Firm Capital earns $9.82-million in Q3, raises dividend
2021-11-11 18:48 ET - News Release
Mr. Robert McKee reports
FIRM CAPITAL PROPERTY TRUST ANNOUNCES STRONG THIRD QUARTER RESULTS, NINTH DISTRIBUTION INCREASE IN NINE YEARS AND $8.21/UNIT NAV
Firm Capital Property Trust has released its financial results for the period ended Sept. 30, 2021, a 2-per-cent distribution increase (48.6-per-cent cumulative distribution increases in nine years or since inception) and 8-per-cent net asset value growth since the beginning of 2021.
TENANT DIVERSIFICATION
- The portfolio is well diversified by tenant profile with no tenant currently accounting for more than 11.7% of total net rent. Further, the top 10 tenants are comprised of large national tenants and account for 30.7% of total net rent.
PROPERTY PORTFOLIO HIGHLIGHTS
- The portfolio consists of 62 commercial properties with a total gross leasable area ("GLA") of 2,241,013 square feet, four multi-residential complexes comprised of 464 units and two Manufactured Home Communities comprised of 423 units.
- The portfolio is well diversified and defensive in terms of geographies and property asset types. Proforma acquisitions announced subsequent to quarter end, 40% of asset value is comprised of grocery anchored retail properties, followed by 27% for industrial and 17% for multi-residential.
THIRD QUARTER HIGHLIGHTS
- Net income for the three months ended September 30, 2021 was approximately $9.8 million, in comparison to the $31.8 million net income for the three months ended June 30, 2021, but a significant increase over the $3.9 million in net income reported for the three months ended September 30, 2020;
- Net income for the nine months ended September 30, 2021 was approximately $51.8 million, compared to the $2.4 million reported for the nine months ended September 30, 2020;
- $8.21 Net Asset Value ("NAV") per Unit, a 1% increase in comparison to the $8.15 NAV per unit reported in Q2/2021;
- On a cash basis ("Cash NOI"), for the three months ended September 30, 2021 was approximately $8.0 million, a 12% increase compared to the $7.2 million reported for the three months ended June 30, 2021 and a 6% increase over the $7.5 million reported for the three months ended September 30, 2020. Cash NOI for the nine months ended September 30, 2021 was approximately $22.1 million, a 5% increase over the $21.1 million for the nine months ended September 30, 2020;
- Adjusted Funds From Operations ("AFFO") for the three months ended September 30, 2021 was approximately $4.3 million, a 21% increase over the $3.6 million reported for the three months ended June 30, 2021, and a 5% increase over the $4.1 million reported for the three months ended September 30, 2020. AFFO for the nine months ended September 30, 2021 was approximately $11.4 million, a 5% increase over the $11.2 million reported for the nine months ended September 30, 2020. Including gains on sales, AFFO was $7.5 million for the three months ended September 30, 2021, in comparison to the $7.1 million and $4.1 million for the three months ended June 30, 2021 and September 30, 2020, respectively;
- AFFO per Unit was $0.128 for the three months ended September 30, 2021 compared to the $0.116 per Unit reported for the three months ended June 30, 2021 and the $0.139 per Unit reported for the three months ended September 30, 2020. Including gains on sales, AFFO per Unit was $0.219;
- AFFO Payout Ratio was 100% for the three months ended September 30, 2021, compared to the 110% for the three months ended June 30, 2021 and the 90% reported for the three months ended September 30, 2020. AFFO Payout Ratio for the nine months ended September 30, 2021 was 106% compared to the 101% for the nine months ended September 30, 2020. Including gains on sales, AFFO Payout Ratio was 58% for the three months ended September 30, 2021 in comparison to the 56% and the 90% for the three months ended June 30, 2021 and September 30, 2020, respectively;
- Commercial occupancy was a solid 92.8%, while residential occupancy was 94.9% and Manufactured Homes Communities was 99.4%; and
- Conservative leverage profile with Debt / Gross Book Value ("GBV") at 44.8%.
YTD FINANCIAL HIGHLIGHTS
- Ninth Consecutive Distribution Increase. +2% Increase in Monthly Distributions Commencing in 2022: The Trust is pleased to announce that its Board of Trustees have approved a 2% increase in its monthly distributions to $0.0433 per Trust Unit from $0.0425 per Trust Unit commencing in 2022. On an annualized basis this equates to annual distributions of $0.52 per Unit, up from $0.51 per Unit. This is the Trust's ninth distribution increase in nine years and represents a cumulative increase of 48.6% since the Trust's inception in 2012. As such, the Trust is pleased to announce that it has declared and approved monthly distributions in the amount of $0.0433 ($0.52 per annum) per Trust Unit for Unitholders of record on January 31, 2022, February 28, 2022 and March 31, 2022 payable on or about February 15, 2022, March 15, 2022 and April 15, 2022, respectively;
- +8% NAV Growth since the Beginning of 2021: The Trust is pleased to report another quarter of NAV growth, with NAV at $8.21 per Unit, a 1% increase in comparison to the $8.15 NAV per unit reported in Q2/2021 and a 8% increase since the beginning of 2021;
- $28 Million of Capital Recycling: The Trust continues to focus its near-term acquisition efforts on the industrial and multi-residential sectors across Canada by reducing its exposure to its non-core retail assets. In this regard, the Trust completed the sales of two retail properties from the Centre Ice Retail Portfolio during the quarter with gross proceeds of approximately $2.9 million. For the nine months ended September 30, 2021 the Trust has completed the sale of twelve retail properties from the Centre Ice Portfolio with gross proceeds of approximately $21.9 million. In addition, on September 9, 2021, the Trust completed the sale of it's 100% whole owed commercial retail centre in Hanover, Ontario for gross proceeds of approximately $6.0 million;
- $124 Million in Acquisitions:
- On March 16, 2021, the Trust closed the acquisition of a 50% interest in in a 181 site Manufactured Housing Community named Mountview Mobile Home Park ("Mountview") located in Calgary, Alberta. The acquisition price for 100% of Mountview was $16.9 million (excluding transaction costs). The acquisition price for the Trust's portion was $8.5 million. On April 30, 2021, Mountview was financed with a $11.3 million first mortgage with a Canadian Chartered Bank. The interest only mortgage carries a 2.5% interest rate and a 1 year term. The Trust's portion of the mortgage was approximately $5.7 million;
- On May 3, 2021, the Trust closed the acquisition of a 70% interest in 128 units in two multi-residential buildings (the "Edmonton Properties"). The acquisition price for 100% of the Edmonton Properties was $25.0 million (excluding transaction costs). The acquisition price for the Trust's portion was $17.5 million (excluding transaction costs). The Edmonton Properties were financed with a new $17.0 million mortgage (the Trust's pro-rata share was approximately $11.9 million) with a Canadian Chartered Bank for an interest rate of approximately 2.5%, term of five years and a 30 year amortization;
- On May 5, 2021, the Trust closed the acquisition of a 70% interest in 132 units in three multi-residential buildings (the "Lower Sackville Properties"). The acquisition price for 100% of the Lower Sackville Properties was $18.0 million (excluding transaction costs). The acquisition price for the Trust's portion was $12.6 million (excluding transaction costs). The Lower Sackville Properties were financed with a new $13.7 million mortgage (the Trust's pro-rata share was approximately $9.6 million) with a Canadian Chartered Bank for an interest rate of approximately 2.4%, term of five years and a 30 year amortization;
- On August 4, 2021, the Trust closed the acquisition of a 50% interest in in a 242 condominium unit Manufactured Housing Community named Hidden Creek Condominium ("Hidden Creek") located in McGregor, Ontario. The acquisition price for 100% of Hidden Creek was approximately $10.7 million (excluding transaction costs). The acquisition price for the Trust's portion was $5.4 million;
- On September 28, 2021, the Trust completed the acquisition of a 40% interest in a 11,246 square foot single tenant retail property located in Toronto, Ontario. The acquisition price for the property is approximately $23.8 million (excluding transaction costs). The Trust's portion of the acquisition price is approximately $9.5 million. The property is 100% occupied by Rexall;
- On October 28, 2021, the Trust announced the acquisition of three industrial properties. One of the properties is located in Woodstock, Ontario and two are located in Stratford, Ontario (the "Portfolio"). The acquisition price for the Portfolio is $15.0 million, (excluding transaction costs). The Portfolio is 100% occupied and is being acquired from the tenant as part of a sale leaseback. Closing of the Portfolio is anticipated during the period ending December 31, 2021; and
- On November 3, 2021, the Trust announced the acquisition of a multi-residential building consisting of 135 units located in Pointe Claire, Quebec (the "Montreal Property"). The acquisition price for the Montreal Property is approximately $55.0 million (excluding transaction costs). The Montreal Property will be financed with a new first mortgage and the Trust's existing cash resources (including the Trust's credit facilities). Closing of the Montreal Property is anticipated during the period ending March 31, 2022.
- $29 Million Public Equity Offering: On June 8, 2021, the Trust completed a public equity offering of Trust Units. 4,107,800 Trust Units were issued at a price of $7.00 per Trust Unit for gross proceeds of approximately $28.8 million ($27.1 million, net of closing costs);
For the complete financial statements, Management's Discussion & Analysis and supplementary information, please visit SEDAR or the Trust's website.
DISTRIBUTION REINVESTMENT PLAN & UNIT PURCHASE PLAN
The Trust has in place a Distribution Reinvestment Plan ("DRIP") and Unit Purchase Plan (the "UPP"). Under the terms of the DRIP, FCPT's Unitholders may elect to automatically reinvest all or a portion of their regular monthly distributions in additional Units, without incurring brokerage fees or commissions. Under the terms of the UPP, FCPT's Unitholders may purchase a minimum of $1,000 of Units per month and maximum purchases of up to $12,000 per annum. Management and trustees have not participated in the DRIP or UPP to date and own approximately 7% of the issued and outstanding trust units of the Trust.