2021 FOURTH QUARTER AND FULL YEAR - HIGHLIGHTS
- FFO1 per unit of
$0.17 for the quarter compared to$0.28 for the same period in 2020 and$0.98 for 2021 compared to$0.96 for 2020. Excluding$17.8 million of consulting fees spent on the strategic review process and Sears Canada$2.7 million settlement, FFO adjusted per unit was$1.06 for 2021. FFO per unit includes the positive impact of a partial reversal of last year credit losses provisions in the amount of$8.6 million - AFFO1 per unit of
$0.07 for the quarter compared to$0.24 for the same period in 2020 and$0.63 for 2021 compared to$0.71 for 2020. Excluding$17.8 million of consulting fees spent on the strategic review process and Sears Canada$2.7 million settlement, AFFO adjusted per unit was$0.71 for 2021. AFFO per unit includes the positive impact of a partial reversal of last last year credit losses provisions in the amount of$8.6 million - AFFO payout ratio1 of 42.9% for 2021 compared to 80.3% for 2020
- Same property NOI1 increase of 2.9% for 2021 and decrease of 7.8% for the quarter, including a decrease of (22.5)% for the office segment, a decrease of 3.6% for the retail segment and an increase of 10.0% for the industrial and flex segment
- Expected credit losses of
$3.6 million or 0.6% of operating revenues for 2021, mainly due to partial reversals of prior year provisions of$(8.6) million - Investment properties negative change in fair value of
$(370.7) million for 2021 on a proportionate basis1 and$(233.7) million for the fourth quarter of 2021 - In-place occupancy rate was stable at 91.7% as at
December 31, 2021 compared toDecember 31, 2020 - New and renewal leasing represented 106.8% of 2021 lease maturities
- Growth in the average net rent of renewed leases during 2021 stood at 7.5%, driven by a 22.4% increase in the industrial segment, a 7.0% increase in the office segment and a (2.1)% decrease in the retail segment
- As at
December 31, 2021 , available liquidity of$74.9 million consisted of$67.3 million of availability under our credit facilities and$7.6 million of cash and cash equivalents - Debt ratio was 56.9% as at
December 31, 2021 , up from 55.3% as atDecember 31, 2020
"Despite the continuing challenges brought by the pandemic on the real estate industry in our markets, Cominar's operating and financial results further have improved in 2021 with a strong growth in the average net rent of renewed leases of 7.5% for our portfolio, coupled with new and renewal leasing representing 106.8% of 2021 lease maturities" said
"Operating results have pursued their recovery despite the challenges brought by the pandemic on the real estate industry, as evidenced by the SPNOI growth of 2.9% in 2021 compared to 2020. Expected credit losses further reduced to 0.6% of operating revenues in 2021" stated Antoine Tronquoy, Executive Vice-President and Chief Financial Officer.
FINANCIAL AND OPERATING HIGHLIGHTS
Net Loss : Net loss for the year ended December 31, 2021 amounted to
Same Property NOI1 ("SPNOI"): SPNOI increased by
Expected credit losses: For the year ended
FFO1: FFO for the year ended
AFFO1: AFFO for the year ended
Investment properties fair value: During 2021, management revalued the entire real estate portfolio and determined that a net decrease of
Occupancy: As at
Leasing activity: The retention rate for 2021 was 74.1% at the end of 2021. Average net rent on 4.0 million square feet of lease renewals for the year ending
BALANCE SHEET AND LIQUIDITY HIGHLIGHTS
Debt ratio: The debt ratio was 56.9% as at
Debt to EBITDA1 : As at
Unencumbered asset to unsecured debt ratio: As at
Secured debt to gross book value: Was 40.7% as at
As at
INVESTMENT HIGHLIGHTS
For the year ended
STRATEGIC REVIEW PROCESS
On
Under the terms of the Arrangement Agreement, the Purchaser will acquire, for a consideration of
NON-IFRS AND OTHER FINANCIAL MEASURES
Cominar's consolidated 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) 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 management's discussion and analysis for the fourth quarter and year ended
RESULTS OF OPERATIONS
Year | Year | ||||
Periods ended | 2021 ¹ | 2020 ¹ | 2021 ² | 2020 ² | |
$ | $ | $ | $ | ||
Operating revenues | 162,911 | 166,156 | 658,594 | 661,320 | |
Operating expenses | (80,035) | (78,200) | (316,356) | (334,133) | |
Net operating income | 82,876 | 87,956 | 342,238 | 327,187 | |
Finance charges | (36,773) | (33,901) | (136,350) | (143,640) | |
Trust administrative expenses | (17,239) | (4,212) | (34,709) | (16,973) | |
Change in fair value of investment properties | (217,719) | (150,295) | (347,855) | (469,763) | |
Share of joint ventures' net income (loss) | (14,771) | 252 | (17,638) | (5,058) | |
Transaction costs | (715) | (77) | (1,052) | (5,375) | |
Impairment of goodwill | — | — | — | (15,721) | |
Net loss before income taxes | (204,341) | (100,277) | (195,366) | (329,343) | |
Current income taxes | — | — | — | 66 | |
Deferred | 58 | — | 58 | — | |
Net loss and comprehensive loss | (204,283) | (100,277) | (195,308) | (329,277) | |
Office Portfolio | (149,903) | (113,128) | (160,505) | (84,865) | |
Retail Portfolio | (69,400) | (143,027) | (287,300) | (351,989) | |
Industrial and Flex Portfolio | 49,795 | 177,674 | 342,473 | 184,791 | |
Corporate | (34,775) | (21,796) | (89,976) | (77,214) | |
Net loss and comprehensive loss | (204,283) | (100,277) | (195,308) | (329,277) |
1 | Quarter ended |
2 | In addition to the quarter events explained above, year ended December 31, 2021 includes |
The decrease in operating revenues according to the consolidated financial statements in 2021 compared with 2020 resulted mainly from a decrease in the average in-place occupancy rate, a decrease in project management revenues and parking revenues in our office portfolio (mainly related to the financial difficulties of a third-party parking manager) and a decrease in the average net rent of renewed leases in our retail portfolio, partly offset by an increase in the average net rent of renewed leases in our office and industrial and flex portfolios and an increase in the in-place occupancy rate in our industrial and flex portfolio.
The decrease in operating expenses according to the consolidated financial statements in 2021 compared with 2020 resulted mainly from a decrease of
Finance charges were down in 2021 mainly due to a decrease in interest on debentures related to the net redemption of
Finally, excluding strategic alternatives consulting fees, Trust administrative expenses increased by
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
Quarter | Year | ||||||
Periods ended | 2021 | 2020 | 2021 | 2020 | |||
$ | $ | % Δ | $ | $ | % Δ | ||
Property type | |||||||
Office | 29,158 | 37,647 | (22.5) | 130,583 | 142,095 | (8.1) | |
Retail | 26,910 | 27,911 | (3.6) | 110,491 | 98,669 | 12.0 | |
Industrial and flex | 27,176 | 24,704 | 10.0 | 103,648 | 94,182 | 10.1 | |
Same property NOI — Cominar's proportionate share 1 | 83,244 | 90,262 | (7.8) | 344,722 | 334,946 | 2.9 | |
Properties sold, acquired and under development in 2020 and 2021 | 1,791 | 151 | 1,086.1 | 6,455 | 2,270 | 184.4 | |
NOI — Cominar's proportionate share 1 | 85,035 | 90,413 | (5.9) | 351,177 | 337,216 | 4.1 | |
NOI — Financial statements | 82,876 | 87,956 | (5.8) | 342,238 | 327,187 | 4.6 | |
NOI — Joint ventures | 2,159 | 2,457 | (12.1) | 8,939 | 10,029 | (10.9) |
1 Refer to section "Non-IFRS and other financial measures" in this press release. |
2021 fourth quarter SPNOI decreased 7.8% when compared with the corresponding quarter of 2020. This decrease resulted mainly from decreases in project management revenues, parking revenues and year end adjustments in our office portfolio, partly offset by the decrease of expected credit losses.
The decrease in same property operating revenues in 2021 compared with 2020 resulted mainly from a decrease in the average in-place occupancy rate, a decrease in project management revenues and parking revenues in our office portfolio (mainly related to the financial difficulties of a third-party parking manager) and a decrease in the average net rent of renewed leases in our retail portfolio, partly offset by an increase in the average net rent of renewed leases in our office and industrial and flex portfolios and an increase in the in-place occupancy rate in our industrial and flex portfolio.
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 loss, as determined in accordance with IFRS, and funds from operations and adjusted funds from operations:
Quarter | Year | ||||
Periods ended | 2021 ¹ | 2020 ¹ | 2021 ² | 2020 ² | |
$ | $ | $ | $ | ||
Net loss | (204,283) | (100,277) | (195,308) | (329,277) | |
Deferred income taxes | (58) | — | (58) | — | |
Initial and re-leasing salary costs | 600 | (603) | 2,340 | 2,233 | |
Change in fair value of investment properties 3 | 233,717 | 151,554 | 370,670 | 481,025 | |
Capitalizable interest on properties under development — joint ventures | 48 | 192 | 192 | 561 | |
Transaction costs | 715 | 77 | 1,052 | 5,375 | |
Impairment of goodwill | — | — | — | 15,721 | |
FFO 3,4 | 30,739 | 50,943 | 178,888 | 175,638 | |
Provision for leasing costs | (8,000) | (7,750) | (32,833) | (30,236) | |
Recognition of leases on a straight-line basis 3 | (1,205) | 1,125 | (2,200) | 1,522 | |
Capital expenditures — maintenance of rental income generating capacity | (8,450) | (50) | (28,700) | (17,000) | |
AFFO 3,4 | 13,084 | 44,268 | 115,155 | 129,924 | |
Per unit information: | |||||
FFO (FD) 4, 5 | 0.17 | 0.28 | 0.98 | 0.96 | |
AFFO (FD) 4, 5 | 0.07 | 0.24 | 0.63 | 0.71 | |
Weighted average number of units outstanding (FD) 5 | 182,988,040 | 182,923,330 | 182,967,202 | 182,893,802 | |
Payout ratio of AFFO 4, 5 | — % | 37.5 % | 42.9 % | 80.3 % |
1 | Quarter ended |
2 | In addition to the quarter events explained above, the year ended |
3 | Including Cominar's proportionate share in joint ventures. |
4 | Refer to section "Non-IFRS and Other financial measures" in this press release. |
5 | Fully diluted. |
For 2021, excluding strategic alternatives consulting fees, FFO would have been
OCCUPANCY RATES
Total | |||||||||||
Committed | In-Place | Committed | In-Place | Committed | In-Place | Committed | In-Place | ||||
Property type | |||||||||||
Office | 87.6 % | 86.0 % | 96.3 % | 96.0 % | 89.8 % | 86.5 % | 90.0 % | 88.3 % | |||
Retail | 91.7 % | 88.4 % | 90.0 % | 86.6 % | 84.3 % | 75.1 % | 90.7 % | 87.2 % | |||
Industrial and flex | 97.2 % | 96.8 % | 97.8 % | 97.0 % | — | — | 97.4 % | 96.9 % | |||
Portfolio total | 93.4 % | 92.0 % | 94.4 % | 92.7 % | 89.0 % | 84.9 % | 93.4 % | 91.7 % |
SUBSEQUENT EVENTS
On
On
On
On
Post year-end, Cominar completed the sale of 1 industrial and flex property and 2 retail properties for a total amount of
ADDITIONAL FINANCIAL INFORMATION
Cominar's consolidated financial statements and management's discussion and analysis for 2021 are filed with SEDAR at sedar.com and are available on Cominar's website at cominar.com.
PROFILE AS AT
Cominar is one of the largest diversified real estate investment trusts in
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.
1 Refer to section "Non-IFRS and other financial measures" in this press release. |
SOURCE
© Canada Newswire, source