Post by
incomedreamer11 on May 04, 2022 8:42am
TD comments
(PMZ.UN-T) C$13.55 Q1/22
First Look: FFO Beat and 2022 Guidance Raised Sam Damiani, CFA Jaz Cumberbatch, CFA (Associate)
Event Q1/22 results; conference call is at 10:00 a.m. (1-833-950-0062 or 1-929-526-1599; passcode: 439910#).
Impact: SLIGHTLY POSITIVE
FFO vs. Estimate: Diluted FFO/unit of $0.381 was +13% y/y (when including the HOOPP properties in 2021) and was well ahead of our estimate/consensus of $0.33. The variance was largely due to higher NOI. AFFO/unit (PMZ's calculation) of $0.303 was also nicely ahead of our $0.27 estimate.
Occupancy: Excluding Northland Village (where tenants are not being renewed pending its conversion into an open-air shopping centre), committed occupancy for the original Primaris portfolio was +10bps q/q to 92.2% and +120bps versus Q2/21, while the total portfolio (including the HOOPP properties) was also +10bps q/q to 89.2%. Q1/22 SPNOI (excluding HOOPP properties) of $33.8mm was +8.2% on the back of a continued recovery from the pandemic that reflected higher percent rent, percent rent in lieu, and specialty leasing revenue slightly offset by lower y/y occupancy (primarily due to Northland Village).
Leasing Update: In Q1/22, Primaris completed 51 renewals totalling 263,000sf at renewal spreads of +2.5% (-3.7% on 93,000sf of CRU leases that was more than offset by +15.4% spreads on four large format leases totalling 169,000 sf). Primaris has 625,000 sf of remaining lease expiries in 2022. Primaris also completed 32,000 sf of new retail leasing in Q1/22.
Guidance Raised: Management raised its 2022 NOI guidance by +2.7% to reflect the Q1/22 outperformance and more favourable assumptions on future leasing activities and rent spreads on expiring leases.
NCIB Activity: As of May 3, 2022, repurchased 0.6mm units for $9.4mm (average price: $14.80) under its NCIB that was recently approved on March 9, 2022. We expect Primaris to remain active on its NCIB going forward, given that the REIT continues to trade at a deep discount to NAV (currently 36%/39% below our NAV/IFRS).
Balance Sheet: D/GBV was unchanged at 28.4%, while debt/EBITDA was slightly lower at 5.3x (pro forma Q4/21: 5.5x). Q1/22 liquidity was $431.8mm, up from $22.6mm in Q4/21, largely reflecting the $700mm unsecured revolving term facility obtained during the quarter. IFRS NAV/unit remained largely unchanged q/q at $22.05 (Q4/21: $22.07).