FAM REIT announces year end financial results for 2012

TORONTO, March 8, 2013 /CNW/ - FAM Real Estate Investment ("FAM REIT") (TSX: F.UN, F.WT) announced today its financial results for the four-day period of operations following its initial public offering ("IPO") on December 28 to December 31, 2012. We believe these results are neither meaningful nor indicative of a full quarter's operational and financial results.

To better assist investors gain insight into our performance on a full quarterly basis, we have included historical results for the three months ended December 31, 2012 along with the IPO forecast for the three months ended March 2013 for comparison purposes.

Results for the four operational day period ended December 31, 2012

The results of operations included in the REIT's consolidated financial statements for the period from August 27, 2012 to December 31, 2012 represent four days of operations of the portfolio of 27 income-producing properties comprised of industrial, office and retail properties acquired on December 28, 2012 (the "Initial Properties").

During the four operational days with the period from August 27, 2012 to December 31, 2012, the REIT achieved net income of $12.3 million and net operating income of $0.2 million. Included in net income is a $12.8 million unrealized fair value gain on investment properties and a $0.4 million unrealized fair value loss on financial instruments. Funds from Operations ("FFO") was $0.005 per diluted trust unit, for the four days of operations during the period from August 27, 2012 to December 31, 2012. Adjusted Funds from Operations ("AFFO") was $0.001 per diluted trust unit for the same period.

Historical results for the three month period ended December 31, 2012

Diluted net income per trust unit was $1.58 for the three months ended December 31, 2012. FFO for the three months ended December 31, 2012 was $0.26 per diluted trust unit. FFO for the three months ended December 31, 2012 is in line with forecasted results for the three months ending March 31, 2013.

AFFO for the three months ended December 31, 2012 was $0.23 for diluted AFFO per trust unit. AFFO for the three months ended December 31, 2012 is in line with forecasted results for the three months ending March 31, 2013.

Financial Highlights and Key Performance Indicators  

Outlook

At December 31, 2012, the REIT's properties had an occupancy rate of 97.4%, which is one of the highest in the diversified Canadian commercial REIT sector. Based on our current pipeline of leasing activity, we expect to maintain portfolio occupancy at or above 96%, with a tenant retention rate in the 95% range throughout fiscal 2013 (assuming no changes to the portfolio through acquisitions or dispositions).

Shant Poladian, Chief Executive  Officer of FAM REIT, commented, "Our historical results for the three months ended December 31, 2012 are consistent with the quarterly performance we currently expect to achieve throughout fiscal 2013. Accordingly, it is our current expectation that our 2013 AFFO payout ratio will be lower than 90% (assuming no acquisitions, dispositions or changes to capital structure) based on the current $0.75 annualized distribution level."

Other information

Information appearing in this press release is a select summary of results. The consolidated financial statements and management's discussion and analysis for the REIT are available at www.sedar.com and our website at www.famreit.com.

About FAM Real Estate Investment Trust

The REIT is a diversified commercial real estate investment trust focused on owning and acquiring strategically well-located industrial, office and retail real estate located primarily across Canada. The REIT's current portfolio aggregates approximately 1.7 million square feet of gross leasable area. The properties are located in Manitoba (eighteen properties), Alberta (four properties), Saskatchewan (two properties), Ontario (two properties) and the Northwest Territories (one property). 84% of the portfolio's gross leasable area is concentrated in large population centres, including Winnipeg, the Greater Toronto Area, Calgary and Regina.

Forward looking information

This press release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, general and local economic and business conditions; the financial condition of tenants; our ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest rate fluctuations. Our objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable, interest rates remain stable, conditions within real estate market remain consistent, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forward-looking information in this press release speaks as of the date of this press release. The REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise. Additional information about these assumptions and risks and uncertainties is contained in the REIT's filings with securities regulators, including its latest annual information form and MD&A.

SOURCE: FAM Real Estate Investment Trust