Net Income of $1.5 Billion for the Quarter and $3.2 Billion for the Year;
Company FFO and Realized Gains of $459 Million for the Quarter and $1.5 Billion for the Year
All dollar references are in U.S. dollars, unless noted otherwise.
BROOKFIELD NEWS, Feb. 05, 2020 (GLOBE NEWSWIRE) -- Brookfield Property Partners L.P. (BPY) (“BPY”) today announced financial results for the quarter and year ended December 31, 2019.
“In 2019 BPY generated a total return to unitholders of more than 20% and we continued to reinvest capital raised from the sales of mature assets into higher returning opportunities, including over $500 million of unit buybacks,” said Brian Kingston, Chief Executive Officer. “During the year we also delivered nearly five million square feet of newly developed best-in-class, premier assets across several of our major markets that will begin contributing meaningfully to BPY’s earnings in 2020 and moving forward.”
Financial Results
| | | Three months ended
Dec. 31, | | Twelve months ended
Dec. 31, |
| (US$ Millions, except per unit amounts) | | 2019 | | 2018 | | 2019 | | 2018 | |
| Net income(1) | $ | 1,551 | $ | 858 | $ | 3,157 | $ | 3,654 | |
| Company FFO and realized gains(2) | $ | 459 | $ | 749 | $ | 1,512 | $ | 1,570 | |
| Net income per LP unit(3)(4) | $ | 1.00 | $ | 0.51 | $ | 1.89 | $ | 2.28 | |
| Company FFO and realized gains per unit(4)(5) | $ | 0.48 | $ | 0.77 | $ | 1.57 | $ | 1.97 | |
- Consolidated basis – includes amounts attributable to non-controlling interests.
- Excluding realized gains, Company FFO was $379 million ($0.39 per unit) compared with $416 million ($0.43 per unit) in the prior year period. See "Basis of Presentation" and “Reconciliation of Non-IFRS Measures” in this press release for the definition and components.
- Represents basic net income attributable to holders of LP units. IFRS requires the inclusion of preferred shares that are mandatorily convertible into LP units at a price of $25.70 without an add-back to earnings of the associated carry on the preferred shares.
- Net income attributable to holders of LP units and Company FFO and realized gains per unit are reduced by preferred dividends of $7 million and $15 million for the three and twelve months ended December 31, 2019, respectively in determining per unit amounts.
- Company FFO and realized gains per unit are calculated based on 947.2 million (2018 – 974.1 million) and 955.0 million (2018 – 796.8 million) units outstanding for the three and twelve months ended December 31, 2019, respectively. See "Reconciliation of Non-IFRS Measures" section in this press release for basic net income.
Company FFO (CFFO) and realized gains was $459 million ($0.48 per unit) for the quarter ended December 31, 2019, compared to $749 million ($0.77 per unit) for the same period in 2018. CFFO and realized gains was $1.5 billion ($1.57 per unit) for the year ended December 31, 2019, compared with $1.6 billion ($1.97 per unit) in 2018. The prior year benefited from higher realized gains as we exited a number of large transactions in our LP investments.
Net income for the quarter ended December 31, 2019 was $1.5 billion ($1.00 per LP unit) versus $858 million ($0.51 per LP unit) for the same period in 2018. The increase in net income over the prior year period is primarily attributable to higher valuation gains in our Canada and UK office portfolios, as well as strong performance in several of our LP investments. Net income for the year ended December 31, 2019 was $3.2 billion ($1.89 per unit) compared with $3.65 billion ($2.28 per unit) in 2018.
Operating Highlights
Our Core Office operations generated Company FFO of $185 million for the quarter ended December 31, 2019 compared to $170 million in the same period in 2018 and $662 million for the year ended December 31, 2019 compared to $608 million on a comparable basis in 2018. The business generated 4% same-property NOI growth and fee income of $30 million, which was $3 million higher than in the prior period.
Occupancy in our Core Office portfolio increased 40 basis points in the fourth quarter to 92.8% on 3.3 million square feet of total leasing. Leases signed in the fourth quarter were at rents 41% higher on average than leases that expired in the period. Total leasing for the year was 7.8 million square feet and occupancy increased 90 basis points year-over-year on a comparable basis.
Our Core Retail operations generated Company FFO of $217 million for the quarter ended December 31, 2019 compared to $270 million in the comparable period in 2018 and $772 million for the year ended December 31, 2019 compared to $651 million in 2018. Compared to the prior year period, the current quarter results were impacted by the sale of assets now not contributing, downtime on leasing and an accounting change, which has no economic effect on the business.
Our Core Retail business leased approximately 10.5 million square feet over the past 12 months with suite-to-suite NOI-weighted rent spreads of 4%. Same-store occupancy levels remained at 96.4% for quarter-end December 31, 2019, compared to 96.5% in prior year. On a year-over-year basis, in-place rents remained unchanged, and NOI-weighted sales grew 5.9% to $798 per square foot, a new high for the portfolio.
Our LP Investments generated Company FFO and realized gains of $150 million for the quarter ended December 31, 2019, compared to $410 million in the comparable period in 2018 and $476 million for the year ended December 31, 2019 compared to $721 million in 2018. Excluding $333 million of realized gains recognized in the prior-year period, results declined $7 million primarily due to higher merchant-build income recognized in the prior-year period.