Canada NewsWire
MISSISSAUGA, Feb. 20, 2020
MISSISSAUGA, Feb. 20, 2020 /CNW/ - Morguard Corporation ("Morguard" or the "Company") (TSX:MRC) today announced its financial results for the year ended December 31, 2019.
Reporting Highlights
Operational and Balance Sheet Highlights
Financial Highlights
For the years ended December 31 | ||
(in thousands of dollars, except per common share) | 2019 | 2018 |
Revenue from real estate properties | $872,223 | $841,497 |
Revenue from hotel properties | 245,282 | 237,938 |
Management and advisory fees | 52,401 | 62,096 |
Interest and other income | 17,294 | 10,947 |
Sales of product and land | 5,773 | 5,400 |
Total revenue | $1,192,973 | $1,157,878 |
Revenue from real estate properties | $872,223 | $841,497 |
Revenue from hotel properties | 245,282 | 237,938 |
Land rent arbitration settlement | - | 17,250 |
Property operating expenses | (371,596) | (368,222) |
Hotel operating expenses | (189,728) | (180,488) |
Net operating income | $556,181 | $547,975 |
Net income attributable to common shareholders | $186,939 | $319,851 |
Net income per common share – basic and diluted | $16.57 | $27.96 |
Funds from operations | $250,871 | $232,396 |
FFO per common share – basic and diluted | $22.23 | $20.32 |
Normalized funds from operations | $228,100 | $217,728 |
Normalized FFO per common share – basic and diluted | $20.21 | $19.04 |
Acquisitions and Dispositions Completed During 2019
The following table presents a summary of the Company's acquisitions totalling $320.1 million during the year ended December 31, 2019.
Property | Date of | Asset Type | Location | Suites / | Purchase Price |
99 Metcalfe Street | July 24, 2019 | Office | Ottawa, ON | 157,000 | $53,130 |
Marquee at Block 37 | December 9, 2019 | Residential | Chicago, IL | 352 | 180,237 |
Mississauga City Centre | December 19, 2019 | Office | Mississauga, ON | 398,500 | 86,694 |
$320,061 |
The following table presents a summary of the Company's net proceeds from dispositions totalling $53.3 million during the year ended December 31, 2019.
Property | Date of Disposition | Asset Type | Suites / | Proceeds | Net Proceeds (1) |
Villages of Willamsburg | February 1, 2019 | Residential | 194 | $13,510 | $6,530 |
Steeplechase | March 19, 2019 | Residential | 192 | 15,062 | 5,645 |
Magnolia Place | March 19, 2019 | Residential | 148 | 8,208 | 2,274 |
Garden Lane | March 27, 2019 | Residential | 261 | 22,601 | 11,270 |
Colonial Manor | April 30, 2019 | Residential | 48 | 4,428 | 1,576 |
2 Rue St. Augustin | June 21, 2019 | Industrial | 10,000 | 90 | 90 |
825 Des Érables | July 31, 2019 | Industrial | 242,521 | 15,914 | 15,914 |
Westgate Shopping Center | December 30, 2019 | Retail | 167,500 | 10,023 | 10,023 |
$89,836 | $53,322 |
(1) | Net of repayment and mortgages assumed. |
Net Income
Net income for the year ended December 31, 2019, was $188.8 million compared to net income of $344.1 million in 2018. The decrease in net income of $155.3 million for the year ended December 31, 2019, was primarily due to the following:
Net Operating Income
NOI increased by $8.2 million, or 1.5%, during the year ended December 31, 2019, to $556.2 million, compared to $548.0 million generated in 2018, and is further analyzed by asset type below.
For the years ended December 31 | |||||
(in thousands of dollars) | 2019 | 2018 | |||
Multi-suite residential | $212,039 | $201,160 | |||
Retail | 143,458 | 132,743 | |||
Office | 136,480 | 129,454 | |||
Industrial | 8,795 | 9,394 | |||
Hotel | 55,554 | 57,450 | |||
Adjusted NOI | 556,326 | 530,201 | |||
Land rent arbitration settlement | - | 17,250 | |||
IFRIC 21 adjustment – multi-suite residential | (134) | 498 | |||
IFRIC 21 adjustment – retail | (11) | 26 | |||
NOI | $556,181 | $547,975 | |||
NOI for the year ended December 31, 2019, decreased by $17.3 million due to the land rent arbitration settlement which resulted in a reversal of previously expensed land rent for the period from July 1, 2010 to April 30, 2018.
Adjusted NOI for the year ended December 31, 2019, increased by $26.1 million to $556.3 million compared to $530.2 million in 2018 primarily due to the following:
Funds From Operations
For the year ended December 31, 2019, the Company recorded FFO of $250.9 million ($22.23 per common share), compared to $232.4 million ($20.32 per common share) in 2018. The increase in FFO of $18.5 million is mainly due to the following:
The change in foreign exchange rates had a positive impact on FFO of $1.3 million ($0.11 per common share).
Normalized FFO for the year ended December 31, 2019, was $228.1 million, or $20.21 per common share, versus $217.7 million, or $19.04 per common share, for the same period in 2018, which represents an increase of $10.4 million or 4.8%. Normalized FFO is computed as FFO adjusted for the impact of non-recurring items net of tax.
Subsequent Events
Temple has entered into a definitive agreement with Morguard pursuant to which Morguard will acquire all of the outstanding common shares of Temple not currently owned by Morguard. The transaction will be effected by way of a court-approved plan of arrangement under the Canada Business Corporations Act. The agreement provides that Temple shareholders, excluding Morguard, will receive $2.10 per common share from Morguard. A meeting of Temple shareholders was held February 10, 2020, whereat Temple shareholders approved a special resolution approving the acquisition by Morguard of all of the issued and outstanding common shares of Temple not already owned by Morguard. The arrangement agreement was completed on February 18, 2020, and subsequently on February 19, 2020, Temple de-listed from the TSX.
On February 19, 2020, the Company repaid three mortgage loans with an aggregate principal balance of $35.5 million, secured against four properties. The repayment resolves three of the five mortgage loans currently in default resulting from non-compliance of a Temple corporate debt service coverage ratio.
First Quarter Dividend
The Board of Directors of Morguard Corporation announced that the first quarterly, eligible dividend of 2020 in the amount of $0.15 per common share will be paid on March 31, 2020, to shareholders of record at the close of business on March 13, 2020.
The Company's audited financial statements for the year ended December 31, 2019, along with Management's Discussion and Analysis will be available on the Company's website at www.morguard.com and will be filed with SEDAR at www.sedar.com.
Non-IFRS Measures
The Company's consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). The following measures, NOI, Adjusted NOI, Comparative NOI, FFO and Normalized FFO (collectively, the "non-IFRS measures") as well as other measures discussed elsewhere in this press release, do not have a standardized meaning prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other reporting issuers in similar or different industries. The Company uses these measures to better assess the Company's underlying performance and financial position and provides these additional measures so that investors may do the same. Details on non-IFRS measures are set out in the Company's Management's Discussion and Analysis for the year ended December 31, 2019 and available on the Company's profile on SEDAR at www.sedar.com.
About Morguard Corporation
Morguard Corporation is a real estate company, with total assets owned and under management valued at $21.3 billion. Morguard owns a diversified portfolio of 207 multi-suite residential, retail, office, industrial and hotel properties comprised of 17,637 residential suites, approximately 17.2 million square feet of commercial leasable space and 5,903 hotel rooms. Morguard also currently owns a 58.5% interest in Morguard Real Estate Investment Trust and a 44.8% effective interest in Morguard North American Residential Real Estate Investment Trust. Morguard also provides advisory and management services to institutional and other investors. For more information, visit the Company's website at www.morguard.com.
SOURCE Morguard Corporation
View original content: http://www.newswire.ca/en/releases/archive/February2020/20/c8520.html
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