Slate Office REIT Reports Fourth Quarter 2018 Results and Positions the REIT for Continued Value Creation
Slate Office REIT (TSX: SOT.UN) (the "REIT") reported today financial results for the three months ended December 31, 2018
that demonstrate positive momentum.
“During the fourth quarter, the team continued to demonstrate its ability to generate compelling operating results as witnessed
by the 14.5% same property NOI growth from the same period in the prior year and positive leasing spreads of 11.1%,” said Scott
Antoniak, Chief Executive Officer of Slate Office REIT.
The REIT also announced further actions to build value through accretive investments and strong operational expertise.
These measures include:
- As part of its ongoing capital recycling program, the REIT reached an agreement to sell a 25%
interest in six office properties in the Greater Toronto Area (the “GTA JV Portfolio”) to an investment fund advised by Wafra
Inc. ("Wafra"), a sophisticated global private equity and alternative asset investor, at a valuation of $527.2 million for a 100%
interest in the assets. Net proceeds from the sale will be used to reduce outstanding debt and create liquidity for future
investments.
- The GTA JV Portfolio was sold at a price that represents an internal rate of return (“IRR”) of 19%
and provides validation for the net asset value of 28% of the REIT’s portfolio. When factoring in the REIT’s recent U.S.
acquisitions at market trading prices, a significant portion of the net asset value of the REIT’s portfolio is validated,
highlighting the disconnect between net asset value and the current trading price. Management believes this disconnect provides a
compelling investment opportunity.
- To further strengthen the REIT’s ability to take advantage of future investment opportunities, the
REIT is modifying its annual distribution to $0.40 per unit from $0.75 per unit, enabling the REIT to retain $26 million of
additional capital annually while providing an annual yield of 6% based on the most recent price of the REIT units.
“The team has a demonstrated ability to generate double-digit rates of return on our office portfolio transactions and by
freeing up more capital to make accretive new investments to grow that portfolio, we are putting the REIT in the best possible
position to fulfill its mission of delivering strong total returns for our unitholders,” said Scott Antoniak, Chief Executive
Officer of Slate Office REIT. “We are confident the team can identify and execute on future investment opportunities that will
continue to generate excellent returns.”
For the CEO’s letter to unitholders for the quarter, please follow the link
here. For the investor presentation for the quarter, please follow the link
here.
FOURTH QUARTER 2018 HIGHLIGHTS
- Improved same property NOI: Same property net operating income (“NOI”) was $20.3 million for
the fourth quarter, an increase of $2.6 million or 14.5% compared to the same period in 2017.
- Strong leasing, continued occupancy gains and positive leasing spreads: The REIT completed a
total of 158,339 square feet of leasing in the fourth quarter, comprised of 70,844 square feet of renewals and 87,495 square feet
of new lease deals. Leasing spreads in the quarter were 11.1% above expiring or building in-place rents. In-place occupancy
increased to 87.6% and weighted average lease term increased to 5.8 years, respectively, compared to 87.1% and 5.7 years as at
September 30, 2018.
- Update on U.S. Portfolio: The REIT continues to grow income at its two properties in Chicago,
Illinois; 20 South Clark (purchased in February 2018) and 120 South LaSalle (purchased in August 2018). Since acquiring each
asset, the REIT has increased committed occupancy from 84.2% to 86.4% at 20 South Clark and from 84.3% to 86.7% at 120 South
LaSalle.
- Core-FFO and AFFO for the quarter and year: Core-FFO was $14.4 million for the fourth quarter
and $57.3 million for the 2018 year, an increase of 21.8% and 22.7% compared to the same periods in 2017, respectively. AFFO was
$11.1 million for the fourth quarter and $46.8 million for the 2018 year, an increase of 16.5% and 17.8% compared to the same
periods in 2017, respectively.
ANNOUNCEMENT OF JOINT VENTURE ARRANGEMENT AND UPDATE ON CAPITAL RECYCLING PROGRAM
The REIT has entered into an agreement to sell a 25% interest in six office properties located in the Greater Toronto Area to
Wafra. The sale price for the 25% interest is $131.8 million, implying a 100% value of $527.2 million or $269 per square foot. This
pricing represents a levered internal rate of return of 19% over the hold period for the buildings, which ranges from 2 to 6
years.
The REIT expects to receive net proceeds of approximately $53.9 million, which will be used to reduce outstanding debt and
create liquidity for future investments. The transaction remains subject to customary closing and financing conditions and is
expected to be completed in the first quarter of 2019.
In conjunction with the sale of the 25% interest, the REIT has commitments to receive incremental debt on five of the six
properties, which is expected to result in $30.4 million of additional proceeds to the REIT at its share and extends those
maturities by 1.5 years. This refinancing will increase the amount of fixed rate debt by $100.9 million. On a pro forma basis,
after adjusting for the impact of the sale and the related up financing and the sale of Duncan Mill, the REIT’s loan-to-value ratio
is expected to be 60.0% and the REIT is expected to have over $70 million of available liquidity. Additionally, the REIT is
undertaking to enter into long-term pay-fixed receive-float interest rate swaps that, together with the fixed rate refinancing,
will result in approximately 90% of the REIT’s borrowing being subject to fixed rates.
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Property
|
|
Address |
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City, Province |
|
GLA (Square Feet) |
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Gateway Centre |
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3000 - 3100 Steeles Avenue East |
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Markham, ON |
|
237,958 |
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The Sheridan Exchange |
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2655 - 2695 North Sheridan Way |
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Mississauga, ON |
|
159,610 |
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Commerce West |
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401 - 405 The West Mall |
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Toronto, ON |
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412,363 |
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West Metro Corporate Centre |
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185 - 195 The West Mall |
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Toronto, ON |
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618,467 |
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4211 Yonge Street |
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4211 Yonge Street |
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Toronto, ON |
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169,929 |
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Woodbine & Steeles Corporate Centre
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7030, 7050, 7100 Woodbine Avenue & 55, 85 Idema Road |
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Markham, ON |
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359,541 |
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This transaction supports the strategic capital recycling program announced by the REIT in the first quarter of 2018. As part of
that program, the REIT has now completed or has committed to the sale of whole or partial interests in 12 properties for an
aggregate sale price of $237.2 million. These sales have generated $34.3 million of profit or $0.45 per unit in aggregate. The
execution of these transactions has repatriated capital from non-core assets as well as assets where significant value has been
created providing the opportunity to repay debt and reduce leverage.
“We are very pleased with the execution we have had under our capital recycling program, highlighted by the co-ownership
arrangement with Wafra,” said Mr. Antoniak, Slate Office REIT’s CEO. “Completing property dispositions at these prices validates
our net asset value and supports our belief that the REIT is trading at a significant discount in the public market. We plan to
continue to evaluate opportunities to recycle capital for future investment opportunities that will be accretive to net asset
value.”
CAPITAL ALLOCATION STRATEGY
Management, in consultation with the Board of Trustees, continually evaluates the relative attractiveness of the asset
allocation alternatives available to the REIT, with a focus on our mission of achieving the best returns for unitholders on a total
return basis. The REIT believes that significant investment opportunities exist to continue to grow unitholder value in both the
Canadian and U.S. markets and including within its own portfolio.
In consideration of the REIT’s current equity cost of capital and the attractiveness of the current investment market, the REIT
is modifying its annual distribution to $0.40 per unit from $0.75 per unit beginning with the REIT’s March 2019 distribution to be
paid in April 2019. The new distribution rate will result in the REIT retaining $26 million of additional capital annually. The
REIT intends to initially use this retained capital to repay debt and reduce leverage in order to create capacity for deployment
into attractive new opportunities or reinvestment in the existing portfolio that are accretive to net asset value per unit.
“We see significant investment opportunities to further grow unitholder value in both the Canadian and U.S. markets and within
our own portfolio,” Mr. Antoniak added. “The actions announced today enhance our ability to take advantage of these opportunities
as they arise, while still providing an attractive yield on the REIT’s units that is comparable to other best-in-class real estate
operators.”
CURRENT UNIT PRICE REPRESENTS A COMPELLING INVESTMENT OPPORTUNITY
The current price for the REIT’s units reflects a substantial discount to the REIT’s IFRS net asset value per unit of $8.55 at
December 31, 2018. Management believes that there is a substantive basis to support a net asset value of $8.55 per unit,
including:
- Wafra's investment provides a market value for $527.2 million of the REIT’s assets: The price
received from a large sophisticated global investor for six properties in the Greater Toronto Area provides validation for the
net asset value of 28% of the REIT’s portfolio. Further, the REIT received appraisals for each property that were consistent with
the REIT’s transaction price.
- Recent acquisition in the United States: The REIT’s acquisition of its two U.S. assets in
Chicago, Illinois each occurred recently in 2018, and accordingly, represent recent market trading prices. Management continues
to observe multiple comparable sales in the Chicago market at pricing parameters in excess of the REIT’s acquisition
metrics.
The following is an illustration of the construction of the REIT’s net asset value:
(amounts in C$ millions, except per unit amounts) |
|
Total |
|
GTA JV Portfolio |
|
$ |
527.2 |
|
Recent U.S. acquisitions |
|
328.7 |
|
Other properties(1) |
|
983.2 |
|
Debt and working capital |
|
(1,195.5 |
) |
Net asset value |
|
$ |
643.6 |
|
Net asset value per unit |
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$ |
8.55 |
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(1) Valuation is equal to a 6.6% capitalization rate on next twelve months expected net
operating income. Properties have an in-place occupancy of 87.1%.
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This gap between the prevailing trading price and net asset value has created a compelling investment opportunity to purchase
units of the REIT. Specifically, the prevailing market price implies a 7.8% capitalization rate on next twelve months expected net
operating income and in-place occupancy of 87.1%, which is significantly inconsistent with current valuation metrics for similar
properties.
While the REIT intends to initially use the proceeds from asset sales and its capital recycling program to pay down debt and
reduce leverage, if the existing unit price discount to net asset value continues, management may also seek to repurchase units of
the REIT through its Normal Course Issuer Bid in order to reduce the number of outstanding REIT units.
Summary of Q4 2018 Results
|
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|
Three months ended December 31, |
(thousands of dollars, except per unit amounts) |
|
2018 |
|
2017 |
|
Change % |
Rental revenue |
|
$ |
59,055 |
|
|
$ |
42,380 |
|
|
39.3 |
% |
Net operating income ("NOI") |
|
27,358 |
|
|
18,489 |
|
|
48.0 |
% |
Net income |
|
27,944 |
|
|
14,174 |
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|
97.1 |
% |
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Same-property NOI |
|
20,291 |
|
|
17,720 |
|
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14.5 |
% |
|
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|
Weighted average diluted number of trust units (000s) |
|
75,261 |
|
|
62,266 |
|
|
20.9 |
% |
Funds from operations ("FFO") |
|
13,758 |
|
|
11,221 |
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22.6 |
% |
FFO per unit |
|
0.18 |
|
|
0.18 |
|
|
— |
% |
FFO payout ratio |
|
102.5 |
% |
|
103.9 |
% |
|
(1.4 |
)% |
Core FFO |
|
14,356 |
|
|
11,782 |
|
|
21.8 |
% |
Core FFO per unit |
|
0.19 |
|
|
0.19 |
|
|
— |
% |
Core FFO payout ratio |
|
98.2 |
% |
|
99.0 |
% |
|
(0.8 |
)% |
AFFO |
|
11,101 |
|
|
9,528 |
|
|
16.5 |
% |
AFFO per unit |
|
0.15 |
|
|
0.15 |
|
|
— |
% |
AFFO payout ratio |
|
127.0 |
% |
|
122.4 |
% |
|
4.6 |
% |
|
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December 31, |
|
|
2018 |
|
2017 |
|
Change % |
Total assets |
|
$ |
1,866,729 |
|
|
$ |
1,364,845 |
|
|
36.8 |
% |
Total debt |
|
1,175,826 |
|
|
795,591 |
|
|
47.8 |
% |
Portfolio occupancy (1) |
|
87.6 |
% |
|
85.8 |
% |
|
1.8 |
% |
Loan to value ratio |
|
63.1 |
% |
|
58.3 |
% |
|
4.8 |
% |
Net debt to adjusted EBITDA leverage (2) |
|
12.0x |
|
11.9x |
|
0.1x |
Interest coverage ratio (2) |
|
2.3x |
|
2.7x |
|
-0.4x |
(1) Including redevelopment properties.
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(2) EBITDA is calculated using trailing twelve month actuals, as calculated below.
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CONFERENCE CALL AND PRESENTATION DETAILS
Senior management will host a live conference call at 9:00 a.m. ET on Monday, March 4, 2019 to discuss the results and ongoing
business initiatives of the REIT.
The conference call and visual presentation will be available via simultaneous audio found at www.snwebcastcenter.com/webcast/slate/2019/0304.
However, if you are an investor or analyst and wish to ask questions, please do so by dialing (647) 427-2311 or 1 (866)
521-4909.
A replay will be accessible until March 18, 2019 via the REIT's website or by dialing (416) 621-4642 or 1 (800) 585-8367 (access
code 6794597) approximately two hours after the live event.
ABOUT SLATE OFFICE REIT (TSX: SOT.UN)
Slate Office REIT is an open-ended real estate investment trust. The REIT's portfolio currently comprises 41 strategic and
well-located real estate assets located primarily across Canada's major population centres including two downtown assets in
Chicago, Illinois. The REIT is focused on maximizing value through internal organic rental and occupancy growth and strategic
acquisitions. Visit slateofficereit.com to
learn more.
ABOUT SLATE ASSET MANAGEMENT L.P.
Slate Asset Management L.P. is a leading real estate investment platform with over $6.0 billion in assets under management.
Slate is a value-oriented manager and a significant sponsor of all of its private and publicly-traded investment vehicles, which
are tailored to the unique goals and objectives of its investors. The firm's careful and selective investment approach creates
long-term value with an emphasis on capital preservation and outsized returns. Slate is supported by exceptional people, flexible
capital and a proven ability to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to
learn more.
SUPPLEMENTAL INFORMATION
All interested parties can access Slate Office REIT's Supplemental Information online at
slateofficereit.com in the Investors section. These materials are also available on Sedar or upon request at ir@slateam.com or (416) 644-4264.
FORWARD LOOKING STATEMENTS
Certain statements herein may be forward-looking statements within the meaning of applicable securities laws. These statements
reflect management’s expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance
and business prospects and opportunities of the REIT including expectations for the current financial year, and include, but are
not limited to, statements with respect to management’s beliefs, plans, estimates and intentions, and similar statements concerning
anticipated future events, results, circumstances, performance or expectations that are not historical facts. Statements that
contain words such as “could”, “should”, “would”, “anticipate”, “expect”, “believe”, “plan”, “intend”, “will”, “may”, “might” and
similar expressions or statements relating to matters that are not historical facts constitute forward-looking statements.
These forward-looking statements are not guarantees of future events or performance and, by their nature, are based on the
REIT’s current estimates and assumptions, which are subject to significant risks and uncertainties. Forward-looking statements
contained herein are made as the date hereof and accordingly are subject to change after such date. The REIT does not undertake to
update any forward-looking statements that are contained herein except as expressly required by applicable securities laws.
NON-IFRS MEASURES
We disclose a number of financial measures in this news release that are not measures used under IFRS, including NOI,
same-property NOI, FFO, FFO payout ratio, Core-FFO, Core-FFO payout ratio, AFFO, AFFO payout ratio, IFRS net asset value, adjusted
EBITDA, net debt to adjusted EBITDA and the interest coverage ratio, in addition to certain measures on a per unit basis.
- NOI is defined as rental revenue less operating property expenses, prior to straight-line rent and
other changes. Same-property NOI includes those properties owned by the REIT for each of the current period and the relevant
comparative period.
- FFO is defined as net income and comprehensive income adjusted for certain items including leasing
costs amortized to revenue, change in fair value of properties, change in fair vale of financial instruments, disposition costs,
depreciation of hotel asset, change in fair value of Class B LP units, distributions to Class B LP unitholders and subscription
receipts equivalent amount.
- Core-FFO is defined as FFO adjusted for the REIT's share of lease payments received for its Data
Centre asset, which for IFRS purposes is accounted for as a finance lease and removes the impact of mortgage discharge fees (if
any).
- AFFO is defined as FFO adjusted for certain items including guaranteed income supplements,
amortization of deferred transaction costs, de-recognition and amortization of mark-to-market adjustments on mortgages refinanced
or discharged, adjustments for interest rate subsidies received, recognition of the REIT's share of lease payments received for
its Data Centre asset, which for IFRS purposes is accounted for as a finance lease, amortization of straight-line rent and
normalized direct leasing and capital costs.
- FFO payout ratio, Core-FFO payout ratio and AFFO payout ratio are defined as distributions declared
divided by FFO, Core-FFO and AFFO, respectively.
- FFO per unit, Core-FFO per unit and AFFO per unit are defined as FFO, Core-FFO and AFFO divided by
the weighted average diluted number of units outstanding, respectively.
- IFRS net asset value is defined as the aggregate of the carrying value of the REIT’s equity, Class B
LP units and deferred units.
- Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation, fair value gains
(losses) from both financial instruments and investment properties, while also excluding non-recurring items such as transaction
costs from dispositions, acquisitions or other events and adjusting income received from the Data Centre to cash received as
opposed to finance income recorded for accounting purposes.
- Net debt to adjusted EBITDA is calculated by dividing the aggregate amount of debt outstanding, less
cash on hand, by annualized adjusted EBITDA.
- Interest coverage ratio is defined as adjusted EBITDA divided by cash interest paid.
We utilize these measures for a variety of reasons, including measuring performance, managing the business, capital allocation
and the assessment of risk. Descriptions of why these non-IFRS measures are useful to investors and how management uses each
measure are included in Management’s Discussion and Analysis, which readers should read when evaluating the measures included
herein. We believe that providing these performance measures on a supplemental basis to our IFRS results is helpful to investors in
assessing the overall performance of our businesses in a manner similar to management. These financial measures should not be
considered as a substitute for similar financial measures calculated in accordance with IFRS. We caution readers that these
non-IFRS financial measures may differ from the calculations disclosed by other businesses, and as a result, may not be comparable
to similar measures presented by others.
Calculation and Reconciliation of Non-IFRS Measures
The tables below summarize a calculation of non-IFRS measures based on IFRS financial information.
The calculation of NOI is as follows:
|
|
|
|
|
Three months ended December 31, |
|
|
2018 |
|
2017 |
Rental revenue |
|
$ |
59,055 |
|
|
$ |
42,380 |
|
Property operating expenses |
|
(29,429 |
) |
|
(23,776 |
) |
IFRIC 21 property tax adjustments |
|
(2,107 |
) |
|
— |
|
Straight-line rents and other changes |
|
(161 |
) |
|
(115 |
) |
NOI |
|
$ |
27,358 |
|
|
$ |
18,489 |
|
|
|
|
|
|
The reconciliation of net income to FFO, Core-FFO and AFFO is as
follows: |
|
|
|
|
|
|
|
Three months ended December 31, |
(thousands of dollars, except per unit amounts) |
|
2018 |
|
2017 |
Net income |
|
$ |
27,944 |
|
|
$ |
14,174 |
|
Add (deduct): |
|
|
|
|
Leasing costs amortized to revenue |
|
1,121 |
|
|
784 |
|
Change in fair value of properties |
|
(9,925 |
) |
|
(5,218 |
) |
Change in fair value of financial instruments |
|
4,547 |
|
|
(253 |
) |
Disposition costs |
|
921 |
|
|
— |
|
Depreciation of hotel asset |
|
268 |
|
|
215 |
|
Deferred income tax recovery |
|
199 |
|
|
— |
|
IFRIC 21 property tax adjustment (1) |
|
(2,107 |
) |
|
— |
|
Change in fair value of Class B LP units |
|
(10,201 |
) |
|
528 |
|
Distributions to Class B unitholders |
|
991 |
|
|
991 |
|
FFO (1) |
|
$ |
13,758 |
|
|
$ |
11,221 |
|
Finance income on finance lease receivable |
|
(927 |
) |
|
(964 |
) |
Finance lease payments received |
|
1,525 |
|
|
1,525 |
|
Core-FFO (1) |
|
$ |
14,356 |
|
|
$ |
11,782 |
|
Amortization of deferred transaction costs |
|
889 |
|
|
508 |
|
Amortization of debt mark-to-market adjustments |
|
(97 |
) |
|
(151 |
) |
Amortization of straight-line rent |
|
(1,282 |
) |
|
(899 |
) |
Interest rate subsidy |
|
108 |
|
|
108 |
|
Guaranteed income supplements |
|
300 |
|
|
40 |
|
Normalized direct leasing and capital costs |
|
(3,173 |
) |
|
(1,860 |
) |
AFFO (1) |
|
$ |
11,101 |
|
|
$ |
9,528 |
|
|
|
|
|
|
Weighted average number of diluted units outstanding (000s) |
|
75,261 |
|
|
62,266 |
|
FFO per unit (1) |
|
$ |
0.18 |
|
|
$ |
0.18 |
|
Core-FFO per unit (1) |
|
0.19 |
|
|
0.19 |
|
AFFO per unit (1) |
|
0.15 |
|
|
0.15 |
|
FFO payout ratio (1) |
|
102.5 |
% |
|
103.9 |
% |
Core-FFO payout ratio (1) |
|
98.2 |
% |
|
99.0 |
% |
AFFO payout ratio (1) |
|
127.0 |
% |
|
122.4 |
% |
(1) Refer to "Non-IFRS measures" section above.
|
|
The reconciliation of cash flow from operating activities to FFO, Core-FFO and AFFO is as follows:
|
|
|
|
|
Three months ended December 31, |
|
|
2018 |
|
2017 |
Cash flow from operating activities |
|
$ |
14,410 |
|
|
$ |
19,642 |
|
Add (deduct): |
|
|
|
|
Leasing costs amortized to revenue |
|
1,121 |
|
|
784 |
|
Disposition costs |
|
921 |
|
|
— |
|
Working capital items |
|
(3,054 |
) |
|
(9,954 |
) |
Straight-line rent and other changes |
|
161 |
|
|
115 |
|
Interest and other finance costs |
|
(13,951 |
) |
|
(7,374 |
) |
Interest paid |
|
13,159 |
|
|
7,017 |
|
Distributions paid to Class B unitholders |
|
991 |
|
|
991 |
|
FFO(1) |
|
$ |
13,758 |
|
|
$ |
11,221 |
|
Finance income on finance lease receivable |
|
(927 |
) |
|
(964 |
) |
Finance lease payments received |
|
1,525 |
|
|
1,525 |
|
Core-FFO(1) |
|
$ |
14,356 |
|
|
$ |
11,782 |
|
Amortization of deferred transaction costs |
|
889 |
|
|
508 |
|
Amortization of debt mark-to-market adjustments |
|
(97 |
) |
|
(151 |
) |
Amortization of straight-line rent |
|
(1,282 |
) |
|
(899 |
) |
Interest rate subsidy |
|
108 |
|
|
108 |
|
Guaranteed income supplements |
|
300 |
|
|
40 |
|
Normalized direct leasing and capital costs |
|
(3,173 |
) |
|
(1,860 |
) |
AFFO (1) |
|
$ |
11,101 |
|
|
$ |
9,528 |
|
(1) Refer to "Non-IFRS measures" section above.
|
|
The calculation of trailing twelve month adjusted EBITDA is as follows:
|
|
|
|
|
Trailing twelve months ended |
|
|
December 31, |
|
|
2018 |
|
2017 |
Net income |
|
$ |
77,137 |
|
|
$ |
49,705 |
|
Straight line rent and other changes |
|
(683 |
) |
|
(1,370 |
) |
Interest income |
|
(264 |
) |
|
(88 |
) |
Interest and finance costs |
|
44,265 |
|
|
25,583 |
|
Change in fair value of properties |
|
(15,288 |
) |
|
(15,126 |
) |
Change in fair value of financial instruments |
|
(2,401 |
) |
|
1,182 |
|
Distributions to Class B shareholders |
|
3,964 |
|
|
3,964 |
|
Disposition costs |
|
2,247 |
|
|
146 |
|
Depreciation of hotel asset |
|
947 |
|
|
799 |
|
Change in fair value of Class B LP units |
|
(11,469 |
) |
|
1,268 |
|
Deferred income tax recovery |
|
(721 |
) |
|
— |
|
Adjusted EBITDA (1) |
|
$ |
97,734 |
|
|
$ |
66,063 |
|
(1) Refer to "Non-IFRS measures" section above.
|
|
The calculation of net debt is as follows:
|
|
|
|
|
December 31, |
|
|
2018 |
|
2017 |
Debt, non-current |
|
$ |
908,488 |
|
|
$ |
612,738 |
Debt, current |
|
267,338 |
|
|
182,853 |
Debt |
|
$ |
1,175,826 |
|
|
$ |
795,591 |
Less: cash on hand |
|
7,192 |
|
|
9,153 |
Net debt |
|
$ |
1,168,634 |
|
|
$ |
786,438 |
The calculation of net debt to adjusted EBITDA is as follows:
|
|
|
|
|
Trailing twelve months ended |
|
|
December 31, |
|
|
2018 |
|
2017 |
Net debt |
|
$ |
1,168,634 |
|
|
$ |
786,438 |
Adjusted EBITDA (2) |
|
97,734 |
|
|
66,063 |
Net debt to Adjusted EBITDA (1) |
|
12.0x |
|
11.9x |
(1) Refer to "Non-IFRS measures" section above.
|
(2) Adjusted EBITDA is based on actuals for the twelve months preceding the balance sheet
date.
|
The interest coverage ratio is calculated as follows:
|
|
|
|
|
Trailing twelve months ended |
|
|
December 31, |
|
|
2018 |
|
2017 |
Adjusted EBITDA |
|
$ |
97,734 |
|
|
$ |
66,063 |
Interest expense |
|
41,715 |
|
|
24,300 |
Interest coverage ratio (1) |
|
2.3x |
|
2.7x |
(1) Refer to "Non-IFRS measures" section above.
|
The following is the calculation of IFRS net asset value on a total and per unit basis at December 31, 2018 and
December 31, 2017 to the REIT's consolidated financial statements:
|
|
|
|
|
December 31, |
|
|
2018 |
|
2017 |
Equity |
|
$ |
611,447 |
|
|
$ |
484,539 |
Class B LP units |
|
31,552 |
|
|
43,021 |
Deferred unit liability |
|
636 |
|
|
491 |
IFRS net asset value |
|
$ |
643,635 |
|
|
$ |
528,051 |
|
|
|
|
|
Diluted number of units outstanding (1) |
|
75,300 |
|
|
62,283 |
IFRS net asset value per unit |
|
$ |
8.55 |
|
|
$ |
8.48 |
(1) Represents the fully diluted number of units outstanding and includes outstanding REIT
units, DUP units and Class B LP units.
|
Investor Relations
Tel: +1 416 644 4264
Slate Office REIT
ir@slateam.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20190304005205/en/