"We are very pleased with our performance. Our geographically diverse portfolio of open-air centres focused on essential needs retail continues to perform well. Our focus has clearly shifted from managing the effects of the pandemic to pursuing growth opportunities. We are progressing with a number of development projects, and are continuing to pursue additional development and redevelopment opportunities across our geography," said
Summary of Selected IFRS Financial Results | ||||||||
(CAD$000s, except percentages) | Three | Three | $ | % | Six | Six | $ | % |
Property rental revenue | 11.8% | 4.7% | ||||||
Net operating income (NOI) | 25.5% | 10.7% | ||||||
Net change in fair value of investment properties | ( | -- | ( | -- | ||||
Profit (loss) and total comprehensive income (loss) | ( | -- | ( | -- | ||||
Quarterly Highlights
- NOI was
$20.2 million , up$4.1 million (25.5%) from the same period in 2020, primarily as a result of growth in NOI from acquisitions and developments, lower operating expenses including lower bad debt expense, and lease buyout revenues. - Profit and total comprehensive income for the current quarter was
$19.6 million compared to a loss of$31.3 million in the prior year. The increase was mainly due to an increase in the fair value of investment properties recorded in Q2 2021 as a result of a decrease in the weighted average capitalization rate in the current quarter and appraisals obtained, compared to a decrease in fair value of investment properties recorded in Q2 2020.
Year-To-Date Highlights
- NOI was
$36.5 million , up$3.5 million (10.7%) from the same period in 2020, primarily as a result of growth in NOI from acquisitions and developments, lower operating expenses including lower bad debt expense, and lease buyout revenues. - Profit and total comprehensive income for the current year was
$31.8 million compared to a loss of$33.4 million in the prior year. The increase was mainly due to an increase in the fair value of investment properties recorded in the current year as a result of a decrease in the weighted average capitalization rate and appraisals obtained, compared to a decrease in fair value of investment properties recorded in the prior year.
Summary of Selected Non-IFRS Financial Results(1) | ||||||||
(CAD$000s, except percentages, units repurchased and per unit amounts) | Three | Three | $ | % | Six | Six | $ | % |
FFO | 64.8% | 32.6% | ||||||
FFO per unit | 64.9% | 33.3% | ||||||
FFO payout ratio | 55.2% | 91.0% | n/a | (39.3%) | 63.8% | 84.6% | n/a | (24.6%) |
AFFO | 58.4% | 34.2% | ||||||
AFFO per unit | 58.8% | 35.0% | ||||||
AFFO payout ratio | 64.6% | 102.3% | n/a | (36.9%) | 72.7% | 97.6% | n/a | (25.5%) |
Same-asset NOI | 5.5% | 1.3% | ||||||
Normal course issuer bid – units repurchased | 6,750 | 29,800 | n/a | n/a | 14,600 | 389,497 | n/a | n/a |
Committed occupancy – including non-consolidated investments(2) | 95.9% | 96.2% | n/a | (0.3%) | ||||
Same-asset committed occupancy(3) | 95.5% | 95.9% | n/a | (0.4%) | ||||
(1) | Refer to "Non-IFRS Financial Measures" below for further explanations. |
(2) | Excludes properties under development. |
(3) | Same-asset committed occupancy excludes properties under development and non-consolidated investments. |
Quarterly Highlights
- FFO & AFFO: For the three months ended
June 30, 2021 , FFO per unit increased by$0.050 (64.9%) compared to the prior year. FFO was impacted by an increase in NOI from acquisitions and developments, lower operating expenses including bad debt, a decrease in administrative costs due to lower salary expenses and lower travel costs, a decrease in finance costs mainly due to lower mortgage interest, and lease buyout revenue in the current quarter, partially offset by a decrease in NOI from property disposals. AFFO per unit was$0.040 (58.8%) higher than the prior year due to the changes in FFO noted above along with higher maintenance capital expenditures. In Q2 2020, maintenance capital expenditures were lower due to the pandemic, as leasing activity was curtailed and elective capital expenditures were deferred. Maintenance capital expenditures in Q2 2021 are higher due to additional leasing activity and completion of previously deferred elective capital expenditures. - Same-asset NOI increased by
$881 thousand (5.5%) mainly due to lower operating expenses, driven by lower bad debt expense in the current quarter.
Excluding the impact of COVID-related bad debt expense and write-offs, lease buyouts and insurance proceeds:
- FFO per unit for the quarter would have been 7.8% higher than the prior year. AFFO per unit for the quarter would have been 6.1% lower than the prior year due to higher maintenance capital expenditures incurred in the current quarter, as noted above.
- Same-asset NOI for the quarter would have been 2.7% lower than the prior year. This measure still includes certain other impacts of the COVID-19 pandemic on NOI, such as its impact on occupancy.
Year-To-Date Highlights
- FFO & AFFO: For the six months ended
June 30, 2021 , FFO per unit increased by$0.055 (33.3%) compared to the prior year. FFO was impacted by an increase in NOI from acquisitions and developments, lower operating expenses including bad debt, a decrease in administrative costs due to lower salary expenses and lower travel costs, a decrease in finance costs mainly due to lower mortgage interest, and lease buyout revenue in the current year, partially offset by a decrease in NOI from property disposals. AFFO per unit was$0.050 (35.0%) higher than the prior year due to the changes in FFO noted above along with lower leasing costs offset by higher maintenance capital expenditures, as noted in the quarterly highlights above. - Same-asset NOI increased by
$413 thousand (1.3%) mainly due to lower operating expenses, driven by lower bad debt expense in the current year.
Excluding the impact of COVID-related bad debt expense and write-offs, lease buyouts and insurance proceeds:
- FFO per unit for the year would have been 7.2% higher than the prior year, while AFFO per unit for the year would have been 3.4% higher than the prior year.
- Same-asset NOI for the year would have been 1.4% lower than the prior year. This measure still includes certain other impacts of the COVID-19 pandemic on NOI, such as its impact on occupancy.
COVID-19 Update
Plaza's focus on essential needs and value retail, as well as our presence in primary and strong secondary markets in
Rent collections have improved significantly since Q2 2020, and rent deferrals and abatements have decreased substantially, as follows:
Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | |
Gross rent collected from tenants | 98.5% | 99.1% | 99.4% | 95.2% | 89.2% |
CECRA – Federal and Quebec Government contribution | - | - | - | 2.9% | 4.0% |
Total collections including government contributions under CECRA | 98.5% | 99.1% | 99.4% | 98.1% | 93.2% |
CECRA – 25% Landlord write-off | - | - | - | 1.0% | 1.5% |
Rent abated | 0.4% | 0.2% | 0.2% | 0.4% | 2.6% |
Rent deferred with a definitive repayment schedule | 0.6% | 0.4% | - | 0.1% | 0.7% |
Remaining tenant accounts receivable(1) | 0.5% | 0.3% | 0.4% | 0.4% | 2.0% |
Totals | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
(1) | Remaining tenant accounts receivable excludes allowance for doubtful accounts. |
For deferred rent that was to be repaid in Q1 and Q2 2021, Plaza collected 97.5% of same.
Although the operating environment has improved significantly, and continues to improve, the uncertainty of subsequent waves of the COVID-19 pandemic may again impact Plaza's business and its tenants.
Further Information
Information appearing in this press release is a select summary of results. A more detailed analysis of the REIT's financial and operating results is included in the REIT's Management's Discussion and Analysis and Consolidated Financial Statements, which have been filed on SEDAR and can be viewed at www.sedar.com or on the REIT's website at www.plaza.ca.
Conference Call
A replay of the call will be available until August 13, 2021. To access the replay, dial 416-764-8677 (local
About Plaza
Plaza is an open-ended real estate investment trust and is a leading retail property owner and developer, focused on
Non-IFRS Financial Measures
This press release contains certain non-IFRS financial measures including FFO, AFFO and same-asset NOI. These measures are commonly used by entities in the real estate industry as useful metrics for measuring performance. However, they do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other publicly traded entities. These measures should be considered as supplemental in nature and not as a substitute for related financial information prepared in accordance with IFRS. Please refer to the REIT's Management's Discussion and Analysis for a reconciliation of these non-IFRS measures to standardized IFRS measures.
Cautionary Statements Regarding Forward-looking Information
This press release contains forward-looking statements relating to Plaza's operations, strategy, condition and the environment in which it operates, including those relating to Plaza's continued pursuit of development and redevelopment opportunities and its ability to continue to advance projects. Forward-looking statements are not future guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Plaza to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements contained in this press release, including but not limited to general economic and market factors, the duration and full impacts of COVID-19, and those described in Plaza's Annual Information Form for the year ended
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