All dollar references are in Canadian dollars unless noted otherwise.
TORONTO, April 30, 2012
– Brookfield Canada Office Properties (TSX: BOX.UN, NYSE: BOXC), a Canadian REIT (Real Estate Investment Trust), today announced that net income for the three months ended March 31, 2012 was $152.4 million or $1.64 per unit, compared to $40.3 million or $0.43 per unit during the same period in 2011.
Funds from operations (“FFO”) for the three months ended March 31, 2012, was $33.5 million or $0.36 per unit, compared with $31.4 million or $0.34 per unit during the same period in 2011. Adjusted funds from operations (“AFFO”) was $25.7 million or $0.28 per unit for the three months ended March 31, 2012, compared to $22.4 million or $0.24 per unit during the same period in 2011.
Commercial property net operating income for the three months ended March 31, 2012 was $66.0 million, compared with $56.6 million during the same period in 2011.
HIGHLIGHTS OF THE FIRST QUARTER
Continuing its pro-active leasing strategy in the first quarter of 2012, Brookfield Canada Office Properties leased 341,000 square feet of space during the quarter.
The Trust’s occupancy rate finished the quarter at 96.8%, up 60 basis points from year-end 2011. This rate compares favourably with the Canadian national average of 92.7%.
Leasing highlights include:
Toronto – 172,000 square feet
• An 11-year, 34,000-square-foot new lease with Citco (Canada) Inc. at 151 Yonge St.
• An average seven-year, 33,000-square-foot new lease with ARUP Canada Inc. at Hudson’s Bay Centre
Calgary – 91,000 square feet
• An average 13-year, 39,000-square-foot expansion with Suncor Energy Inc. at Suncor Energy Centre
• A five-year, 20,000-square-foot renewal with Regus Business Centre at Bankers Hall
Vancouver – 77,000 square feet
• An average six-year, 56,000-square-foot renewal and expansion with McMillan LLP at Royal Centre
Refinanced BOX’s ownership interest in Exchange Tower for $120 million
subsequent to the first quarter. After repayment of the previous mortgage, BOX generated net proceeds of approximately $65 million at ownership. The new financing has a 10-year term with a fixed interest rate of 4.031%.
Achieved LEED EB:O&M Gold certification at Exchange Tower, Toronto,
subsequent to the first quarter. In a multi-phase effort over the past several years, Brookfield engaged green solution providers and building tenants and worked diligently to enhance the building’s environmental profile. The property’s LEED certification score placed it in the 94th percentile among comparable buildings.
“Brookfield Canada Office Properties had a successful first quarter as we integrated our newly acquired office assets in Toronto and Ottawa,” said Jan Sucharda, president and chief executive officer. “Our proactive leasing strategy coupled with strong fundamentals in our markets helped us realize an uptick in occupancy from year-end 2011.”
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Net Operating Income, FFO and AFFO
This press release and accompanying financial information make reference to net operating income, funds from operations (“FFO”) and adjusted funds from operations (“AFFO”) on a total and per unit basis. Net operating income is defined by us as income from commercial property operations after direct property operating expenses, including property administration costs have been deducted, but prior to deducting interest expense, general and administrative expenses and fair value gains (losses). FFO is defined by us as net income prior to one-time transaction costs, fair value gains (losses), and certain other non-cash items if any. AFFO is defined by us as FFO net of normalized second-generation leasing commissions and tenant improvements, normalized sustaining capital expenditures and straight-line rental income. The Trust uses net operating income, FFO and AFFO to assess its operating results. Net operating income is important in assessing operating performance and FFO is a widely used measure to analyze real estate. AFFO is typically a measure used to asses an entity’s ability to pay distributions. The components of net operating income, FFO and AFFO are outlined in the financial information accompanying this press release. Net operating income, FFO and AFFO do not have any standard meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies.
The Board of Trustees of Brookfield Canada Office Properties announced a distribution of $0.09 per trust unit payable on June 15, 2012 to holders of Trust units of record at the close of business on May 31, 2012.
This press release contains forward-looking statements and information within the meaning of applicable securities legislation. These forward-looking statements reflect management’s current beliefs and are based on assumptions and information currently available to the management of Brookfield Canada Office Properties. In some cases, forward-looking statements can be identified by terminology such as “may”, “will”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “predict”, “forecast”, “outlook”, “potential”, “continue”, “should”, “likely”, or the negative of these terms or other comparable terminology. Although the Trust believes that the anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve assumptions, known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Trust to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information. Accordingly, the Trust cannot give any assurance that its expectations will in fact occur and cautions that actual results may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements and information include, but are not limited to, general economic conditions; local real estate conditions, including the development of properties in close proximity to the Trust’s properties; timely leasing of newly-developed properties and re-leasing of occupied square footage upon expiration; dependence on tenants' financial condition; the uncertainties of real estate development and acquisition activity; the ability to effectively integrate acquisitions; interest rates; availability of equity and debt financing; the impact of newly adopted accounting principles on the Trust's accounting policies and on period-to-period comparisons of financial results; and other risks and factors described from time to time in the documents filed by the Trust with the securities regulators in Canada and the United States, including in the Annual Information Form under the heading “Business of Brookfield Canada Office Properties – Risk Factors” and in the Trust’s most recent Interim Report under the heading “Management’s Discussion and Analysis.” The Trust undertakes no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.
Investors, analysts and other interested parties can access the Trust’s Supplemental Information Package at www.brookfieldcanadareit.com under the Investor Relations/Financial Reports section. This additional financial information should be read in conjunction with this press release.
About Brookfield Canada Office Properties
Brookfield Canada Office Properties is Canada’s preeminent Real Estate Investment Trust (REIT). Its portfolio is comprised of interests in 28 premier office properties totaling 20.7 million square feet in the downtown cores of Toronto, Calgary, Ottawa and Vancouver. Landmark assets include Brookfield Place and First Canadian Place in Toronto and Bankers Hall in Calgary. For more information, visit www.brookfieldcanadareit.com.
Matthew Cherry, Director, Investor Relations and Communications
; Email: firstname.lastname@example.org