Nexus REIT Announces Q2 2021 Results
Q2 2021 NOI of $12,219,905 was $1,654,192 higher than Q1 2021 NOI of $10,565,713.
TORONTO and MONTREAL, Aug. 12, 2021 (GLOBE NEWSWIRE) -- Nexus Real Estate Investment Trust (the "REIT") (TSX: NXR.UN) announced today its results for the quarter ended June 30, 2021.
Highlights
- Occupancy of 95% at June 30, 2021, increased from 94% at March 31, 2021 and June 30, 2020.
- Completed a total of $148.3MM of industrial property acquisitions during Q2 2021.
- The REIT has completed due diligence and waived conditions to acquire an industrial distribution centre property in Alberta for $19.75MMM. The REIT’s acquisition pipeline continues to be strong.
- Q2 2021 net operating income of $12,219,905 increased by $2,415,108 or 24.6% as compared to Q2 2020 net operating income of $9,804,797 and by $1,654,192 or 15.7% as compared to Q1 2021 net operating income of $10,565,713.
- Q2 2021 same property NOI of $9,599,238 decreased by $291,004 or 2.9% as compared Q2 2020. Q2 2021 YTD same property NOI decreased by $282,198 or 1.5% as compared Q2 2020 YTD. The decrease is primarily attributable to an approximately 26,000 square foot office space that came back to the REIT on April 30th, combined with an approximately 25,000 square foot industrial vacancy in Calgary.
- Successfully completed a $35MM bought deal financing on March 4, 2021. Commenced deployment of funds to acquire industrial properties in June 2021.
- Q2 2021 normalized FFO per unit of $0.185, as compared to $0.203 for Q1 2021 and $0.217 for Q2 2020.
- Q2 2021 normalized AFFO per unit of $0.166, as compared to $0.183 for Q1 2021 and $0.197 for Q2 2020.
- Q2 2021 normalized AFFO payout ratio of 96.2%, as compared to 87.7% for Q1 2021 and 79.8% for Q2 2020.
- Entered into a new $40MM revolving credit facility in the quarter. Ended Q2 2021 with $7MM of cash and full availability of $45MM of credit facilities.
- Book NAV per unit, including Class B LP Units, of $11.21 at June 30, 2021 as compared to $10.09 at March 31, 2021 and $9.87 at June 30, 2020.
- Management of the REIT will host a conference call on Thursday August 12th at 1PM EST to review results and operations.
“In the second quarter, we completed the $103.5MM off market acquisition of six properties in London, Ontario, satisfying 63% of the purchase price through the issuance of units. We were able to secure a $40MM revolving credit facility against three of the properties acquired, providing us liquidity to pursue further industrial acquisitions. In addition, we closed on three additional industrial acquisitions totalling $44.8MM in mid-June. The full benefit of these accretive acquisitions will be realized in the third and subsequent quarters. Subsequent to quarter end, we completed a further $75.75MM of industrial acquisitions in July. The London transaction and the equity raise completed in March of this year have provided us with the liquidity to continue building our industrial portfolio. Our per unit measures for the third and subsequent quarters will normalize and improve as we balance out our capital structure and continue to deploy our cash and available liquidity.” commented Kelly Hanczyk, the REIT’s Chief Executive Officer. “We have a strong pipeline of further potential acquisitions that we are in various stages of due diligence and negotiation on and we are well on our way towards exceeding the targets that we previously set for increasing our industrial weighting to over 75% of the REIT’s NOI. Overall, our operational results have been strong and consistent. We are excited about our growth prospects for the balance of the year as we continue our drive to be the next pure play industrial REIT.”
Summary of Results
Included in the tables that follow and elsewhere in this news release are non-IFRS measures that should not be construed as an alternative to net income / loss, cash from operating activities or other measures of financial performance calculated in accordance with IFRS and may not be comparable to similar measures as reported by other issuers. Readers are encouraged to refer to the REIT’s MD&A for further discussion of the non-IFRS measures presented.
| Three months ended June 30, |
Six months ended June 30, |
||||||
| 2021 | 2020 | 2021 | 2020 | ||||
| Financial Results | $ | $ | $ | $ | |||
| Property revenues | 18,715,147 | 15,040,989 | 35,302,871 | 30,633,748 | |||
| Net operating income (NOI) | 12,219,905 | 9,804,797 | 22,785,618 | 19,578,432 | |||
| Net income | 50,646,959 | 6,883,796 | 60,854,732 | 20,554,796 | |||
| Three months ended June 30, |
Six months ended June 30, |
||||||
| 2021 | 2020 | 2021 | 2020 | ||||
| Financial Highlights | $ | $ | $ | $ | |||
| Funds from operations (FFO) (1) | 8,917,474 | 7,664,119 | 15,601,527 | 13,947,751 | |||
| Normalized FFO (1) (2) | 8,953,357 | 7,162,290 | 16,274,736 | 14,055,852 | |||
| Adjusted funds from operations (AFFO) (1) | 8,000,608 | 6,996,139 | 13,954,204 | 12,586,398 | |||
| Normalized AFFO (1) (2) | 8,036,491 | 6,494,310 | 14,627,413 | 12,694,499 | |||
| Same property net operating income (1) | 9,599,238 | 9,890,242 | 18,753,316 | 19,035,514 | |||
| Distributions declared (3) | 7,730,623 | 5,179,529 | 13,507,670 | 10,221,314 | |||
| Weighted average units outstanding – basic (4) | 48,293,473 | 32,936,436 | 42,201,306 | 32,186,167 | |||
| Weighted average units outstanding – diluted (4) | 48,389,294 | 32,958,499 | 42,273,089 | 32,208,230 | |||
| Distributions per unit, basic and diluted (3) (4) | 0.160 | 0.157 | 0.320 | 0.318 | |||
| FFO per unit, basic (1) (4) | 0.185 | 0.233 | 0.370 | 0.433 | |||
| Normalized FFO per unit, basic (1) (2) (4) | 0.185 | 0.217 | 0.386 | 0.437 | |||
| AFFO per unit, basic (1) (4) | 0.166 | 0.212 | 0.331 | 0.391 | |||
| Normalized AFFO per unit, basic (1) (2) (4) | 0.166 | 0.197 | 0.347 | 0.394 | |||
| Normalized AFFO payout ratio, basic (1) (2) (3) | 96.2% | 79.8% | 92.3% | 80.5% | |||
| Debt to total assets ratio | 40.4% | 48.0% | 40.4% | 48.0% | |||
| NAV per unit (1) | 11.21 | 9.87 | 11.21 | 9.87 | |||
| (1) | Non-IFRS Measure |
| (2) | Normalized FFO and Normalized AFFO include adjustments for vendor rent obligation amounts related to the REIT’s Richmond and Ajax Properties, which are payable from the vendor of the property until the buildout of the property is complete and all tenants are occupying and paying rent. The vendor rent obligation amount is not included in NOI for IFRS accounting purposes. Normalized FFO and Normalized AFFO exclude amounts recorded in other income related to estimated future vendor rent obligation amounts. For the six months ended June 30, 2021, normalized FFO and AFFO are also adjusted to exclude $207,355 of one-time TSX listing fees related to graduation to the TSX, which are included in general and administrative expense in that period. |
| (3) | Includes distributions payable to holders of Class B LP Units which are accounted for as interest expense in the condensed consolidated interim financial statements. |
| (4) | Weighted average number of units includes the Class B LP Units. |
Revenues and Results from Operations
Q2 2021 NOI of $12,219,905 was $1,654,192 higher than Q1 2021 NOI of $10,565,713. Properties acquired in Q2 2021 and part way through Q1 2021 generated incremental NOI of approximately $1,650,000 in Q2 2021 as compared to Q1 2021. Partially offsetting was lower same store NOI of approximately $160,000 primarily resulting from an approximately 26,000 square foot lease expiry at a REIT office property in St. John, New Brunswick. Subsequent to the quarter end, 5,231 sf of this space was leased. Occupancy increased to 95% at June 30, 2021 compared to 94% at March 31, 2021 and June 30, 2020.
Fair value adjustments of investment properties of $68,987,495 were recorded in Q2 2021 relating primarily to the revaluation of the Richmond, BC Property, where buildout is nearing completion and tenant leases will soon commence, revaluation of certain of the REIT’s industrial properties, and revaluation of a property held for sale, and a property for which the REIT has received an offer to purchase excess land
Earnings Call
Management of the REIT will host a conference call at 1:00 PM Eastern Standard Time on Thursday August 12, 2021 to review the financial results and operations. To participate in the conference call, please dial 416-915-3239 or 1-800-319-4610 (toll free in Canada and the US) at least five minutes prior to the start time and ask to join the Nexus REIT conference call.
A recording of the conference call will be available until September 12, 2021. To access the recording, please dial 604-674-8052 or 1-855-669-9658 (toll free in Canada and the US) and enter access code 7494.
About Nexus REIT
Nexus is a growth-oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership and management of industrial, office and retail properties located in primary and secondary markets in North America. The REIT currently owns a portfolio of 89 properties comprising approximately 6.6 million square feet of gross leasable area. The REIT has approximately 33,788,000 Units issued and outstanding. Additionally, there are Class B LP Units of subsidiary limited partnerships of Nexus issued and outstanding, which are convertible into approximately 16,442,000 Units.
Forward Looking Statements
Certain statements contained in this news release constitute forward-looking statements which reflect the REIT’s current expectations and projections about future results. Often, but not always, 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 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 expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Such forward-looking statements are based on a number of assumptions that may prove to be incorrect.
While the REIT anticipates that subsequent events and developments may cause its views to change, the REIT specifically disclaims any obligation to update these forward-looking statements except as required by applicable law. These forward-looking statements should not be relied upon as representing the REIT’s views as of any date subsequent to the date of this news release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the REIT.
For further information please contact:
Kelly C. Hanczyk, CEO at (416) 906-2379 or
Rob Chiasson, CFO at (416) 613-1262.
