- 92.3% of April 2020 rent received
to date
- Monthly distributions revised to $0.0375 to enhance liquidity and reduce debt
- Temporary suspension of DRIP
- Solid cash on hand position and revolving credit facility
available for liquidity
MONTREAL, April 22, 2020 /CNW Telbec/ - PRO Real Estate
Investment Trust ("PROREIT" or the "REIT") (TSX: PRV.UN) today
reported financial and operational metrics and provided a business
update in the context of the COVID-19 pandemic.
"I am pleased to report that our April rent collection has been
very strong in this COVID-19 pandemic environment with 97.4% of
April rents received or agreed for deferred payment. This is a
testament to the underlying strength and scale of our diversified
real estate portfolio in Central and Eastern Canada. It also reflects the
fundamental resilience of our tenant base, well-diversified by
industry sector," said James Beckerleg, President and CEO,
PROREIT.
"To preserve our balance sheet strength and liquidity position
in the current market environment, PROREIT's Board of Trustees
decided to revise our distribution policy in order to lower both
our payout and debt ratios. This is a prudent approach that we
believe will prove to be an historical opportunity for the use of
our capital. Unitholders should be rewarded going forward as our
stronger profile will enable us to better allocate capital towards
accretive initiatives. This more conservative financial structure
is also likely to attract a broader investor base," added Mr.
Beckerleg.
"We also decided to suspend our DRIP program as we do not think
it is in the best interest of the REIT nor its unitholders to issue
units at current market prices, which have fallen to a significant
discount to NAV in the COVID-19 environment.
We continue to closely monitor the impacts of the current crisis
and remain committed to supporting the health and safety of our
employees, tenants and real estate partners. We will be taking all
the necessary steps to be in a position to execute on new
initiatives once the situation stabilizes," concluded James Beckerleg.
Strong tenant base
PROREIT has an asset base of approximately $635 million and its tenant mix is
well-diversified by industry sector. 87% of the portfolio base rent
is from national and government tenants and the top ten tenants
represent 34.4% of annual base rent. 65% of the base rent in the
retail segment is from tenants providing necessary services to the
public, including groceries, pharmacies, financial institutions,
government offices and medical offices.
April 2020 rent collection
status:
- 92.3% gross rent collections, including government and other
tenants who typically pay at the end of the month, based on
historical collection cycle.
-
- 90.7% industrial tenants;
- 99.5% mixed-use commercial tenants;
- 92.0% office tenants;
- 88.2% retail tenants.
- Temporary rental deferral agreements with 5.1% of gross rent,
the majority of which will be payable in second half of 2020.
- 2.6% of gross rent is in arrears and discussions with tenants
are ongoing and managed on a case-by-case basis.
Distribution policy and DRIP
PROREIT's Board of Trustees has declared a cash distribution of
$0.0375 per trust unit of the
REIT for the month of April 2020, or $0.45 on an annualized basis. This revision to
our monthly distributions, which were previously of $0.0525 per unit, will allow the REIT to retain
approximately $7 million a year based
on the number of units currently outstanding, will strengthen
PROREIT's balance sheet and lower its payout ratio to a more
conservative level. This will allow for a reduction in PROREIT's
leverage and for flexibility in allocating capital to the benefit
of unitholders. The distribution for the month of April 2020 of $0.0375 per trust unit will be payable on
May 15, 2020 to unitholders of
record as at April 30, 2020.
In addition, in response to the current stock market volatility
caused by the COVID-19 pandemic, PROREIT is suspending its
distribution reinvestment plan ("DRIP"), effective immediately. The
DRIP will remain suspended until further notice and distributions
of PROREIT will be paid only in cash. Upon reinstatement of the
DRIP, plan participants enrolled in the DRIP at the time of its
suspension and who remain enrolled at the time of its reinstatement
will automatically resume participation in the DRIP.
Solid cash flow position
PROREIT has a strong balance sheet and adequate liquidity
position. As at April 22, 2020,
PROREIT has $9 million in cash on
hand and $3.5 million available
through its revolving credit facility. No mortgage maturities are
due in 2020 and current debt to gross book value is approximately
59%.
PROREIT has a term loan with an alternative lender to finance
acquisitions and fund deposits on future acquisitions. The
alternative lender has without notice reduced the facility, from
$30 million to $9 million in
April 2020, which is now fully
drawn. Although PROREIT's current cash flow position does not
require further cash from this source, the facility may be replaced
with a new facility lender in the future.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of applicable securities legislation. Forward-looking
statements are based on a number of assumptions and are subject to
a number of risks and uncertainties, many of which are beyond
PROREIT's control, that could cause actual results and events to
differ materially from those that are disclosed in or implied by
such forward-looking statements.
Forward-looking statements contained in this press release
include, without limitation, statements pertaining to PROREIT's
future financial performance, the execution of its growth strategy,
the payment of distributions, the future reinstatement of the DRIP,
and the performance of PROREIT on the financial markets. PROREIT's
objectives and forward-looking statements are based on certain
assumptions, including that (i) PROREIT will receive financing on
favourable terms; (ii) the future level of indebtedness of PROREIT
and its future growth potential will remain consistent with the
REIT's current expectations; (iii) there will be no changes to tax
laws adversely affecting PROREIT's financing capacity or
operations; (iv) the impact of the current economic climate and the
current global financial conditions on PROREIT's operations,
including its financing capacity and asset value, will remain
consistent with PROREIT's current expectations; (v) the performance
of PROREIT's investments in Canada
will proceed on a basis consistent with PROREIT's current
expectations; and (vi) capital markets will provide PROREIT with
readily available access to equity and/or debt.
The forward-looking statements contained in this news release
are expressly qualified in their entirety by this cautionary
statement. All forward-looking statements in this press release are
made as of the date of this press release. PROREIT does not
undertake to update any such forward-looking information whether as
a result of new information, future events or otherwise, except as
required by law.
Additional information about these assumptions and risks and
uncertainties is contained under "Risk Factors" in PROREIT's latest
annual information form, which is available on SEDAR at
www.sedar.com.
About PROREIT
PROREIT (www.proreit.com) is an unincorporated open-ended real
estate investment trust owning a diversified portfolio of 93
commercial properties across Canada representing over 4.5 million square
feet of gross leasable area. Established in March 2013, PROREIT is mainly focused on strong
primary and secondary markets in Québec, Atlantic Canada and Ontario, with selective exposure in
Western Canada.
SOURCE PROREIT