Morguard Real Estate Investment Trust Announces 2011 Third Quarter Results

MISSISSAUGA, On, Nov. 7, 2011 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today announced its financial results for the three months ended September 30, 2011 ("Q3").

Morguard REIT's Q3 2011 Consolidated Financial Statements 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.

HIGHLIGHTS

• Net operating income for Q3 2011, increased to $32.9 million from $31.2 million for the same period in 2010.
• Net income for Q3 2011 totalled $45.3 million or $0.79 per-unit (basic) and $0.74 per-unit (diluted) compared to $60.8 million or $1.07 per-unit (basic) and $0.97 per-unit (diluted) for the same period in 2010.  In Q3 2011, net income included $26.3 million in fair value gains on real estate properties compared with $43.3 million in fair value gains on real estate properties included in net income in Q3 2010.
• Funds from operations ("FFO") increased to $19.4 million or $0.34 per-unit (basic) and $0.33 per-unit (diluted) compared to $17.9 million or $0.32 per-unit (basic) and $0.30 per-unit (diluted) for the same period in 2010.
• Overall portfolio occupancy levels were at 95%.

Net Income

(In thousands of dollars, except per-unit amounts) For the three months ended September 30,	2011	2010
Revenue from real estate properties	$      57,983	$      55,229
Net operating income	32,862	31,228
Income before fair value changes on real estate properties	19,001	17,576
Fair value gains on real estate properties	26,269	43,256
Net income for the period	$      45,270	$      60,832
Net income per-unit
Basic	$ 0.79	$ 1.07
Diluted	$ 0.74	$ 0.97

Funds From Operations

The real estate industry has adopted a measure of FFO to supplement net income as an operating performance measurement.  The Trust's calculation of FFO is consistent with the definition provided by the Real Property Association of Canada ("REALPac").

FFO is defined as net income adjusted for fair value gains or losses on real estate properties and accretion of convertible debentures.  FFO per-unit is calculated by dividing FFO attributable to unitholders by the weighted average number of units outstanding for the period.

FFO was calculated as follows:

(In thousands of dollars, except per-unit amounts) For the three months ended September 30,						2011							2010
Net income for the period						$   45,270							$   60,832
Add/(deduct) items not affecting cash:
Accretion of convertible debentures						367							332
Fair value gains on real estate properties						(26,269)							(43,256)
Funds from operations						$   19,368							$   17,908
Funds from operations per-unit
Basic						$ 0.34							$ 0.32
Diluted						$ 0.33							$ 0.30

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.

Morguard is a closed-end real estate investment trust, which owns a diversified portfolio of 51 retail, office, and mixed-use properties in Canada with a book value of $2.0 billion and approximately 8.3 million square feet of leasable space.  For more information, visit the Trust's website at www.morguardreit.com.