SmartCentres Real Estate Investment Trust (“SmartCentres” or the
“Trust”) (TSX: SRU.UN) is pleased to report its financial and
operating results for the quarter ended June 30, 2024.
“Building on Q1, we are pleased to report strong
continued momentum in leasing demand and lease deals executed for
space in Q2”, said Mitchell Goldhar, CEO of SmartCentres.
“Occupancy has improved by 50 basis points to 98.2% with
approximately 272,000 square feet of vacant space leased during the
quarter and rent growth of 8.5% (excluding anchors). The Millway,
our purpose-built rental project in the VMC continues to experience
strong leasing momentum with occupancy at 88% by the end of the
quarter, 90% currently, and expected to exceed 95% by
year-end, all at average rental rates above our original budget.
Our mixed-use development pipeline continues to add to the
bottom-line with the completion this quarter of our self-storage
project in Markham and the closing of 25 townhomes at our Vaughan
NW project. Subsequent to quarter end, we also raised $350 million
via a debenture issuance to repay our upcoming $100 million
debenture maturity and outstanding floating rate debt on our
operating lines, on an accretive basis, and extended the debt
ladder maturity.”
2024 Second Quarter
Highlights
Operations
-
Same Properties NOI excluding Anchors(1) for the three months ended
June 30, 2024 increased by 2.2% and for the six months ending June
30, 2024 increased by 3.0% (1.3% and 1.9% respectively, including
anchors) compared to the same period in 2023. The increase was
driven by lease-up activities and lease extensions at improved
rental rates.
-
Strong leasing momentum continued with approximately 272,000 square
feet of vacant space leased in the quarter resulting in an in-place
and committed occupancy rate of 98.2%, an improvement of 50 basis
points compared to the prior quarter.
-
Renewed and extended 86.2% of all space maturing in 2024, with
strong rent growth of 8.5% (excluding anchors).
Development
-
Our significant development pipeline will provide constant
portfolio expansion and decades of profitable growth from the
approximately 57.5 million square feet (at the Trust’s share) of
zoned mixed-use development permissions, including 0.8 million
square feet of sites currently under construction.
-
The Millway, a 458-unit purpose-built rental located in VMC, was
completed in Q4 2023. Leasing activity is on track with 88% of the
units leased and committed by quarter-end at average rental rates
above budget. Leased and reserved units are expected to exceed 95%
by year-end from continuing strong leasing momentum.
-
Siteworks for the 224,000 square foot Canadian Tire and ancillary
retail units project on Laird Drive in Toronto continues, and
possession is expected in approximately 20 months.
-
Construction of Phase I of the Vaughan NW townhomes is well
underway, with 25 units completed and closed in Q2 2024, and
approximately 83% of the Phase I townhomes have been pre-sold.
-
Self-storage facility in Markham opened in May 2024. This portfolio
has now increased to ten operating facilities with four additional
sites currently under construction.
Financial
-
Net rental income and other increased by $3.3 million or 2.6% for
the three months ended June 30, 2024 compared to the same period in
2023, mainly attributable to the increase in base rent resulting
from lease-up activities and rental renewals with higher
rates.
-
FFO per Unit for the three months ended June 30, 2024 was $0.50
compared to $0.55 for the same period in 2023. This decline is
primarily due to condo closings in the prior year which is not
reflected this year, an increase in net interest expense due to
higher interest rates and lower capitalization due to completion of
development projects, partially offset by an increase in fair value
adjustment on the TRS resulting from fluctuations in the Trust’s
Unit price. FFO per Unit with adjustments for the three months
ended June 30, 2024 was $0.51 compared to $0.54 for the same period
in 2023. The decrease was primarily due to an increase in net
interest expense due to higher interest rates and lower interest
capitalization.
-
Net income and comprehensive income per Unit was $0.71 for the
three months ended June 30, 2024 (three months ended June 30, 2023
– $0.93). The decrease was primarily due to a loss in the fair
value adjustment on financial instruments related to the
mark-to-market on interest rate swap agreements and unit price
change in units classified as liabilities, as well as higher net
interest expense related to higher interest rates and lower
interest capitalization due to completed development projects.
-
In June 2024, the Trust renewed and amended its $500 million
unsecured revolving operating facility. The amendment increased the
facility amount from $500 million to $750 million and extended the
maturity from March 2028 to June 2029.
-
Subsequent to the quarter, the Trust closed an offering of $350
million principal amount of Series AA senior unsecured debentures
by way of a private placement (the “Series AA Debentures”). The
Series AA Debentures bear interest at a rate of 5.162% per annum,
with a maturity date of August 1, 2030. The Trust intends to use
the net proceeds of the offering to refinance existing debt,
including the repayment of its $100 million Series O senior
unsecured debentures due August 28, 2024, and for general corporate
purposes.
(1) Represents a non-GAAP measure. The Trust’s
method of calculating non-GAAP measures may differ from other
reporting issuers’ methods and, accordingly, may not be comparable.
For additional information, please see “Non-GAAP Measures” in this
Press Release.
|
Selected Consolidated
Operational, Mixed-Use Development and Financial
Information(in thousands of dollars,
except per Unit and other non-financial data) |
| As
at |
|
June 30, 2024 |
December 31, 2023 |
June 30, 2023 |
|
Portfolio Information (Number of properties) |
|
|
|
|
| Retail properties |
|
|
155 |
|
|
155 |
|
|
155 |
|
| Office properties |
|
|
4 |
|
|
4 |
|
|
4 |
|
| Self-storage properties |
|
|
10 |
|
|
8 |
|
|
8 |
|
| Residential properties |
|
|
3 |
|
|
3 |
|
|
2 |
|
| Industrial properties |
|
|
1 |
|
|
1 |
|
|
— |
|
|
Properties under development |
|
|
22 |
|
|
20 |
|
|
20 |
|
|
Total number of properties with an ownership interest |
|
|
195 |
|
|
191 |
|
|
189 |
|
|
Leasing and Operational
Information(1) |
|
|
|
|
| Gross leasable retail, office
and industrial area (in thousands of sq. ft.) |
|
|
35,199 |
|
|
35,045 |
|
|
34,922 |
|
| In-place and committed
occupancy rate |
|
|
98.2 |
% |
|
98.5 |
% |
|
98.2 |
% |
| Average lease term to maturity
(in years) |
|
|
4.3 |
|
|
4.3 |
|
|
4.2 |
|
|
In-place net retail rental rate excluding Anchors (per occupied sq.
ft.) |
|
$ |
23.14 |
|
$ |
22.59 |
|
$ |
22.27 |
|
|
Financial Information |
|
|
|
|
| Investment properties(2) |
|
|
10,556,877 |
|
|
10,564,269 |
|
|
10,419,239 |
|
| Total unencumbered
assets(3) |
|
|
9,309,221 |
|
|
9,170,121 |
|
|
8,844,821 |
|
| Debt to Aggregate
Assets(3)(4)(5) |
|
|
43.7 |
% |
|
43.1 |
% |
|
43.2 |
% |
| Adjusted Debt to Adjusted
EBITDA(3)(4)(5) |
|
9.9X |
9.6X |
9.9X |
| Weighted average interest
rate(3)(4) |
|
|
4.25 |
% |
|
4.15 |
% |
|
4.03 |
% |
| Weighted average term of debt
(in years) |
|
|
3.1 |
|
|
3.6 |
|
|
4.1 |
|
| Interest coverage
ratio(3)(4) |
|
2.5X |
2.7X |
2.8X |
|
|
|
|
|
|
|
|
Three Months Ended June 30 |
Six Months Ended June 30 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Financial Information |
|
|
|
|
| Rentals from investment
properties and other(2) |
228,051 |
|
|
206,950 |
|
|
445,290 |
|
|
417,544 |
|
| Net income and comprehensive
income (2) |
128,916 |
|
|
167,902 |
|
|
107,741 |
|
|
280,763 |
|
| FFO(3)(4)(6) |
90,780 |
|
|
98,534 |
|
|
177,737 |
|
|
195,667 |
|
| AFFO(3)(4)(6) |
83,386 |
|
|
87,848 |
|
|
164,773 |
|
|
176,449 |
|
| Cash flows provided by
operating activities(2) |
76,991 |
|
|
61,322 |
|
|
146,710 |
|
|
143,253 |
|
| Net rental income and
other(2) |
133,222 |
|
|
129,887 |
|
|
263,950 |
|
|
254,708 |
|
| NOI(3)(4) |
139,062 |
|
|
147,105 |
|
|
275,137 |
|
|
280,573 |
|
| Change in SPNOI(3)(4) |
1.3 |
% |
|
3.2 |
% |
|
1.9 |
% |
|
3.7 |
% |
| Change in SPNOI excluding
Anchors(3)(4) |
2.2 |
% |
|
5.4 |
% |
|
3.0 |
% |
|
6.4 |
% |
| Weighted average number of
units outstanding – diluted(7) |
180,664,749 |
|
|
180,045,789 |
|
|
180,472,496 |
|
|
179,968,836 |
|
| Net income and comprehensive
income per Unit(2) |
$0.72/$0.71 |
$0.94/$0.93 |
$0.60/$0.60 |
$1.58/$1.56 |
| FFO per Unit(3)(4)(6) |
$0.51/$0.50 |
$0.55/$0.55 |
$1.00/$0.98 |
$1.10/$1.09 |
| FFO with adjustments per
Unit(3)(4) |
$0.52/$0.51 |
$0.55/$0.54 |
$1.04/$1.03 |
$1.06/$1.05 |
| AFFO per Unit(3)(4)(6) |
$0.47/$0.46 |
$0.49/$0.49 |
$0.92/$0.91 |
$0.99/$0.98 |
| AFFO with adjustments per
Unit(3)(4) |
$0.48/$0.47 |
$0.49/$0.48 |
$0.97/$0.96 |
$0.95/$0.94 |
| Payout Ratio to
AFFO(3)(4)(6) |
98.8 |
% |
|
93.8 |
% |
|
100.0 |
% |
|
93.4 |
% |
| Payout Ratio to AFFO with
adjustments(3)(4) |
96.9 |
% |
|
95.2 |
% |
|
95.6 |
% |
|
97.5 |
% |
| Payout
Ratio to cash flows provided by operating activities |
107.0 |
% |
|
134.4 |
% |
|
112.3 |
% |
|
115.1 |
% |
(1) Excluding residential and
self-storage area.(2) Represents a Generally
Accepted Accounting Principles (“GAAP”)
measure.(3) Represents a non-GAAP measure. The
Trust’s method of calculating non-GAAP measures may differ from
other reporting issuers’ methods and, accordingly, may not be
comparable. For additional information, please see “Non-GAAP
Measures” in this Press Release.(4) Includes the
Trust’s proportionate share of equity accounted investments.
(5) As at June 30, 2024, cash-on-hand of
$43.4 million was excluded for the purposes of calculating the
applicable ratios (December 31, 2023 – $31.4 million,
June 30, 2023 – $43.3 million).(6) The
calculation of the Trust’s FFO and AFFO and related payout ratios,
including comparative amounts, are financial metrics that were
determined based on the REALpac White Paper on FFO and AFFO issued
in January 2022 (“REALpac White Paper”). Comparison with other
reporting issuers may not be appropriate. The payout ratio to AFFO
is calculated as declared distributions divided by AFFO.
(7) The diluted weighted average includes the
vested portion of the deferred issued pursuant to the deferred unit
plan and vested EIPs granted pursuant to the equity incentive
plan.
Development and Intensification
Summary
The following table provides additional details
on the Trust’s 9 development initiatives that are currently under
construction or where initial siteworks have begun (in order of
estimated initial occupancy/closing date):
|
Projects under construction (Location/Project
Name) |
Type |
Trust’s share |
Actual / estimated initial occupancy / closing
date |
% of capital spend |
GFA(1) (sq.
ft.) |
No. of units |
|
|
|
|
|
|
|
|
| Mixed-use
Developments |
|
|
|
|
|
|
|
Vaughan NW |
Townhomes |
50 |
% |
Q1 2024 |
55 |
% |
366,000 |
174 |
|
Stoney Creek Self-Storage |
Self-Storage |
50 |
% |
Q4 2024 |
69 |
% |
138,000 |
973 |
|
Toronto (Gilbert Ave.) Self-Storage |
Self-Storage |
50 |
% |
Q1 2025 |
62 |
% |
177,000 |
1,540 |
|
Dorval (St-Regis Blvd.) Self-Storage |
Self-Storage |
50 |
% |
Q2 2025 |
46 |
% |
164,000 |
1,165 |
|
Toronto (Jane St.) Self-Storage |
Self-Storage |
50 |
% |
Q3 2025 |
56 |
% |
143,000 |
1,404 |
|
Ottawa SW(2) |
Retirement Residence |
50 |
% |
Q2 2026 |
29 |
% |
376,000 |
402 |
|
Ottawa SW(2) |
Seniors’ Apartments |
|
Vaughan / ArtWalk (40-Storey) |
Condo |
50 |
% |
Q2 2027 |
33 |
% |
320,000 |
373 |
|
Total Mixed-use Developments |
|
|
|
|
1,684,000 |
6,031 |
|
Retail Development |
|
|
|
|
|
|
|
Toronto (Laird) |
Retail |
50 |
% |
Q2 2026 |
25 |
% |
224,000 |
— |
|
|
|
|
|
|
|
|
(1) GFA represents Gross Floor
Area.(2) Figure represents capital spend of both
retirement residence and seniors’ apartments projects.
Reconciliations of Non-GAAP
Measures
The following tables reconcile the non-GAAP
measures to the most comparable GAAP measures for the three and six
months ended June 30, 2024, and the comparable period in 2023.
Such measures do not have a standardized meaning prescribed by IFRS
and may not be comparable to similar measures disclosed by other
issuers.
| Net
Operating Income (including the Trust’s Interests in Equity
Accounted Investments) |
| (in
thousands of dollars) |
Three Months Ended June 30, 2024 |
Three Months Ended June 30, 2023 |
|
|
GAAP Basis |
Proportionate Share Reconciliation |
Total Proportionate Share(1) |
GAAP Basis |
Proportionate Share Reconciliation |
Total Proportionate Share(1) |
|
Net rental income and other |
|
|
|
|
|
|
|
Rentals from investment properties and other |
$ |
211,381 |
|
$ |
11,272 |
|
$ |
222,653 |
|
$ |
206,950 |
|
$ |
8,469 |
|
$ |
215,419 |
|
|
Property operating costs and other |
|
(80,468 |
) |
|
(5,427 |
) |
|
(85,895 |
) |
|
(75,400 |
) |
|
(4,146 |
) |
|
(79,546 |
) |
|
|
$ |
130,913 |
|
$ |
5,845 |
|
$ |
136,758 |
|
$ |
131,550 |
|
$ |
4,323 |
|
$ |
135,873 |
|
|
Residential sales revenue and other(2) |
|
16,670 |
|
|
37 |
|
|
16,707 |
|
|
— |
|
|
62,634 |
|
|
62,634 |
|
|
Residential cost of sales and other |
|
(14,361 |
) |
|
(42 |
) |
|
(14,403 |
) |
|
(1,663 |
) |
|
(49,739 |
) |
|
(51,402 |
) |
|
|
$ |
2,309 |
|
$ |
(5 |
) |
$ |
2,304 |
|
$ |
(1,663 |
) |
$ |
12,895 |
|
$ |
11,232 |
|
|
NOI |
$ |
133,222 |
|
$ |
5,840 |
|
$ |
139,062 |
|
$ |
129,887 |
|
$ |
17,218 |
|
$ |
147,105 |
|
| (in
thousands of dollars) |
Six Months Ended June 30, 2024 |
Six Months Ended June 30, 2023 |
|
|
GAAP Basis |
Proportionate Share Reconciliation |
Total Proportionate Share(1) |
GAAP Basis |
Proportionate Share Reconciliation |
Total Proportionate Share(1) |
|
Net rental income and other |
|
|
|
|
|
|
|
Rentals from investment properties and other |
$ |
427,018 |
|
$ |
22,194 |
|
$ |
449,212 |
|
$ |
417,544 |
|
$ |
16,525 |
|
$ |
434,069 |
|
|
Property operating costs and other |
|
(165,621 |
) |
|
(10,885 |
) |
|
(176,506 |
) |
|
(160,523 |
) |
|
(8,283 |
) |
|
(168,806 |
) |
|
|
$ |
261,397 |
|
$ |
11,309 |
|
$ |
272,706 |
|
$ |
257,021 |
|
$ |
8,242 |
|
$ |
265,263 |
|
|
Residential sales revenue and other(2) |
|
18,272 |
|
|
66 |
|
|
18,338 |
|
|
— |
|
|
87,467 |
|
|
87,467 |
|
|
Residential cost of sales and other |
|
(15,719 |
) |
|
(188 |
) |
|
(15,907 |
) |
|
(2,313 |
) |
|
(69,844 |
) |
|
(72,157 |
) |
|
|
$ |
2,553 |
|
$ |
(122 |
) |
$ |
2,431 |
|
$ |
(2,313 |
) |
$ |
17,623 |
|
$ |
15,310 |
|
|
NOI |
$ |
263,950 |
|
$ |
11,187 |
|
$ |
275,137 |
|
$ |
254,708 |
|
$ |
25,865 |
|
$ |
280,573 |
|
(1) This column contains
non-GAAP measures because it includes figures that are recorded in
equity accounted investments. The Trust’s method of calculating
non-GAAP measures may differ from other reporting issuers’ methods
and, accordingly, may not be comparable. For additional
information, please see “Non-GAAP Measures” in this Press
Release.(2) Includes additional partnership profit
and other revenues.
Same Properties NOI
| |
Three Months Ended June 30 |
Six Months Ended June 30 |
|
(in thousands of dollars) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Net rental income and other |
$ |
133,222 |
|
$ |
129,887 |
|
$ |
263,950 |
|
$ |
254,708 |
|
| NOI
from equity accounted investments(1) |
|
5,840 |
|
|
17,218 |
|
|
11,187 |
|
|
25,865 |
|
|
Total portfolio NOI before adjustments(1) |
$ |
139,062 |
|
$ |
147,105 |
|
$ |
275,137 |
|
$ |
280,573 |
|
| Adjustments: |
|
|
|
|
|
Lease termination |
|
(592 |
) |
|
(49 |
) |
|
(592 |
) |
|
(461 |
) |
|
Net profit on condo and townhome closings |
|
(2,304 |
) |
|
(11,232 |
) |
|
(2,431 |
) |
|
(15,310 |
) |
|
Non-recurring items and other adjustments(2) |
|
1,663 |
|
|
(1,328 |
) |
|
2,592 |
|
|
2,078 |
|
|
Total portfolio NOI after adjustments(1) |
$ |
137,829 |
|
$ |
134,496 |
|
$ |
274,706 |
|
$ |
266,880 |
|
|
NOI sourced from acquisitions, dispositions, Earnouts and
developments |
|
(2,319 |
) |
|
(761 |
) |
|
(4,103 |
) |
|
(1,241 |
) |
|
Same Properties NOI(1) |
$ |
135,510 |
|
$ |
133,735 |
|
$ |
270,603 |
|
$ |
265,639 |
|
(1) Represents a non-GAAP
measure. The Trust’s method of calculating non-GAAP measures may
differ from other reporting issuers’ methods and, accordingly, may
not be comparable.For additional information, please see “Non-GAAP
Measures” in this Press Release. (2) Includes
non-recurring items such as one-time adjustments relating to
royalties, straight-line rent and amortization of tenant
incentives.
Reconciliation of FFO
| |
Three Months Ended June 30 |
Six Months Ended June 30 |
|
(in thousands of dollars) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Net income and comprehensive income |
$ |
128,916 |
|
$ |
167,902 |
|
$ |
107,741 |
|
$ |
280,763 |
|
| Add (deduct): |
|
|
|
|
|
Fair value adjustment on investment properties and financial
instruments(1) |
|
(34,665 |
) |
|
(68,918 |
) |
|
63,837 |
|
|
(90,926 |
) |
|
Loss on derivative – TRS |
|
(3,994 |
) |
|
(9,333 |
) |
|
(10,143 |
) |
|
(8,037 |
) |
|
Loss on sale of investment properties |
|
— |
|
|
45 |
|
|
142 |
|
|
23 |
|
|
Amortization of intangible assets and tenant improvement
allowance |
|
2,257 |
|
|
2,250 |
|
|
4,437 |
|
|
4,645 |
|
|
Distributions on Units classified as liabilities and vested
deferred units and EIP |
|
4,778 |
|
|
2,145 |
|
|
9,374 |
|
|
4,149 |
|
|
Salaries and related costs attributed to leasing activities(2) |
|
2,301 |
|
|
1,954 |
|
|
4,708 |
|
|
4,034 |
|
|
Adjustments relating to equity accounted investments(3) |
|
(8,813 |
) |
|
2,489 |
|
|
(2,359 |
) |
|
1,016 |
|
|
FFO(4) |
$ |
90,780 |
|
$ |
98,534 |
|
$ |
177,737 |
|
$ |
195,667 |
|
| Add (deduct) non-recurring
adjustments: |
|
|
|
|
|
Loss on derivative – TRS |
|
3,994 |
|
|
9,333 |
|
|
10,143 |
|
|
8,037 |
|
|
FFO sourced from condo and townhome closings |
|
(2,353 |
) |
|
(10,620 |
) |
|
(2,553 |
) |
|
(14,436 |
) |
|
Transactional FFO – loss on sale of land to co-owner |
|
— |
|
|
— |
|
|
— |
|
|
(1,008 |
) |
|
FFO with adjustments(4) |
$ |
92,421 |
|
$ |
97,247 |
|
$ |
185,327 |
|
$ |
188,260 |
|
(1) Includes fair value
adjustments on investment properties and financial instruments.
Fair value adjustment on investment properties is described in
“Investment Properties” in the Trust’s MD&A. Fair value
adjustment on financial instruments comprises the following
financial instruments: units classified as liabilities, Deferred
Unit Plan (“DUP”), Equity Incentive Plan (“EIP”), TRS, and interest
rate swap agreements. The significant assumptions made in
determining the fair value are more thoroughly described in the
Trust’s unaudited interim condensed consolidated financial
statements for the three and six months ended June 30, 2024.
For details, please see discussion in “Results of Operations”
section in this MD&A.(2) Salaries and related
costs attributed to leasing activities of $4.7 million were
incurred in the six months ended June 30, 2024 (six months
ended June 30, 2023 – $4.0 million) and were eligible to be
added back to FFO based on the definition of FFO, in the REALpac
White Paper, which provided for an adjustment to incremental
leasing expenses for the cost of salaried staff. This adjustment to
FFO results in more comparability between Canadian publicly traded
real estate entities that expensed their internal leasing
departments and those that capitalized external leasing expenses.
(3) Includes tenant improvement amortization,
indirect interest with respect to the development portion, fair
value adjustment on investment properties, loss (gain) on sale of
investment properties, and adjustment for supplemental
costs.(4) Represents a non-GAAP measure. The
Trust’s method of calculating non-GAAP measures may differ from
other reporting issuers’ methods and, accordingly, may not be
comparable. For definitions and basis of presentation of the
Trust’s non-GAAP measures, refer to “Presentation of Certain Terms
Including Non-GAAP Measures” and “Non-GAAP Measures” in this
MD&A.
Reconciliation of AFFO
| |
Three Months Ended June 30 |
Six Months Ended June 30 |
|
(in thousands of dollars) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
FFO(1) |
$ |
90,780 |
|
$ |
98,534 |
|
$ |
177,737 |
|
$ |
195,667 |
|
|
Add (Deduct): |
|
|
|
|
|
Straight-line rents |
|
(963 |
) |
|
149 |
|
|
(1,700 |
) |
|
199 |
|
|
Adjusted salaries and related costs attributed to leasing |
|
(2,301 |
) |
|
(1,954 |
) |
|
(4,708 |
) |
|
(4,034 |
) |
|
Capital expenditures, leasing commissions, and tenant
improvements(2)(3) |
|
(4,130 |
) |
|
(8,881 |
) |
|
(6,556 |
) |
|
(15,383 |
) |
|
AFFO(1) |
$ |
83,386 |
|
$ |
87,848 |
|
$ |
164,773 |
|
$ |
176,449 |
|
| Add (deduct) non-recurring
adjustments: |
|
|
|
|
|
Loss on derivative – TRS |
|
3,994 |
|
|
9,333 |
|
|
10,143 |
|
|
8,037 |
|
|
FFO sourced from condo and townhome closings |
|
(2,353 |
) |
|
(10,620 |
) |
|
(2,553 |
) |
|
(14,436 |
) |
|
Transactional FFO – loss on sale of land to co-owner |
|
— |
|
|
— |
|
|
— |
|
|
(1,008 |
) |
|
AFFO with adjustments(1) |
$ |
85,027 |
|
$ |
86,561 |
|
$ |
172,363 |
|
$ |
169,042 |
|
(1) Represents a non-GAAP
measure. The Trust’s method of calculating non-GAAP measures may
differ from other reporting issuers’ methods and, accordingly, may
not be comparable. For additional information, please see “Non-GAAP
Measures” in this Press Release.(2) Please see the
“Maintenance Capital Requirements” section in the Trust’s MD&A
for details of actual capital expenditures, actual leasing
commissions and actual tenant
improvements.(3) Balance as of June 30, 2024
includes capital expenditures, leasing commissions, and tenant
improvements related to equity accounted investments of $0.4
million.
Adjusted EBITDAThe following
table presents a reconciliation of net income and comprehensive
income to Adjusted EBITDA:
| |
Rolling 12 Months Ended |
| (in
thousands of dollars) |
June 30, 2024 |
June 30, 2023 |
|
Net income and comprehensive income |
$ |
337,080 |
$ |
384,681 |
|
| Add (deduct) the following
items: |
|
|
| Net interest expense |
|
176,559 |
|
146,908 |
|
| Amortization of equipment,
intangible assets and tenant improvements |
|
11,659 |
|
11,622 |
|
| Fair value adjustments on
investment properties and financial instruments |
|
3,422 |
|
(35,274 |
) |
| Adjustment for supplemental
costs |
|
4,115 |
|
4,899 |
|
| Loss (gain) on sale of
investment properties |
|
75 |
|
(156 |
) |
|
Acquisition-related costs |
|
— |
|
(24 |
) |
|
Adjusted EBITDA(1) |
$ |
532,910 |
$ |
512,656 |
|
(1) Represents a non-GAAP
measure. The Trust’s method of calculating non-GAAP measures may
differ from other reporting issuers’ methods and, accordingly, may
not be comparable. For additional information, please see “Non-GAAP
Measures” in this Press Release.
Conference Call
Management will hold a conference call on
Friday, August 9, 2024 at 11:00 a.m. (ET).
Interested parties are invited to access the
call by dialing 1-855-353-9183 and then keying in the participant
access code 75488#.
A recording of this call will be made available
Friday, August 9, 2024 through to Friday, August 16,
2024. To access the recording, please call 1-855-201-2300, enter
the conference access code 75488# and then key in the playback
access code 0114493#.
About SmartCentres
SmartCentres is one of Canada’s largest fully
integrated REITs, with a best-in-class and growing mixed-use
portfolio featuring 195 strategically located properties in
communities across the country. SmartCentres has approximately
$12.0 billion in assets and owns 35.2 million square feet of
income producing value-oriented retail and first-class office
properties with 98.2% in place and committed occupancy, on 3,500
acres of owned land across Canada.
Non-GAAP
Measures
The non-GAAP measures used in this Press
Release, including but not limited to, AFFO, AFFO with adjustments,
AFFO per Unit, AFFO with adjustments per Unit, Payout Ratio to
AFFO, Payout Ratio to AFFO with adjustments, Unencumbered Assets,
NOI, Debt to Aggregate Assets, Interest Coverage Ratio, Adjusted
Debt to Adjusted EBITDA, Unsecured/Secured Debt Ratio, FFO, FFO
with adjustments, FFO per Unit, FFO with adjustments per Unit, Same
Properties NOI, Same Properties NOI excluding Anchors, Debt to
Gross Book Value, Weighted Average Interest Rate, Transactional
FFO, and Total Proportionate Share, do not have any standardized
meaning prescribed by International Financial Reporting Standards
(“IFRS”) and are therefore unlikely to be comparable to similar
measures presented by other issuers. Additional information
regarding these non-GAAP measures is available in the Management’s
Discussion and Analysis of the Trust for the three and six months
ended June 30, 2024, dated August 8, 2024 (the
“MD&A), and is incorporated by reference. The information is
found in the “Presentation of Certain Terms Including Non-GAAP
Measures” and “Non-GAAP Measures” sections of the MD&A, which
is available on SEDAR+ at www.sedarplus.ca. Reconciliations of
non-GAAP financial measures to the most directly comparable IFRS
measures are found in “Reconciliations of Non-GAAP Measures” of
this Press Release.
Full reports of the financial results of the
Trust for the three and six months ended June 30, 2024 are
outlined in the unaudited interim condensed consolidated financial
statements and the related MD&A of the Trust for the three and
six months ended June 30, 2024, which are available on SEDAR+
at www.sedarplus.ca.
Cautionary Statements Regarding Forward-looking
Statements
Certain statements in this Press Release are
"forward-looking statements" that reflect management's expectations
regarding the Trust's future growth, results of operations,
performance and business prospects and opportunities. More
specifically, certain statements including, but not limited to,
statements related to SmartCentres’ expectations relating to cash
collections, SmartCentres’ expected or planned development plans
and joint venture projects, including the described type, scope,
costs and other financial metrics and the expected timing of
construction and condominium closings and statements that contain
words such as "could", "should", "can", "anticipate", "expect",
"believe", "will", "may" and similar expressions and statements
relating to matters that are not historical facts, constitute
"forward-looking statements". These forward-looking statements are
presented for the purpose of assisting the Trust's Unitholders and
financial analysts in understanding the Trust's operating
environment and may not be appropriate for other purposes. Such
forward-looking statements reflect management's current beliefs and
are based on information currently available to management.
However, such forward-looking statements involve
significant risks and uncertainties. A number of factors could
cause actual results to differ materially from the results
discussed in the forward-looking statements, including risks
associated with potential acquisitions not being completed or not
being completed on the contemplated terms, public health crises,
real property ownership and development, debt and equity financing
for development, interest and financing costs, construction and
development risks, and the ability to obtain commercial and
municipal consents for development. These risks and others are more
fully discussed under the heading “Risks and Uncertainties” and
elsewhere in SmartCentres’ most recent Management’s Discussion and
Analysis, as well as under the heading “Risk Factors” in
SmartCentres’ most recent annual information form. Although the
forward-looking statements contained in this Press Release are
based on what management believes to be reasonable assumptions,
SmartCentres cannot assure investors that actual results will be
consistent with these forward-looking statements. The
forward-looking statements contained herein are expressly qualified
in their entirety by this cautionary statement. These
forward-looking statements are made as at the date of this Press
Release and SmartCentres assumes no obligation to update or revise
them to reflect new events or circumstances unless otherwise
required by applicable securities legislation.
Material factors or assumptions that were
applied in drawing a conclusion or making an estimate set out in
the forward-looking information may include, but are not limited
to: a stable retail environment; a continuing trend toward land use
intensification, including residential development in urban markets
and continued growth along transportation nodes; access to equity
and debt capital markets to fund, at acceptable costs, future
capital requirements and to enable our refinancing of debts as they
mature; that requisite consents for development will be obtained in
the ordinary course, construction and permitting costs consistent
with the past year and recent inflation trends.
Contact
For information, visit www.smartcentres.com or please
contact:
Mitchell Goldhar
Executive
Chairman and CEO
(905) 326-6400 ext. 7674
mgoldhar@smartcentres.com
Peter SlanChief Financial Officer(905) 326-6400
ext. 7571pslan@smartcentres.com
