TSX:PRV.DB - Post by User
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incomedreamer11on Mar 24, 2022 11:10am
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Post# 34541419
TD comments
TD commentsPROREIT (PRV.UN-T) C$7.07 Q4/21 First Look: Results Below Expectations; SPNOI +5.6% Lorne Kalmar, CPA, CA Sam Damiani, CFA Event Q4/21 results. Conference call this morning at 10:30 AM (dial in: 1-888-664-6383; passcode: 85151159).
Impact: SLIGHTLY NEGATIVE
FFO (f.d.) was $0.114, down 3% versus Q4/20 and 12% below our estimate of $0.129 (consensus: $0.13). AFFO/unit (our calculation) of $0.095 was also below our $0.109 estimate. The negative variance versus our estimate was largely due to slight misses on NOI, other income, and LTIP (Exhibit). While the miss was substantial, because of its nature, we do not expect it to impact our NAV estimate. We attribute the negative variance on NOI versus our estimate to the timing of the $163.2mm portfolio acquisition closing in the quarter. Q4 SPNOI growth was +5.6%, or +5.0% excluding the impact of BDE/abatements and $0.5mm of one-time revenues in Q4/20 (2021: +4.3%). Industrial SPNOI was +7.2% (~59% of industrial GLA).
Occupancy of 98.4% was -10bps q/q on a 30bps decline in office and a 20bps decline in industrial (we believe industrial decline was due to Q4/21 acquisitions). D/GBV was 53.1%, down 510bps q/q. The improvement was driven in part by a $58.6mm IFRS FV gain (2021: $63.2mm). We note that the REIT's leases are triple net (i.e. tenant pays its share of operating expenses) and as such, we do not see much risk to PROREIT's NOI because of cost inflation. ESG. PROREIT published its inaugural ESG report. In our initiation report (link), we had noted that this was one area where the REIT lagged its peers. However, we believe this is a big step forward and better enables it to meet investor demands for transparent disclosures on ESG. The report outlines the REIT's broader ESG strategy and provides key targets and metrics by which to measure its progress, an integral component of ESG reporting, in our view.
Acquisitions/Dispositions 2021 represented PROREIT's most acquisitive year. The REIT acquired 34 industrial assets for $296.9mm, aggregating 2.3mmsf (~$131/sf). The industrial portfolio now accounts for 64% of base rents, versus 49% at Q4/20.
Sold five non-core assets for gross proceeds of $20.9mm.
Other Liquidity of $51.2mm. Completed $69.0mm equity offering and $14.3mm concurrent private placement