Morguard Real Estate Investment Trust announces fourth quarter and 2011 annual results and increase in distributions

TSX: MRT.UN

MISSISSAUGA, ON, Feb. 27, 2012 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today announced that net income for the year ended December 31, 2011 was $158.3 million or $2.77 per unit, compared with $174.4 million or $3.07 per unit in 2010.  Net income for the three months ended December 31, 2011 was $48.4 million or $0.84 per unit, compared to $56.7 million or $1.00 per unit for the same period in 2010.

Funds from operations ("FFO") for the year ended December 31, 2011 was $79.5 million or $1.39 per unit ($1.35 per unit fully diluted), compared to $71.8 million or $1.26 per unit ($1.22 per unit fully diluted) in 2010.  FFO for the three months ended December 31, 2011 was $21.4 million or $0.36 per unit ($0.36 per unit fully diluted) compared to $20.5 million or $0.36 per unit ($0.35 per unit fully diluted) for the same period in 2010.

Net operating income for the year ended December 31, 2011 was $133.8 million, compared to $123.6 million in 2010.  Net operating income for the three months ended December 31, 2011 was $35.0 million, compared with $34.4 million during the same period in 2010.

DISTRIBUTION INCREASE
The board of Trustees of Morguard REIT announced an increase in the distribution paid to unitholders.  The increase to $0.96 per unit per annum (from $0.90 currently) will be effective for unitholders of record at the close of business on March 30, 2012.

NET OPERATING INCOME, FFO
This press release and accompanying financial information make reference to net operating income and funds from operations ("FFO") on a total and per unit basis.  Net operating income is defined as income from property operations after operating expenses have been deducted, but prior to deducting interest expense, general and administrative expenses and fair value gains (losses).  FFO is defined as net income prior to extraordinary items, valuation adjustments, and certain other non-cash items, if any.

Readers are cautioned that although the terms "Net Operating Income" and "Funds from Operations" are commonly used to measure, compare and explain the operating and financial performance of Canadian real estate investment trusts and such terms are defined in the Management's discussion and Analysis, such terms are not recognized terms under IFRS.  Such terms do not necessarily have a standardized meaning and may not be comparable to similarly titled measures presented by the other publicly traded entities.

FINANCIAL STATEMENTS AND MORGUARD'S DISCUSSION AND ANALYSIS
Morguard REIT's 2011 Consolidated Financial Statement and Management's Discussion and Analysis along with its 2010 Annual Report are available on Morguard REIT's website at www.morguardreit.com and have been filed with SEDAR at www.sedar.com

ABOUT MORGUARD REAL ESTATE INVESTMENT TRUST
Morguard REIT is a closed-end real estate investment trust, which owns a diversified portfolio of 53 retail, office and mixed-use properties in Canada with a book value of $2.1 billion and approximately 8.5 million square feet of leaseable space.

Consolidated Balance Sheet

(In thousands of dollars, except per-unit amounts)		2011			2010
Assets
Real estate properties	$	2,119,084		$	1,935,901
Amounts receivable		8,851			7,756
Other assets		1,321			981
Cash and cash equivalents		8,134			7,441
	$	2,137,390		$	1,952,079
Liabilities
Mortgages and bonds payable	$	799,672		$	760,219
Convertible debentures payable		86,457			94,974
Accounts payable and other liabilities		34,496			34,300
Bank indebtedness		43,852			8,620
Unitholders' Equity		1,172,913			1,053,966
	$	2,137,390		$	1,952,079

Consolidated Statements of Income and Comprehensive Income

Three months ended December 31,					Year ended December 31,
(In thousands of dollars, except per-unit amounts)		2011		2010		2011		2010
Revenue from real estate properties	$	60,673	$	60,052	$	235,693	$	220,301
Property operating expenses		23,679		23,764		94,238		89,479
Property management fees		2,036		1,925		7,676		7,237
Net operating income		34,958		34,363		133,779		123,585
Interest expense		12,692		12,929		50,833		48,571
General and administrative		954		1,240		4,538		4,472
Amortization expense		11		19		48		79
Other expenses / (income)		14		(3)		5		(40)
Income before fair value changes on real estate properties        and loss on sale of real estate properties		21,287		20,178		78,355		70,503
Fair value gains on real estate properties		27,086		36,514		79,947		104,137
Loss on sale of real estate properties		—		(1)		—		(276)
Net income for the year	$	48,373	$	56,691	$	158,302	$	174,364
Other comprehensive income
Amortization - cash flow hedge		240		234		951		930
Comprehensive income	$	48,613	$	56,925	$	159,253	$	175,294
Net income per-unit
Basic	$	0.84	$	1.00	$	2.77	$	3.07
Diluted	$	0.80	$	0.92	$	2.62	$	2.85

Reconciliation of Net Income to Funds from Operations

Three months ended December 31,					Year ended December 31,
(In thousands of dollars, except per-unit amounts)		2011		2010		2011		2010
Net income for the year	$	48,373	$	56,691	$	158,302	$	174,364
Add / (deduct):
Accretion of convertible debentures		80		357		1,121		1,250
Fair value gains on real estate properties		(27,086)		(36,514)		(79,947)		(104,137)
Loss on sale of real estate properties		—		1		—		276
Funds from operations	$	21,367	$	20,535	$	79,476	$	71,753
Funds from operations per-unit
Basic	$	0.36	$	0.36	$	1.39	$	1.26
Diluted	$	0.36	$	0.35	$	1.35	$	1.22