Dream Office REIT Reports 2016 Year-End Results and Provides Progress Update on Disposition Program and Strategic Plan
(firmenpresse) - TORONTO, ONTARIO -- (Marketwired) -- 02/23/17 -- DREAM OFFICE REAL ESTATE INVESTMENT TRUST (TSX: D.UN) or ("Dream Office REIT", the "Trust" or "we") today announced its financial results for the three months and year ended December 31, 2016 and provided an update on strategic initiatives for 2017 (the "Strategic Plan"). Management will host a conference call to discuss the results on February 24, 2017 at 8:00 a.m. (ET).
HIGHLIGHTS FOR THE QUARTER AND YEAR
UPDATE ON STRATEGIC PLAN FOR 2017
On February 18, 2016, the Trust introduced the Strategic Plan to reduce the discount between our unit price and our net asset value ("NAV")(1). The Trust is pleased to report that it has made solid progress on the execution of the Strategic Plan and provides an update for 2017.
(i) Sales price reflects gross proceeds net of adjustments and before transaction costs.
At the time of the Strategic Plan announcement in February 2016, our portfolio of assets was classified into three segments (Core Assets, Private Market Assets, and Value-Add Assets). Over the course of 2016, as the Trust executed on its Strategic Plan, we found there was increasing liquidity for properties in Alberta, which comprised the majority of the Value-Add Assets. With the recent disposition of 1.6 million square feet of properties in Alberta, the Trust has revisited the assets within its segments, with the composition and strategy for each segment as follows:
Core Assets(2)
The Trust identified its core holdings (the "Core Assets"), which currently represent 66% of the total carrying value (excluding assets held for sale), as at December 31, 2016. The Core Assets include our long-term holdings located in downtown Toronto, downtown Calgary, 700 De La Gauchetiere St. W. in downtown Montreal, Station Tower in suburban Vancouver, 5001 Yonge St. in North York, 50 & 90 Burnhamthorpe Rd. W. (Sussex Centre) in Mississauga, and 150 Metcalfe St. in Ottawa. As at December 31, 2016, these assets were 94% leased with a WALT of approximately 5.5 years and have an aggregate investment property value of approximately $3.3 billion with associated mortgages outstanding of approximately $1.3 billion. The NAV of our Core Assets was approximately $2.0 billion or $17.68 per unit.
The Trust continues to drive value from our Core Assets by making prudent asset management decisions in order to meet tenant and unitholders objectives over the long-term. Included in the Core Assets are six properties in downtown Calgary totalling approximately $290 million of carrying value and approximately $211 million of NAV. We believe those downtown Calgary assets are of higher quality and more resilient to the prolonged weakness in the Alberta economy relative to the remainder of the Alberta assets included in our Private Market and Value-Add strategies.
Private Market Assets(2)
The Trust identified good quality assets, primarily in Saskatchewan, Greater Toronto Area, Eastern Canada and Alberta as assets that the Trust believes are fairly liquid, but not strategic to the longer term objectives of the Trust (the "Private Market Assets"). As at December 31, 2016, the Private Market Assets represented approximately $1.1 billion of the total portfolio carrying value (excluding assets held for sale), with approximately $0.4 billion of associated mortgages. The NAV of our Private Market Assets was $0.7 billion or $6.48 per unit.
The Trust continues to believe that the best course of action is to execute a mandate similar to that of a real estate private equity fund, and continue to sell and crystalize the value of the Private Market Assets in 2017 and beyond.
Value-Add Assets(2)
The Trust identified the balance of the assets (the "Value-Add Assets"), primarily in Alberta and Yellowknife, as requiring active asset management or the passage of time prior to improving their demand profile and/or liquidity in the Private Market. As at December 31, 2016, the Value-Add Assets represented approximately $0.5 billion of the total portfolio carrying value (excluding assets held for sale), with approximately $0.3 billion of associated mortgages. The NAV of our Value-Add Assets was $0.2 billion or $1.54 per unit.
The hold period for these assets is difficult to determine at this juncture, although the Trust remains opportunistic in improving the value or achieving liquidity when and where possible.
The Trust intends to advance the Strategic Plan until the Core Assets represent substantially all of the Trust''s portfolio, with the goal of stabilizing the business by 2019. The proceeds from dispositions will be targeted to making the balance sheet stronger, investing in our buildings and opportunistically repurchasing our units, until such time as we see more attractive investment opportunities in the marketplace to redeploy the capital.
We believe the Trust will have ample liquidity and balance sheet flexibility to execute on the Strategic Plan.
"The investment market has remained active and we are having success selling some of our riskiest assets," said Jane Gavan, Chief Executive Officer of Dream Office REIT. "As we continue to sell assets that are not core to our strategy, we will improve the quality of our remaining business and predictability of the cash flows."
OPERATIONAL HIGHLIGHTS
Footnotes: please refer to definitions on page 7.
FINANCIAL HIGHLIGHTS
Footnotes: please refer to definitions on page 7.
CAPITAL HIGHLIGHTS
"We have maintained a strong balance sheet, with a higher quality portfolio relative to a year ago, along with ample liquidity and good visibility into our asset disposition pipeline," said Rajeev Viswanathan, Chief Financial Officer of Dream Office REIT. "Our balance sheet provides us the ability to prudently allocate capital and drive long-term value for unitholders."
Footnotes: please refer to definitions on page 7.
Footnotes: please refer to definitions on page 7.
CALL
Management will host a conference call to discuss the results tomorrow, February 24, 2017 at 8:00 a.m. (ET). To access the conference call, please dial 1-888-465-5079 in Canada and the United States or 416-216-4169 elsewhere and use passcode 8248 914#. To access the conference call via webcast, please go to Dream Office REIT''s website at and click on the link for News & Events, then click on Calendar of Events. A taped replay of the conference call and the webcast will be archived for 90 days.
OTHER INFORMATION
Information appearing in this news release is a select summary of results. The consolidated financial statements and Management''s Discussion and Analysis ("MD&A") of the Trust are available at and on .
Dream Office REIT is an unincorporated, open-ended real estate investment trust. Dream Office REIT is focused on owning, acquiring, leasing and managing well-located, high-quality central business district and suburban office properties. Its portfolio currently comprises approximately 17.2 million square feet of gross leasable area in major urban centres across Canada. Dream Office REIT''s portfolio is well diversified by geographic location and tenant mix. For more information, please visit our website at .
FOOTNOTES
Non-GAAP Measures
The Trust''s consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). In this press release, as a complement to results provided in accordance with IFRS, the Trust discloses and discusses certain non-GAAP financial measures, diluted FFO per unit, FFO per unit, FFO, NAV, NAV per unit, NOI, comparative properties NOI, interest coverage ratio, net debt-to-adjusted EBITDFV, net total debt-to-gross book value, net secured debt-to-gross book value, the stated values of investment properties included in our Strategic Plan segments and associated mortgages, as well as other measures discussed elsewhere in this release. These non-GAAP measures are not defined by IFRS, do not have a standardized meaning and may not be comparable with similar measures presented by other income trusts. The Trust has presented such non-GAAP measures as Management believes they are relevant measures of the Trust''s underlying operating performance and debt management. Non-GAAP measures should not be considered as alternatives to net income, cash generated from (utilized in) operating activities or comparable metrics determined in accordance with IFRS as indicators of the Trust''s performance, liquidity, cash flow, and profitability. For a full description of these measures and, where applicable, a reconciliation to the most directly comparable measure calculated in accordance with IFRS, please refer to the "Non-GAAP Measures and Other Disclosures" in Dream Office REIT''s MD&A for the three months and year ended December 31, 2016.
Forward looking information
This press release may contain forward-looking information within the meaning of applicable securities legislation, including statements regarding the future composition of our portfolio and the anticipated costs and savings from our cost reduction program. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream Office REIT''s control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, general and local economic and business conditions; the financial condition of tenants; our ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest and currency rate fluctuations. Our objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable, interest rates remain stable, conditions within the real estate market remain consistent, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forward-looking information in this press release speaks as of the date of this press release. Dream Office REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise except as required by law. Additional information about these assumptions and risks and uncertainties is contained in Dream Office REIT''s filings with securities regulators, including its latest annual information form and MD&A. These filings are also available at Dream Office REIT''s website at .
Contacts:
Dream Office Real Estate Investment Trust
P. Jane Gavan
Chief Executive Officer
(416) 365-6572
Dream Office Real Estate Investment Trust
Rajeev Viswanathan
Chief Financial Officer
(416) 365-8959
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Datum: 23.02.2017 - 17:06 Uhr
Sprache: Deutsch
News-ID 1488780
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