Morguard North American Residential REIT Announces 2012 Second Quarter Results

TSX: MRG:UN

MISSISSAUGA, ON, Aug. 2, 2012 /CNW/ - Morguard North American Residential REIT (the 'REIT") (TSX:  MRG UN) today announced its financial results for the three months ended June 30, 2012, its initial reporting period as a publicly traded real estate investment trust. The REIT completed its initial public offering of trust units on April 18, 2012.

FINANCIAL AND OPERATIONAL HIGHLIGHTS 

		As at June 30, 2012	As at December 31, 2011	As at June 30, 2011
Operational information
Number of properties		17	17	17
Total units		5,439	5,439	5,439
Occupancy %		98.4%	98.4%	96.7%
Weighted average in-place rent		$1,189	$1,193	$1,051
Summary of Financial Information
Total assets		$722,397	$679,867	$587,177
Debt(1)		355,471	360,605	346,672
Debt to Total Assets		52%	53%	59%
Weighted average mortgage interest rate		4.4%	4.4%	4.5%
Weighted average term to maturity		4.3	4.7	4.3
(in thousands of dollars, except	Three months  ended  June 30,		Six months ended June 30,
per unit amounts)	2012	2011	2012	2011
Summary of Financial Information
Interest coverage(2)	2.24	2.08	2.17	2.06
Debt coverage ratio(3)	1.49	1.40	1.45	1.39
Revenue	$18,517	$17,748	$36,749	$35,458
Net operating income	$10,503	$9,027	$19,529	$17,706
Income before fair value gains/losses	$3,425	$4,675	$8,155	$9,102
Funds from Operations (FFO)	$5,267	$4,433	$9,498	$8,632
FFO per unit (4)	$0.21	$0.17	$0.37	$0.34
Adjusted Funds from Operations (AFFO)	$5,940	$5,261	$11,603	$10,016
AFFO per unit(4)	$0.23	$0.21	$0.46	$0.39
Distributions per unit (annualized)	$0.60	$0.60	$0.60	$0.60
FFO per payout ratio(4)	71.43%	88.23%	124.29%	113.33%
AFFO per payout ratio(4)	65.22%	71.43%	65.21%	130.00%
Weighted average number of units outstanding during period (000's)(4)	25,473	25,473	25,473	25,473

 

(1)	Represents outstanding principal amount of mortgages payable and Class C LP Units
(2)	Defined as income before fair value gains/losses  plus interest expense, less interest income divided by interest expense excluding interest on Class B LP Units
(3)	Represents contractual payments on mortgages payable and Class C LP Units
(4)	Measured as the sum  of the  Units and Class B LP Units as if they were outstanding through the entire operating period

Certain measures in the above table are not defined by generally accepted accounting principles ("GAAP"). See "Net Operating Income, FFO" below.

Additionally, the REIT announced the acquisition of Village Crossing Apartments for a purchase price of US$16.3 million, satisfied through mortgage financing of US$11.4 million and an advance on the Morguard Facility, and Woodbine Apartments for a purchase price of US$42.1 million, satisfied through an advance on the Morguard Facility.  Village Crossing Apartments is a garden-style multi-unit residential property comprising 189 units on 10.8 acres and is located in West Palm Beach, Florida.  Woodbine Apartments is a garden-style multi-unit residential property comprising 409 units on 19 acres and is located in South Palm Beach County.

NET OPERATING INCOME, FFO

Net operating income ("NOI") is an additional non-GAAP measure that is used by industry analysts, investors and management to measure operating performance of the REIT's properties.  NOI represents income from real estate properties less property operating costs and realty tax expense as presented in the consolidated statement of operations.  Accordingly, NOI excludes certain expenses included in the determination of net income such as trust expenses, interest expense, fair market value adjustments and other indirect operating expenses.  NOI is not a recognized measure under IFRS and, accordingly, the term does not necessarily have a standardized meaning and may not be comparable to similarly titled measures presented by other publicly traded entities.

FFO is an industry standard for evaluating operating performance, but is not indicative of funds available to meet the REIT's cash requirements.  FFO is computed by the REIT in accordance with the current definitions of the Real Property Association of Canada ("REALpac") and is defined as net income before fair value gains/losses real estate properties, fair value gains/losses on the redeemable Class B LP Units classified as liabilities, distributions on the Class B LP Units, gains/losses on the disposition of real estate properties and deferred income taxes on the U.S. properties.

The REIT's Q2 2012 Consolidated Financial Statement and Management's Discussion and Analysis are available on the REIT's website at www.morguard.com and have been filed with SEDAR at www.sedar.com.

About Morguard North American Residential REIT

The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT has been formed to own multi-unit residential properties in Canada and the United States. Concurrently with the completion of the initial public offering of trust units, the REIT indirectly acquired from Morguard, through a limited partnership, interests in a portfolio of 14 Canadian multi-unit residential properties and three U.S. multi-unit residential properties consisting interests in 5,439 residential suites that are located in Ontario, Alberta and Louisiana, with an IFRS value of approximately $716 million as at June 30, 2012.

SOURCE: Morguard North American Residential Real Estate Investment Trust