TORONTO, Aug. 14, 2012 /CNW/ - GT Canada Medical Properties Real Estate Investment Trust (the "REIT") (TSXV: MOB.UN) today announced its financial results for the second quarter ended June 30, 2012.
The REIT reported funds from operations ("FFO") per unit and adjusted funds from operations ("AFFO") per unit of $0.031 and $0.025, respectively, representing an FFO payout ratio of 42% and an AFFO payout ratio of 49%. The REIT also achieved an overall portfolio occupancy rate of 95%.
The following highlights should be read in conjunction with the consolidtaed financial statements and management's discussion and analysis for the second quarter ended June 30, 2012. These will be filed on the System for Electronic Document Analysis and Retrieval ("SEDAR") and available on the SEDAR website at www.sedar.com.
FINANCIAL HIGHLIGHTS - June 30, 2012
FFO and AFFO - FFO per unit was $0.031 for the second quarter of 2012 (or $0.124
annualized), representing an FFO payout ratio of 42%. AFFO per unit was
$0.025 for the second quarter of 2012 (or $0.100 annualized),
representing an AFFO payout ratio of 49%.
Occupancy - Occupancy remained stable at 95% as at June 30, 2012.
Gross Leasable Area - Gross leasable area for the portfolio totalled 279,100 square feet as
at June 30, 2012.
Leverage - Total secured debt to gross book value leverage ratio was 53.7% as at
June 30, 2012.
Property Acquisition - On May 1, 2012, the REIT completed the acquisition of a 25,000 square
foot medical office building in Port Hope, Ontario for approximately
$7.5 million, subject to customary closing adjustments. The building is
100% occupied and tenants include medical practitioners, a pharmacy,
lab, and x-ray facilities.
- Rights Offering - On April 24, 2012, the REIT completed its previously announced offering of rights to acquire up to 3,880,212 units of the REIT to unitholders of record on March 30, 2012 at a price of $1.15 per unit. Pursuant to this, the REIT issued a total of 3,880,212 units of the REIT for net proceeds of $4,322,244.
STRATEGIC TRANSACTION HIGHLIGHTS - June 30, 2012
Acquisition of Controlling Interest
On April 16, 2012, the REIT announced it had entered into a support agreement (the "Support Agreement") with NorthWest Value Partners Inc. ("NWVP") whereby NWVP would offer to acquire all of the Units for $2.05 per Unit (the "NWVP Offer") by way of a take-over bid. The NWVP Offer was subject to a number of conditions including acceptance of the NWVP Offer by the holders of at least 66 2/3% of the issued and outstanding Units. In addition, in connection with the NWVP Offer, all the REIT's existing properties are to be sold to NorthWest Healthcare Properties Real Estate Investment Trust ("NWHP REIT") for $87.3 million. This sale is being completed on financial terms that are economically equivalent (to the REIT) to the terms offered (to the Unitholders) pursuant to the NWVP Offer. The REIT's Trustees unanimously resolved to recommend that Unitholders tender their units to the NWVP Offer and support of the sale of the REIT's existing properties.
As a result of the issuance of all of Units available under the Rights Offering, the NWVP Offer was adjusted from $2.05 per unit to $1.87 per Unit. NWVP's take-over bid circular and the REIT's Trustee circular were mailed to Unitholders on April 27, 2012 and April 20, 2012, respectively.
On June 11, 2012, after the extension of the initial expiry date of the NWVP Offer, 18,481,046 Units had been tendered to the NWVP Offer, representing approximately 91% of the total outstanding Units and approximately 68% of the fully diluted Units. As disclosed in the takeover bid circular mailed in connection with the NWVP Offer, and for purposes of ensuring that the REIT continued to meet the ongoing listing requirements of the TSX-V, NWVP sold 1,321,000 Units deposited under the NWVP Offer. After the take-up and payment by NWVP Acquisition L.P. (a wholly-owned subsidiary of NWVP) of the remaining tendered Units, NWVP indirectly owned 16,641,046 Units, representing approximately 82% of the total outstanding Units (approximately 61% of the total outstanding Units on a fully-diluted basis) (the "NWVP Acquisition").
Sale of Existing Portfolio
In connection with the NWVP Acquisition, the REIT has agreed to sell its existing portfolio of properties, in its entirety (the "Existing Portfolio"), to NWHP REIT in two separate transactions. Subject to regulatory requirements, the first transaction will result in the Port Hope Property being conveyed to the NWHP REIT, with the second transaction resulting in the conveyance of the balance of the Existing Portfolio to NWHP REIT.
UPDATE ON BUSINESS OF THE REIT - June 30, 2012
Historically, the REIT targeted select secondary markets in Ontario and built a portfolio of 12 medical office buildings in Ontario as at June 30, 2012. The REIT was successful in establishing a strong presence in its target markets, including one property in each of Lindsay, Midland, Orillia, Port Hope, St. Thomas, Sudbury, Welland, and Whitby, and two properties in each of Guelph and Hamilton.
In addition to Canada, management of the REIT believes that international markets will offer attractive healthcare real estate acquisition opportunities for the REIT in the future. To select international markets in which to expand, the REIT identifies key market characteristics that are consistent with those identified in Canada, specifically:
Demographics: ageing population, increasing life expectancy, and need
Economic: selected markets balance economic growth and stability,
stabilized and/or increasing GDP/capita, and increasing healthcare
spending as % of GDP; and
- Real estate and healthcare trends: fragmented healthcare real estate markets, healthcare operators focusing on "core business", demand for new infrastructure, and growing public and private healthcare services.
As at June 30, 2012, the REIT had no international properties. Management continues to explore international real estate acquisition opportunities for the REIT. Specifically, management has determined that the following select international markets will provide the REIT with attractive healthcare real estate acquisition opportunities going forward: Australasia (Australia and New Zealand), Brazil, and Germany.
GT Canada Medical Properties REIT
GT Canada Medical Properties REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT's objectives are to: (i) provide its unitholders with stable and growing cash distributions from investments focused on healthcare real estate, on a tax efficient basis; (ii) enhance the value of the REIT's assets and maximize long-term unit value; and (iii) expand the asset base of the REIT.
Some financial measures used in this press release, such as FFO, AFFO, and NOI, are used by the real estate industry to measure and compare the operating performance of real estate companies, but they do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS"). As such, they are unlikely to be comparable to similar measures presented by other real estate companies. These non-IFRS measures are more fully defined and discussed in management's discussion and analysis ("MD&A") for the second quarter of 2012, which is available on the SEDAR website at www.sedar.com.
This press release may contain forward-looking statements. Forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements may include, among other things, statements related to acquisitions; development and capital expenditure activities; future maintenance and leasing expenditures; financing; the availability of financing sources; and income taxes. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulations and the factors described under "Risk Factors" in the REIT's MD&A, which is available on www.sedar.com. These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release, and, except as expressly required by applicable law, the REIT assumes no obligation to update such statements.
SOURCE GT Canada Medical Properties Real Estate Investment Trust