RioCan Real Estate Investment Trust Announces Financial Results for the Third Quarter of 2018 With 2.1% Same Property NOI Growth From Major Market Assets and Record Funds From Operations per Unit
RioCan’s HIGHLIGHTS for the three months ended September 30, 2018 (“Third Quarter”):
Net income from continuing operations attributable to unitholders for the three and nine months ended September 30, 2018, is $128.9 million and $377.4 million, respectively;
RioCan reported its highest quarterly FFO per unit of $0.47 in the Third Quarter, excluding Q4 2015 when the Trust received one-time Target settlement income, which represents a 2.5% increase from Q3 2017. For the nine months ended September 30, 2018, FFO per unit increased 3.7% as compared to the same period in 2017, despite the substantial dispositions completed and $4.8 million severance costs;
Same property NOI increased 1.6% in the Third Quarter when compared to Q3 2017. Same property NOI for the Trust’s six major market assets increased 2.1% over the same comparable period while same property NOI decreased 0.7% for its secondary market assets.
Same property NOI increased 2.3% for the nine months ended September 30, 2018 as compared to the same period in 2017. Same property NOI for the Trust’s six major market assets increased 2.8% over the same comparable periods while same property NOI decreased 0.3% for its secondary market assets;
As at September 30, 2018, committed occupancy for RioCan’s retail portfolio increased 20 basis points to 97.2% and committed occupancy for office increased 30 bps to 93.8%, compared to the previous quarter. The committed occupancy for RioCan’s retail assets in the six major markets is 98.2%;
In-place occupancy increased 60 basis points to 96.2% and committed occupancy for the overall portfolio increased 20 basis points to 97.0% as at September 30, 2018, compared to the previous quarter;
As at September 30, 2018, committed occupancy for RioCan’s major market assets remained high at 98.0% while in-place occupancy for these major market assets increased 50 bps to 97.5%, compared to the previous quarter;
The percentage of annualized rental revenue generated from RioCan’s properties in Canada’s six major markets increased 2.7% from the previous quarter to 84.1% as at September 30, 2018, with the similar measure from the Greater Toronto Area (GTA) increasing 2.0% to 45.5%;
RioCan is making great progress on its urban mixed-use developments. The office space at the flagship development The Well is 71% leased. The commercial space at its King Portland Centre is fully leased and substantially complete, and condo purchasers will take possession of their units in Q2 2019. The ePlace condo and rental towers are both near completion with some condo purchasers expected to take possession of their units in Q4 2018 and marketing for the rental units will commence soon. The Bathurst College Centre is substantially complete and fully leased. The Frontier project in Ottawa is expected to be completed in the first half of 2019 and the marketing of rental units will also commence soon;
One year after the Trust’s announcement in October 2017 to accelerate its portfolio focus in Canada’s six major markets, the Trust has closed or entered into firm and conditional agreements or letters of intent for 65 properties for gross sales proceeds of $1.3 billion at a weighted average capitalization rate of 6.49% based on in-place NOI, representing approximately 63% of the announced disposition target.
For the nine months ended September 30, 2018, the Trust’s maintenance capital expenditures were $28.5 million , $5.3 million lower than our normalized capital expenditures of $33.8 million for the period.