially offset by a decreases of $3.9 million in restructuring costs. Refer to
section "COVID-19 - impact analysis and risks" of the June 30,2020, Management Discussion and
Analysis.
SAME PROPERTY NET OPERATING INCOME
Same property NOI is a non-IFRS measure used by Cominar to
provide an indication of the period-over-period operating
profitability of the same property portfolio, that is, Cominar's
ability to increase revenues, manage costs, and generate organic
growth. The same property NOI includes the results of properties
owned by Cominar as at December 31
2018, with the exception of results from the properties sold,
acquired and under development in 2019 and 2020, as well as the
rental income arising from the recognition of leases on a
straight-line basis that is a non-cash item and which, by excluding
it, will allow this measure to present the impact of actual rents
collected by Cominar.
|
Quarter
|
|
Year-to-date (six
months)
|
Periods ended June
30
|
2020 ¹
|
|
2019
|
|
|
|
2020 ¹
|
|
2019
|
|
|
|
$
|
|
$
|
|
% Δ
|
|
|
$
|
|
$
|
|
% Δ
|
Property
type
|
|
|
|
|
|
|
|
Office
|
34,953
|
|
34,811
|
|
0.4
|
|
|
69,158
|
|
66,829
|
|
3.5
|
Retail
|
18,057
|
|
31,009
|
|
(41.8)
|
|
|
47,757
|
|
60,893
|
|
(21.6)
|
Industrial and
flex
|
22,348
|
|
22,653
|
|
(1.3)
|
|
|
45,906
|
|
44,884
|
|
2.3
|
Same property NOI
— Cominar's proportionate share 1
|
75,358
|
|
88,473
|
|
(14.8)
|
|
|
162,821
|
|
172,606
|
|
(5.7)
|
Properties sold,
acquired and under development in 2019 and 2020
|
(281)
|
|
2,995
|
|
(109.4)
|
|
|
537
|
|
7,940
|
|
(93.2)
|
NOI — Cominar's
proportionate share 2
|
75,077
|
|
91,468
|
|
(17.9)
|
|
|
163,358
|
|
180,546
|
|
(9.5)
|
NOI — Financial
statements
|
72,590
|
|
88,983
|
|
(18.4)
|
|
|
158,315
|
|
175,668
|
|
(9.9)
|
NOI — Joint
ventures
|
2,487
|
|
2,485
|
|
0.1
|
|
|
5,043
|
|
4,878
|
|
3.4
|
1
|
The quarter and the
six-month period ended June 30, 2020 include the estimated
financial impact of COVID-19. Refer to section "COVID-19 - Impact
analysis and risks" of the June 30,2020, Management Discussion and
Analysis.
|
2
|
Refer to section
"Non-IFRS financial measures" in this press release.
|
Second quarter decrease of 14.8% in same property NOI according
to Cominar's proportionate share is attributable to the financial
impact of COVID-19, which impacted Cominar for the months of April,
May and June 2020. Refer to section
"COVID-19 - impact analysis and risks" of the June 30, 2020, Management Discussion and
Analysis.
FUNDS FROM OPERATIONS (FFO) AND ADJUSTED FUNDS FROM
OPERATIONS (AFFO)
FFO is a non-IFRS measure which represents a standard real
estate benchmark used to measure an entity's performance, and is
calculated by Cominar as defined by REALpac as net income
(calculated in accordance with IFRS) adjusted for, among other
things, changes in the fair value of investment properties,
deferred taxes and income taxes related to a disposition of
properties, derecognition and impairment of goodwill, initial and
re-leasing salary costs, adjustments relating to the accounting of
joint ventures and transaction costs incurred upon a business
combination or a disposition of properties. Management believes FFO
to be a useful earnings measure as it adjusts net income for items
that are not related to the trend in occupancy levels, rental rates
and property operating costs.
AFFO is a non-IFRS measure which, by excluding from the
calculation of FFO the rental income arising from the recognition
of leases on a straight-line basis, the investments needed to
maintain the property portfolio's capacity to generate rental
income and a provision for leasing costs is calculated as defined
by REALpac. Management believes AFFO provides a meaningful measure
of Cominar's capacity to generate steady profits.
The following table presents a reconciliation of net income, as
determined in accordance with IFRS, and funds from operations and
adjusted funds from operations:
|
Quarter
|
|
|
Year-to-date (six
months)
|
|
Periods ended June
30
|
2020 ¹
|
|
2019
|
|
2020 ¹
|
|
2019
|
|
|
$
|
|
$
|
|
|
$
|
|
$
|
|
Net income
(loss)
|
(318,119)
|
|
51,474
|
|
|
(273,145)
|
|
95,783
|
|
Initial and
re-leasing salary costs
|
854
|
|
758
|
|
|
1,846
|
|
1,602
|
|
Change in fair value
of investment properties 2
|
330,634
|
|
(8,291)
|
|
|
329,426
|
|
(8,070)
|
|
Capitalizable
interest on properties under development — joint
ventures
|
136
|
|
181
|
|
|
273
|
|
355
|
|
Transaction
costs
|
4,991
|
|
3,151
|
|
|
5,137
|
|
4,490
|
|
Impairment of
goodwill
|
15,721
|
|
—
|
|
|
15,721
|
|
—
|
|
FFO 2,
3
|
34,217
|
|
47,273
|
|
|
79,258
|
|
94,160
|
|
Provision for leasing
costs
|
(7,500)
|
|
(8,020)
|
|
|
(14,429)
|
|
(16,449)
|
|
Recognition of leases
on a straight-line basis 2
|
445
|
|
37
|
|
|
(26)
|
|
(126)
|
|
Capital expenditures
— maintenance of rental income generating capacity
|
(6,045)
|
|
(5,849)
|
|
|
(10,905)
|
|
(10,617)
|
|
AFFO 2,
3
|
21,117
|
|
33,441
|
|
|
53,898
|
|
66,968
|
|
Payout ratio of AFFO
3, 4
|
150.0
|
%
|
100.0
|
%
|
|
124.1
|
%
|
97.3
|
%
|
1
|
The quarter and the
six-month period ended June 30, 2020 include the estimated
financial impact of COVID-19.
|
2
|
Including Cominar's
proportionate share in joint ventures.
|
3
|
Refer to section
"Non-IFRS financial measures" in this press release.
|
4
|
Fully
diluted.
|
FFO for the second quarter of 2020 decreased from the
corresponding quarter of 2019 due mainly to the decrease in NOI and
to debenture redemption costs. Excluding debenture redemption
costs, FFO would have been $36.7 million or $0.20 per unit in 2020 compared to $51.2 million or $0.28 per unit in 2019.
AFFO for the second quarter of 2020 decreased from the
corresponding quarter of 2019 due mainly to the decrease in FFO.
Excluding debenture redemption costs, AFFO would have been
$23.6 million or $0.13 per unit in 2020 compared to $37.4 million or $0.20 per unit in 2019 and consequently, AFFO
adjusted payout ratio would have been 138%.
OCCUPANCY RATES
|
Montreal
|
|
Québec
City
|
|
Ottawa
|
|
Total
|
As at June 30,
2020
|
Committed
|
In-Place
|
|
Committed
|
In-Place
|
|
Committed
|
In-Place
|
|
Committed
|
In-Place
|
Property
type
|
|
|
|
|
|
|
|
|
|
|
|
Office
|
91.1
|
%
|
87.3
|
%
|
|
97.8
|
%
|
96.8
|
%
|
|
93.3
|
%
|
92.5
|
%
|
|
93.0
|
%
|
90.3
|
%
|
Retail
|
92.4
|
%
|
86.1
|
%
|
|
91.3
|
%
|
86.6
|
%
|
|
86.2
|
%
|
59.4
|
%
|
|
91.8
|
%
|
85.3
|
%
|
Industrial and
flex
|
95.4
|
%
|
92.7
|
%
|
|
96.9
|
%
|
96.1
|
%
|
|
N/A
|
N/A
|
|
95.7
|
%
|
93.5
|
%
|
Portfolio
total
|
93.6
|
%
|
89.8
|
%
|
|
94.9
|
%
|
92.5
|
%
|
|
92.3
|
%
|
87.4
|
%
|
|
93.9
|
%
|
90.4
|
%
|
SUBSEQUENT EVENT
In order to maintain our financial flexibility, withstand
volatility associated with the pandemic and the uncertainties which
remain, and invest in our properties and development projects, we
have decided to reduce our distribution from $0.72 per unit on an annual basis ($0.06 per unit per month), to $0.36 per unit on an annual basis ($0.03 per unit per month).
ADDITIONAL FINANCIAL INFORMATION
Cominar's condensed interim consolidated financial statements
and interim management's discussion and analysis for the second
quarter of 2020 are filed with SEDAR at sedar.com and are available
on Cominar's website at cominar.com.
CONFERENCE CALL ON AUGUST 7,
2020
On Friday, August 7, 2020 at 11 a.m. (ET), Cominar's
management will hold a conference call to present the results for
the second quarter of 2020. In order to participate please dial
1 888 390-0546. A presentation will be available
before the conference call on the REIT's website at cominar.com,
under the Conference Call header. In addition, a replay of the
conference call will be available from Friday, August 7, 2020
at 2 p.m. to Friday, August 14, 2020 at 11:59 p.m.,
by dialing 1 888 390-0541 and entering
passcode: 455084#.
PROFILE AS AT AUGUST 7, 2020
Cominar is one of the largest diversified real estate investment
trusts in Canada and is the
largest commercial property owner in the Province of Québec. Our
portfolio consists of 315 high-quality office, retail and
industrial properties, totaling 35.9 million square feet located in
the Montreal, Québec City and
Ottawa areas. Cominar's primary
objective is to maximize total return to unitholders by way of
tax-efficient distributions and maximizing the unit value through
the proactive management of our portfolio.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements with
respect to Cominar and its operations, strategy, financial
performance and financial position. These statements generally can
be identified by the use of forward-looking words such as "may",
"will", "expect", "estimate", "anticipate", "intend", "believe" or
"continue" or the negative thereof or similar variations and the
use of conditional and future tenses. The actual results and
performance of Cominar 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. Some 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 regulation and
the factors described under "Risk Factors" in Cominar's Annual
Information Form. The cautionary statements qualify all
forward-looking statements attributable to Cominar and persons
acting on its behalf. Unless otherwise stated, all forward-looking
statements speak only as of the date of this press release. Cominar
does not assume any obligation to update the aforementioned
forward-looking statements, except as required by applicable
laws.
SOURCE COMINAR REAL ESTATE INVESTMENT TRUST