Inovalis Real Estate

INO.UN
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Inovalis Real Estate Investment Trust : Reports Financial Results for the First Quarter Ended March 31, 2019

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05/16/2019 | 04:00 am

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TORONTO, May 15, 2019 /CNW/ - Inovalis Real Estate Investment Trust (the "REIT") (TSX: INO.UN) today reported financial results for the quarter ended March 31, 2019.

Highlights include:

  • Acquired the Trio property in late March, 2019 for $69.5million at a capitalization rate of approximately 5.25%, partially financed with mortgage debt of $47.4 million bearing interest at 1.56%, which is expected to contribute significantly to future operating performance;

  • Refinanced the Métropolitian property with a $64.9 million 12-year finance lease bearing interest at 2.07% and retiring an existing finance lease of $51.3 million bearing interest at 2.43%;

  • Refinanced the Courbevoie property with a $14.3 million 12-year mortgage loan bearing interest at 2.13% and retiring a maturing 5-year mortgage loan of $11.6 million bearing interest 1.75%.

  • Completed the sale of the Hanover property in January 2019, net proceeds of which were utilized to fund the acquisition of the Trio Property, which is expected to be accretive to FFO and AFFO:

  • Due to the timing of the sale of Hanover in early January 2019 and the redeployment of capital at the end of March 2019, net income or loss, funds from operations ("FFO") and adjusted funds from operations ("AFFO") for the three months ended March 31, 2019 was negatively impacted by approximately $300,000 ($0.01 cents per unit);

  • Total assets increased to $641 million compared to $619 million three months ago;

  • Net loss for the three months ended March 31, 2019 was $1.7 million compared to a loss of $0.6 million for the same period in 2018 due to net change in fair value of exchangeable securities and promissory notes;

  • FFO for the three months ended March 31, 2019 was $4.9 million or 17 cents per unit;

  • AFFO for the three months ended March 31, 2019 was $5.4 million of 19 cents per unit.

Forward-Looking Information

This news release contains forward-looking information within the meaning of applicable securities legislation. Forward-looking information generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans", or "continue", or similar expressions suggesting future outcomes or events. Some of the specific forward-looking information may include, among other things, the REIT's expectations regarding its business , including the extent to which a property is expected to be accretive to FFO and AFFO per unit. 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 Inovalis' control that 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, global 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 functions; as well as the risk that the properties may not perform as anticipated. The REIT's objectives and forward-looking statements are based on certain assumptions, including that the Canadian and European economies remain 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 news release speaks as of the date of this news release. The 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 the REIT's filings with securities regulators, including its latest annual information form and MD&A.

"FFO" and "AFFO" are non-GAAP measures (see below).

Non-GAAP Measures

The REIT's consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). This press release contains references to financial measures, which may include "AFFO" and "FFO". These measures do not have a standardized meaning under IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. The REIT has presented such non-GAAP measures as management believes they are relevant measures of the REIT's underlying operating performance. Non-GAAP measures should not be considered as alternatives to net income, total comprehensive income or cash generated from (utilized in) operating activities as indicators of the REIT's performance, liquidity, cash flow, and profitability. For a full description of these measures and a reconciliation to the most directly comparable measure calculated in accordance with IFRS, please refer to "Non-GAAP Measures and Other Disclosures" in the REIT's most recent Management's Discussion and Analysis.

About Inovalis Real Estate Investment Trust
Inovalis Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been created for the purpose of acquiring and owning office properties primarily located in France and Germany but also opportunistically in other European countries where assets meet the REIT's investment criteria. The REIT currently owns interests in office properties in both France and Germany.

SOURCE Inovalis Real Estate Investment Trust

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