FREDERICTON, NB, Nov. 9, 2021 /CNW/ - Plaza Retail REIT (TSX:
PLZ.UN) ("Plaza" or the "REIT") today announced its financial
results for the three and nine months ended September 30, 2021.
"We are very pleased with our solid performance," said
Michael Zakuta, President and
CEO. "Our portfolio of open-air centres focused on essential
needs retail continues to perform well. Leasing activity and rent
collection are back to pre-pandemic levels. We are progressing with
a number of development projects, and are continuing to pursue
additional development and redevelopment opportunities across our
geography."
Summary of
Selected IFRS Financial Results
|
(CAD$000s, except
percentages)
|
Three
Months
Ended
Sept
30,
2021
|
Three
Months
Ended
Sept
30,
2020
|
$
Change
|
%
Change
|
Nine
Months
Ended
Sept
30,
2021
|
Nine
Months
Ended
Sept
30,
2020
|
$
Change
|
%
Change
|
|
|
|
|
|
|
|
|
|
Property rental
revenue
|
$26,597
|
$25,960
|
$637
|
2.5%
|
$83,249
|
$80,063
|
$3,186
|
4.0%
|
|
|
|
|
|
|
|
|
|
Net operating income
(NOI)
|
$18,079
|
$17,631
|
$448
|
2.5%
|
$54,591
|
$50,613
|
$3,978
|
7.9%
|
|
|
|
|
|
|
|
|
|
Net change in fair
value of investment
properties
|
$16,010
|
($549)
|
$16,559
|
--
|
$28,391
|
($49,060)
|
$77,451
|
--
|
|
|
|
|
|
|
|
|
|
Profit (loss) and
total comprehensive
income
(loss)
|
$27,908
|
$9,185
|
$18,723
|
--
|
$59,754
|
($24,212)
|
$83,966
|
--
|
|
|
|
|
|
|
|
|
|
Quarterly Highlights
- NOI was $18.1
million, up $448 thousand
(2.5%) from the same period in 2020, primarily as a result of
growth in NOI from acquisitions and developments, and lower
operating expenses.
- Profit and total comprehensive income for the
current quarter was $27.9 million
compared to $9.2 million in the prior
year. The increase was mainly due to an increase in the fair value
of investment properties recorded in Q3 2021 as a result of a
decrease in the weighted average capitalization rate in the current
quarter and appraisals obtained, compared to a decrease in fair
value of investment properties recorded in Q3 2020.
Year-To-Date Highlights
- NOI was $54.6
million, up $4.0 million
(7.9%) from the same period in 2020, primarily as a result of
growth in NOI from acquisitions and developments, lower operating
expenses including lower bad debt expense, and lease buyout
revenues.
- Profit and total comprehensive income for the
current year was $59.8 million
compared to a loss of $24.2 million
in the prior year. The increase was mainly due to an increase in
the fair value of investment properties recorded in the current
year as a result of a decrease in the weighted average
capitalization rate and appraisals obtained, compared to a decrease
in fair value of investment properties recorded in the prior
year.
Summary of
Selected Non-IFRS Financial Results(1)
|
(CAD$000s, except
percentages,
units repurchased
and per unit
amounts)
|
Three
Months
Ended
Sept
30,
2021
|
Three
Months
Ended
Sept
30,
2020
|
$
Change
|
%
Change
|
Nine
Months
Ended
Sept
30,
2021
|
Nine
Months
Ended
Sept
30,
2020
|
$
Change
|
%
Change
|
|
|
|
|
|
|
|
|
|
FFO
|
$11,324
|
$9,386
|
$1,938
|
20.6%
|
$33,932
|
$26,441
|
$7,491
|
28.3%
|
FFO per
unit
|
$0.110
|
$0.091
|
$0.019
|
20.9%
|
$0.329
|
$0.257
|
$0.072
|
28.0%
|
FFO payout
ratio
|
63.6%
|
76.8%
|
n/a
|
(17.2%)
|
63.7%
|
81.8%
|
n/a
|
(22.1%)
|
|
|
|
|
|
|
|
|
|
AFFO
|
$9,446
|
$8,387
|
$1,059
|
12.6%
|
$29,280
|
$23,167
|
$5,054
|
26.4%
|
AFFO per
unit
|
$0.092
|
$0.081
|
$0.011
|
13.6%
|
$0.284
|
$0.225
|
$0.059
|
26.2%
|
AFFO payout
ratio
|
76.3%
|
85.9%
|
n/a
|
(11.2%)
|
73.9%
|
93.4%
|
n/a
|
(20.9%)
|
|
|
|
|
|
|
|
|
|
Same-asset
NOI
|
$17,758
|
$17,165
|
$593
|
3.5%
|
$50,860
|
$49,807
|
$1,053
|
2.1%
|
|
|
|
|
|
|
|
|
|
Normal course issuer
bid – units
repurchased
|
7,550
|
8,400
|
n/a
|
n/a
|
22,150
|
388,097
|
n/a
|
n/a
|
|
|
|
|
|
|
|
|
|
Committed occupancy –
including
non-consolidated
investments(2)
|
|
|
|
|
96.2%
|
95.8%
|
n/a
|
0.4%
|
Same-asset committed
occupancy(3)
|
|
|
|
|
96.2%
|
95.6%
|
n/a
|
0.6%
|
|
|
|
|
|
|
|
|
|
(1)
|
Refer to "Non-IFRS
Financial Measures" below for further explanations.
|
(2)
|
Excludes properties
under development.
|
(3)
|
Same-asset committed
occupancy excludes properties under development and
non-consolidated investments.
|
Quarterly Highlights
- FFO & AFFO: For the three months ended September 30, 2021, FFO per unit increased by
$0.019 (20.9%) compared to the prior
year. FFO was impacted by an increase in NOI from same assets
and acquisitions/developments, a decrease in administrative costs
due to lower salary expenses and lower travel costs, a decrease in
finance costs mainly due to lower mortgage interest, partially
offset by a decrease in NOI from property disposals. AFFO per
unit was $0.011 (13.6%) higher than
the prior year due to the changes in FFO noted above along with
higher leasing costs in 2021.
- Same-asset NOI increased by $593 thousand (3.5%) mainly due to higher revenue
in the current quarter.
Excluding the impact of COVID-related bad debt expense and
write-offs, lease buyouts and insurance proceeds:
- FFO and AFFO per unit for the quarter would have been 11%
higher than the prior year.
- Same-asset NOI for the quarter would have been consistent with
the prior year. This measure still includes certain other
impacts of the COVID-19 pandemic on NOI, such as its impact on
occupancy and the timing of re-leasing space in the current
year.
Year-To-Date Highlights
- FFO & AFFO: For the nine months ended September 30, 2021, FFO per unit increased by
$0.072 (28.0%) compared to the prior
year. FFO was impacted by an increase in NOI from same
assets, acquisitions/developments, lower operating expenses
including bad debt, a decrease in administrative costs due to lower
salary expenses and lower travel costs, a decrease in finance costs
mainly due to lower mortgage interest, and lease buyout revenue in
the current year, partially offset by a decrease in NOI from
property disposals. AFFO per unit was $0.059 (26.2%) higher than the prior year due to
the changes in FFO noted above, partially offset by higher leasing
costs and maintenance capital expenditures in 2021. In 2020,
leasing costs and maintenance capital expenditures were lower due
to the pandemic, as leasing activity was curtailed and elective
capital expenditures were deferred. Leasing costs and
maintenance capital expenditures in 2021 are higher due to
additional leasing activity and completion of previously deferred
elective capital expenditures.
- Same-asset NOI increased by $1.1 million (2.1%) mainly due to lower operating
expenses, driven by lower bad debt expense in the current year, as
well as write-offs under the CECRA program in 2020.
Excluding the impact of COVID-related bad debt expense and
write-offs, lease buyouts and insurance proceeds:
- FFO per unit for the year would have been 8% higher than the
prior year, while AFFO per unit for the year would have been 1%
higher than the prior year.
- Same-asset NOI for the year would have been 1% lower than the
prior year. This measure still includes certain other
impacts of the COVID-19 pandemic on NOI, such as its impact on
occupancy and the timing of re-leasing space in the current
year.
COVID-19 Update
Plaza's focus on essential needs and value retail, as well as
our presence in primary and strong secondary markets in
Ontario, Quebec and Atlantic
Canada, has served us well. Plaza's portfolio is
currently fully-open.
Rent collections have improved significantly since Q2 2020, and
rent deferrals and abatements have decreased substantially, as
follows:
|
Q3
2021
|
|
Q2
2021
|
|
Q1
2021
|
|
Q4
2020
|
|
Q3
2020
|
|
Q2
2020
|
Gross rent collected
from tenants
|
99.4%
|
|
99.0%
|
|
99.1%
|
|
99.4%
|
|
95.3%
|
|
89.9%
|
CECRA – Federal and
Quebec Government
contribution
|
-
|
|
-
|
|
-
|
|
-
|
|
2.9%
|
|
4.0%
|
Total collections
including government contributions
under
CECRA
|
99.4%
|
|
99.0%
|
|
99.1%
|
|
99.4%
|
|
98.2%
|
|
93.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
CECRA – 25% Landlord
write-off
|
-
|
|
-
|
|
-
|
|
-
|
|
1.0%
|
|
1.5%
|
Rent
abated
|
-
|
|
0.5%
|
|
0.2%
|
|
0.2%
|
|
0.4%
|
|
2.6%
|
Rent deferred with a
definitive repayment schedule
|
0.2%
|
|
0.4%
|
|
0.4%
|
|
-
|
|
0.2%
|
|
0.8%
|
Remaining tenant
accounts receivable(1)
|
0.4%
|
|
0.1%
|
|
0.3%
|
|
0.4%
|
|
0.2%
|
|
1.2%
|
Totals
|
100.0%
|
|
100.0%
|
|
100.0%
|
|
100.0%
|
|
100.0%
|
|
100.0%
|
(1)
|
Remaining tenant
accounts receivable excludes allowance for doubtful
accounts.
|
For deferred rent that was to be repaid during 2021
year-to-date, Plaza collected 98.8% of same.
Although the operating environment has improved significantly,
and continues to improve, the uncertainty of subsequent waves of
the COVID-19 pandemic may again impact Plaza's business and its
tenants.
Further Information
Information appearing in this
press release is a select summary of results. A more detailed
analysis of the REIT's financial and operating results is included
in the REIT's 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 REIT's website at
www.plaza.ca.
Conference Call
Michael
Zakuta, President and CEO, and Jim Drake, CFO, will
host a conference call for the investment community on Thursday, November 11, 2021 at 1:30 p.m.
EST. The call-in numbers for participants are 416-764-8659 (local
Toronto) or 902-704-0254 (local
Halifax) or 888-664-6392 (toll
free, within North America).
A replay of the call will be available until November 18,
2021. To access the replay, dial 416-764-8677 (local Toronto) or 888-390-0541 (Passcode: 935803).
The audio replay will also be available for download on the REIT's
website for 90 days following the conference call.
About Plaza
Plaza is an open-ended real estate
investment trust and is a leading retail property owner and
developer, focused on Ontario,
Quebec and Atlantic Canada. Plaza's portfolio at
September 30, 2021 includes interests
in 255 properties totaling approximately 8.6 million square feet
across Canada and additional lands
held for development. Plaza's portfolio largely consists of
open-air centres and stand-alone small box retail outlets and is
predominantly occupied by national tenants. For more information,
please visit www.plaza.ca.
Non-IFRS Financial Measures
This press release
contains certain non-IFRS financial measures including FFO, AFFO
and same-asset NOI. These measures are commonly used by entities in
the real estate industry as useful metrics for measuring
performance. However, they do not have any standardized meaning
prescribed by IFRS and are not necessarily comparable to similar
measures presented by other publicly traded entities. These
measures should be considered as supplemental in nature and not as
a substitute for related financial information prepared in
accordance with IFRS. Please refer to the REIT's Management's
Discussion and Analysis for a reconciliation of these non-IFRS
measures to standardized IFRS measures.
Cautionary Statements Regarding Forward-looking
Information
This press release contains forward-looking
statements relating to Plaza's operations, strategy, condition and
the environment in which it operates, including those relating to
Plaza's continued pursuit of development and redevelopment
opportunities and its ability to continue to advance projects.
Forward-looking statements are not future guarantees of
future performance and involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Plaza to be materially different
from any future results, performance or achievements expressed or
implied by forward-looking statements contained in this press
release, including but not limited to general economic and market
factors, the duration and full impacts of COVID-19, and those
described in Plaza's Annual Information Form for the year ended
December 31, 2020 and Management's
Discussion and Analysis for the quarter ended September 30, 2021 which can be obtained on SEDAR
at www.sedar.com. Forward-looking statements are based on a number
of expectations and assumptions made in light of management's
experience and perceptions of historical trends and current
conditions, including that development and redevelopment
opportunities continue to be available and can be completed within
reasonable timeframes and at reasonable costs, and that tenant
demand for space in such projects continues. Although based
upon information currently available to management and what
management believes are reasonable expectations and assumptions,
there can be no assurances that forward-looking statements will
prove to be accurate. Readers, therefore, should not place undue
reliance on any forward-looking statements. Plaza undertakes no
obligation to publicly update any such statements, except as
required by law. These cautionary statements qualify all
forward-looking statements contained in this press release.
SOURCE Plaza Retail REIT