Granite Announces 2024 Third Quarter Results and a 3.03% Distribution Increase Commencing in December 2024
Granite Real Estate Investment Trust reported strong Q3 2024 results with notable financial improvements. Net operating income reached $119.6 million, up from $109.2 million year-over-year. FFO increased to $85.2 million ($1.35 per unit) from $79.1 million ($1.24 per unit). The company achieved a 31% average rental rate spread on new leases and renewals. Occupancy stood at 94.3% with committed occupancy at 94.7%. The Trust announced a 3.03% distribution increase to $3.40 per unit effective December 2024. Notable developments include completing two facility expansions in Ajax, Ontario and Weert, Netherlands.
Granite Real Estate Investment Trust ha riportato risultati forti per il terzo trimestre del 2024, con miglioramenti finanziari notevoli. Il reddito operativo netto ha raggiunto 119,6 milioni di dollari, in aumento rispetto ai 109,2 milioni dell'anno precedente. L'FFO è aumentato a 85,2 milioni di dollari (1,35 dollari per unità) rispetto ai 79,1 milioni di dollari (1,24 dollari per unità). L'azienda ha registrato uno spread medio del 31% sulle nuove locazioni e sulle rinegoziazioni. L'occupazione si attesta al 94,3% con un'occupazione impegnata al 94,7%. Il Trust ha annunciato un aumento della distribuzione del 3,03% a 3,40 dollari per unità, con effetto da dicembre 2024. Sviluppi notevoli comprendono il completamento di due ampliamenti di strutture ad Ajax, Ontario e Weert, Paesi Bassi.
Granite Real Estate Investment Trust reportó resultados sólidos en el tercer trimestre de 2024, con mejoras financieras notables. Los ingresos operativos netos alcanzaron los 119.6 millones de dólares, frente a los 109.2 millones del año anterior. El FFO aumentó a 85.2 millones de dólares (1.35 dólares por unidad) desde los 79.1 millones de dólares (1.24 dólares por unidad). La compañía logró un margen promedio del 31% en nuevas rentas y renovaciones. La ocupación se ubicó en el 94.3%, con una ocupación comprometida del 94.7%. El Trust anunció un aumento en la distribución del 3.03% a 3.40 dólares por unidad, efectivo a partir de diciembre de 2024. Entre los desarrollos notables se incluyen la finalización de dos ampliaciones de instalaciones en Ajax, Ontario y Weert, Países Bajos.
Granite Real Estate Investment Trust는 2024년 3분기에 강력한 실적을 발표했으며, 주목할 만한 재무 개선을 보였습니다. 순 운영 소득은 1억 1960만 달러를 기록하여, 전년 대비 1억 920만 달러에서 증가했습니다. FFO는 8520만 달러(단위당 1.35달러)로 증가했으며, 이전에는 7910만 달러(단위당 1.24달러)에 불과했습니다. 회사는 새로운 임대 및 갱신에서 평균 31%의 임대료 차이를 달성했습니다. 점유율은 94.3%로, 전념 점유율은 94.7%에 달합니다. Trust는 2024년 12월부터 단위당 3.40달러로 3.03%의 배당금 인상을 발표했습니다. 주목할 만한 개발 사항으로는 온타리오주 Ajax와 네덜란드 Weert에 있는 두 개의 시설 확장을 완료한 것입니다.
Granite Real Estate Investment Trust a rapporté de solides résultats pour le troisième trimestre de 2024, avec des améliorations financières notables. Le revenu net d'exploitation a atteint 119,6 millions de dollars, contre 109,2 millions de dollars l'année précédente. Le FFO a augmenté à 85,2 millions de dollars (1,35 dollar par unité) contre 79,1 millions de dollars (1,24 dollar par unité) précédemment. La société a réalisé un écart moyen de 31 % sur les nouveaux baux et les renouvellements. Le taux d'occupation était de 94,3 % avec un taux d'occupation engagé de 94,7 %. Le Trust a annoncé une augmentation de distribution de 3,03 % à 3,40 dollars par unité, effective à partir de décembre 2024. Parmi les développements notables, on comptabilise la finalisation de deux agrandissements d'installations à Ajax, Ontario et Weert, Pays-Bas.
Granite Real Estate Investment Trust hat starke Ergebnisse für das dritte Quartal 2024 gemeldet, mit bemerkenswerten finanziellen Verbesserungen. Der Netto-Betriebsgewinn erreichte 119,6 Millionen Dollar, ein Anstieg von 109,2 Millionen Dollar im Jahresvergleich. Das FFO stieg auf 85,2 Millionen Dollar (1,35 Dollar pro Einheit) von zuvor 79,1 Millionen Dollar (1,24 Dollar pro Einheit). Das Unternehmen erzielte eine durchschnittliche Mietpreisdifferenz von 31% bei neuen Mietverträgen und Verlängerungen. Die Belegungsquote lag bei 94,3% und die verpflichtete Belegung bei 94,7%. Der Trust kündigte eine Erhöhung der Ausschüttung um 3,03% auf 3,40 Dollar pro Einheit an, gültig ab Dezember 2024. Erwähnenswerte Entwicklungen umfassen den Abschluss von zwei Erweiterungen in Ajax, Ontario, und Weert, Niederlande.
- NOI increased by $10.4 million year-over-year to $119.6 million
- FFO per unit grew to $1.35 from $1.24 year-over-year
- 31% average rental rate spreads achieved on new leases
- Same property NOI increased by 6.2% on cash basis
- 3.03% distribution increase announced
- Net fair value gains of $42.6 million on investment properties
- AFFO payout ratio improved to 68% from 73% year-over-year
- Occupancy decreased to 94.3% from 95.0% in December 2023
- Weighted average lease term decreased to 5.9 years from 6.2 years
Insights
The Q3 2024 results demonstrate solid operational performance with several positive indicators. NOI increased by $10.4M to $119.6M, while FFO grew to $85.2M ($1.35 per unit) from $79.1M. The same property NOI rose by
Key positives include successful leasing activity with
The balance sheet remains solid with a
THIRD QUARTER 2024 HIGHLIGHTS
Highlights for the three month period ended September 30, 2024 are set out below:
Financial:
-
Granite's net operating income ("NOI") was
in the third quarter of 2024 compared to$119.6 million in the prior year period, an increase of$109.2 million primarily as a result of the completion of two development projects in$10.4 million Canada andthe United States , the completion of two expansion projects inCanada andNetherlands in the third quarter of 2024, contractual rent adjustments and consumer price index based increases, and renewal leasing activity; -
Same property NOI - cash basis(4) increased by
6.2% for the third quarter of 2024, excluding the impact of foreign exchange; -
Funds from operations ("FFO")(1) was
($85.2 million per unit) in the third quarter of 2024 compared to$1.35 ($79.1 million per unit) in the third quarter of 2023;$1.24 -
Adjusted funds from operations ("AFFO")(2) was
($76.6 million per unit) in the third quarter of 2024 compared to$1.22 ($69.6 million per unit) in the third quarter of 2023;$1.09 -
During the three month period ended September 30, 2024, the Canadian dollar weakened against the Euro and the US dollar, respectively, relative to the prior year period. The impact of foreign exchange on FFO for the three month period ended September 30, 2024, relative to the same period in 2023, was
per unit, and for AFFO, the impact of foreign exchange relative to the same period in 2023 was$0.02 per unit;$0.02 -
AFFO payout ratio(3) was
68% for the third quarter of 2024 compared to73% in the third quarter of 2023; -
Occupancy as at September 30, 2024 and committed occupancy as at November 6, 2024 are
94.3% and94.7% , respectively; -
Granite recognized
in net fair value gains on investment properties in the third quarter of 2024, which were primarily attributable to the lease renewal of a property in the GTA and fair market rent increases at select properties in the$42.6 million U.S. , partially offset by the expansion in the discount and terminal capitalization rates at select properties in Granite’sU.S. markets; -
Granite's net income attributable to stapled unitholders in the third quarter of 2024 was
in comparison to$111.6 million in the prior year period primarily due to a positive change in the fair value of investment properties of$33.1 million and a$95.8 million increase in net operating income as noted above, partially offset by a$10.4 million increase in income tax expense;$20.1 million - On October 1, 2024, Granite completed the uncoupling of its stapled unit structure by replacing it with a conventional REIT trust unit structure (the “Arrangement”). As a result of and immediately following the Arrangement, each Granite unitholder held a number of Granite Real Estate Investment Trust (“Granite REIT”) units equal to the number of stapled units held prior to completion of the Arrangement, and Granite REIT Inc. has become a wholly-owned subsidiary of Granite REIT. On October 3, 2024, the stapled units were delisted from the TSX and the NYSE, and the Granite REIT units trade on the TSX and the NYSE under the same ticker symbols “GRT.UN” and “GRP.U”, respectively. In connection with the completion of the Arrangement, Granite REIT Inc. applied to cease to be a reporting issuer and ceased to be a reporting issuer on November 4, 2024. Further information on the Arrangement, including Canadian and US tax implications can be found at www.granitereit.com/unwind-of-stapled-unit-structure; and
-
On November 6, 2024, Granite increased its targeted annualized distribution by
3.03% to ($3.40 per month) per unit from$0.28 33 ($3.30 per month) per unit to be effective upon the declaration of the distribution in respect of the month of December 2024 and payable in mid-January 2025.$0.27 50
Developments and expansions:
-
On August 1, 2024, Granite completed the 49,000 square foot expansion of its approximate 100,000 square foot industrial facility in
Ajax, Ontario . Upon completion, a ten-year lease commenced for approximately 29,000 square feet; and -
On August 30, 2024, Granite completed the 52,000 square foot expansion of its approximate 238,000 square foot modern distribution facility in Weert,
Netherlands . As a result of the expansion completion, the tenant has committed to a new ten-year term for the entire expanded facility.
Operations:
-
During the third quarter of 2024, Granite achieved average rental rate spreads of
31% over expiring rents representing approximately 1,609,000 square feet of new leases and renewals completed in the quarter; -
During the third quarter of 2024, at one of Granite's properties in
Mississauga, Ontario , the tenant committed to a five year lease extension for the entire 773,300 square foot facility, for a lease that is expiring in 2025; and -
Subsequent to the third quarter of 2024, Granite signed a lease for 307,800 square feet at one of its vacant units at a property in
Olive Branch, Mississippi , commencing in October 2024 for a lease term of 5.1 years.
Financing:
-
On October 4, 2024, Granite REIT Holdings Limited Partnership ("Granite LP") completed an offering of
aggregate principal amount of senior unsecured debentures in two series (the “Offering”), which includes (i)$800 million aggregate principal amount of$250 million 3.999% Series 8 senior unsecured debentures due October 4, 2029 (the "October 2029 Debentures"); and (ii) aggregate principal amount of$550 million 4.348% Series 9 senior unsecured debentures due October 4, 2031 (the "2031 Debentures"). The October 2029 Debentures and the 2031 Debentures are guaranteed by Granite REIT and Granite REIT Inc. Granite LP intends to use the remaining net proceeds from the Offering to refinance existing debt, including itsUS senior unsecured non-revolving term facility, to be repaid upon maturity on December 19, 2024, and for general corporate purposes;$185 million -
On October 4, 2024, Granite LP also entered into a cross currency interest rate swap to exchange the Canadian dollar denominated principal and interest payments related to the October 2029 Debentures for Euro denominated principal and interest payments, resulting in an effective fixed interest rate of
3.494% for the five year term of the October 2029 Debentures; and -
On October 4, 2024, Granite LP repaid in full the outstanding
US aggregate principal amount of the 2025 Term Loan, which had a maturity date of September 15, 2025, using the net proceeds from the Offering. The 2025 Term Loan was fully prepayable without penalty. In conjunction with the repayment, the 2025 Interest Rate Swap was terminated and the related mark to market asset was settled on October 4, 2024.$400.0 million
GRANITE’S FINANCIAL, OPERATING AND PROPERTY HIGHLIGHTS |
|||||||||||||
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Three Months Ended
|
|
Nine Months Ended
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||||||||||
(in millions, except as noted) |
|
|
|
|
|
||||||||
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
||||||||
Revenue |
$ |
141.9 |
|
$ |
131.5 |
|
|
$ |
421.1 |
|
$ |
391.4 |
|
Net operating income ("NOI") |
$ |
119.6 |
|
$ |
109.2 |
|
|
$ |
350.8 |
|
$ |
325.2 |
|
Net income attributable to stapled unitholders |
$ |
111.6 |
|
$ |
33.1 |
|
|
$ |
276.9 |
|
$ |
105.3 |
|
Funds from operations ("FFO")(1) |
$ |
85.2 |
|
$ |
79.1 |
|
|
$ |
251.2 |
|
$ |
236.3 |
|
Adjusted funds from operations ("AFFO")(2) |
$ |
76.6 |
|
$ |
69.6 |
|
|
$ |
228.4 |
|
$ |
214.1 |
|
Diluted FFO per stapled unit(1) |
$ |
1.35 |
|
$ |
1.24 |
|
|
$ |
3.97 |
|
$ |
3.70 |
|
Diluted AFFO per stapled unit(2) |
$ |
1.22 |
|
$ |
1.09 |
|
|
$ |
3.61 |
|
$ |
3.35 |
|
Monthly distributions paid per stapled unit |
$ |
0.83 |
|
$ |
0.80 |
|
|
$ |
2.48 |
|
$ |
2.40 |
|
AFFO payout ratio(3) |
|
68 |
% |
|
73 |
% |
|
|
68 |
% |
|
71 |
% |
|
|
|
|
|
|
||||||||
As at September 30, 2024 and December 31, 2023 |
|
|
|
|
2024 |
|
|
2023 |
|
||||
Fair value of investment properties |
|
|
|
$ |
9,094.5 |
|
$ |
8,808.1 |
|
||||
Cash and cash equivalents |
|
|
|
$ |
133.5 |
|
$ |
116.1 |
|
||||
Total debt(5) |
|
|
|
$ |
3,080.5 |
|
$ |
2,998.4 |
|
||||
Net leverage ratio(6) |
|
|
|
|
32 |
% |
|
33 |
% |
||||
Number of income-producing properties |
|
|
|
|
138 |
|
|
137 |
|
||||
Gross leasable area (“GLA”), square feet |
|
|
|
|
63.3 |
|
|
62.9 |
|
||||
Occupancy, by GLA |
|
|
|
|
94.3 |
% |
|
95.0 |
% |
||||
Committed occupancy, by GLA(9) |
|
|
|
|
94.7 |
% |
NA |
||||||
Magna as a percentage of annualized revenue(8) |
|
|
|
|
27 |
% |
|
26 |
% |
||||
Magna as a percentage of GLA |
|
|
|
|
19 |
% |
|
19 |
% |
||||
Weighted average lease term in years, by GLA |
|
|
|
|
5.9 |
|
|
6.2 |
|
||||
Overall capitalization rate(7) |
|
|
|
|
5.3 |
% |
|
5.2 |
% |
A more detailed discussion of Granite’s combined financial results for the three and nine month periods ended September 30, 2024 and 2023 is contained in Granite’s Management’s Discussion and Analysis of Results of Operations and Financial Position ("MD&A") and the unaudited condensed combined financial statements for those periods and the notes thereto, which are available through the internet on the Canadian Securities Administrators’ System for Electronic Data Analysis and Retrieval Plus (“SEDAR+”) and can be accessed at www.sedarplus.ca and on the United States Securities and Exchange Commission’s (the “SEC”) Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”), which can be accessed at www.sec.gov.
ENVIRONMENTAL, SOCIAL, GOVERNANCE + RESILIENCE (ESG+R)
Granite completed its fifth annual GRESB Real Estate Assessment in the third quarter of 2024. GRESB’s 2024 results were published in October 2024 and Granite ranked 1st out of 7 in the Northern America | Industrial | Listed | Tenant Controlled peer group. In 2024, Granite’s score decreased by 2 points (
2024 OUTLOOK
For 2024 outlook, Granite’s FFO per unit forecast remains unchanged at
Non-IFRS measures are included in Granite’s 2024 forecasts above (see “NON-IFRS PERFORMANCE MEASURES”). See also “FORWARD-LOOKING STATEMENTS”.
CONFERENCE CALL
Granite will hold a conference call and live audio webcast to discuss its financial results. The conference call will be chaired by Kevan Gorrie, President and Chief Executive Officer.
Date: |
Thursday, November 7, 2024 at 11:00 a.m. (ET) |
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Telephone: |
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International (Toll): 1-785-424-1789 |
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Conference ID/Passcode: | REIT |
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Webcast: | To access the live audio webcast in listen-only mode, please visit |
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To hear a replay of the webcast, please visit https://granitereit.com/events. The replay will be available for 90 days.
OTHER INFORMATION
Additional property statistics as at September 30, 2024 have been posted to our website at https://granitereit.com/property-statistics-q3-2024. Copies of financial data and other publicly filed documents are available through the internet on SEDAR+, which can be accessed at www.sedarplus.ca and on EDGAR, which can be accessed at www.sec.gov.
Granite is a Canadian-based REIT engaged in the acquisition, development, ownership and management of logistics, warehouse and industrial properties in
For further information, please see our website at www.granitereit.com or contact Teresa Neto, Chief Financial Officer, at (647) 925-7560.
NON-IFRS MEASURES, RATIOS AND RECONCILIATIONS
Readers are cautioned that certain terms used in this press release such as FFO, AFFO, FFO payout ratio, AFFO payout ratio, same property NOI - cash basis, constant currency same property NOI - cash basis, total debt and net debt, net leverage ratio, and any related per unit amounts used by management to measure, compare and explain the operating results and financial performance of the Trust do not have standardized meanings prescribed under International Financial Reporting Standards (“IFRS”) and, therefore, should not be construed as alternatives to net income, cash provided by operating activities or any other measure calculated in accordance with IFRS. Additionally, because these terms do not have a standardized meaning prescribed by IFRS, they may not be comparable to similarly titled measures presented by other publicly traded entities.
(1) FFO is a non-IFRS performance measure that is widely used by the real estate industry in evaluating the operating performance of real estate entities. Granite calculates FFO as net income attributable to stapled unitholders excluding fair value gains (losses) on investment properties and financial instruments, gains (losses) on sale of investment properties including the associated current income tax, deferred income taxes, corporate restructuring costs and certain other items, net of non-controlling interests in such items. The Trust’s determination of FFO follows the definition prescribed by the Real Estate Property Association of
(2) AFFO is a non-IFRS performance measure that is widely used by the real estate industry in evaluating the recurring economic earnings performance of real estate entities after considering certain costs associated with sustaining such earnings. Granite calculates AFFO as net income attributable to stapled unitholders including all adjustments used to calculate FFO and further adjusts for actual maintenance capital expenditures that are required to sustain Granite’s productive capacity, leasing costs such as leasing commissions and tenant allowances incurred and non-cash straight-line rent and tenant incentive amortization, net of non-controlling interests in such items. The Trust's determination of AFFO follows the definition prescribed by the REALPAC Guidelines except for the exclusion of corporate restructuring costs as noted above. Granite considers AFFO to be a meaningful supplemental measure that can be used to determine the Trust’s ability to service debt, fund expansion capital expenditures, fund property development and provide distributions to stapled unitholders after considering costs associated with sustaining operating earnings. AFFO is also reconciled to net income, which is the most directly comparable IFRS measure (see table below). AFFO should not be construed as an alternative to net income or cash flow provided by operating activities determined in accordance with IFRS.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||
(in millions, except per unit amounts) |
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
Net income attributable to stapled unitholders |
|
$ |
111.6 |
|
$ |
33.1 |
|
|
$ |
276.9 |
|
$ |
105.3 |
|
Add (deduct): |
|
|
|
|
|
|
||||||||
Fair value (gains) losses on investment properties, net |
|
|
(42.6 |
) |
|
53.2 |
|
|
|
(54.5 |
) |
|
139.7 |
|
Fair value losses on financial instruments, net |
|
|
2.9 |
|
|
2.5 |
|
|
|
7.4 |
|
|
1.9 |
|
Loss on sale of investment properties |
|
|
— |
|
|
0.9 |
|
|
|
— |
|
|
1.5 |
|
Deferred tax expense (recovery) |
|
|
9.3 |
|
|
(10.3 |
) |
|
|
18.5 |
|
|
(17.2 |
) |
Fair value remeasurement of the Executive Deferred Stapled Unit Plan |
|
|
1.4 |
|
|
(0.7 |
) |
|
|
0.5 |
|
|
3.5 |
|
Fair value remeasurement of the Directors Deferred Stapled Unit Plan |
|
|
1.8 |
|
|
(0.5 |
) |
|
|
0.6 |
|
|
0.4 |
|
Corporate restructuring costs(1) |
|
|
0.7 |
|
|
— |
|
|
|
1.8 |
|
|
— |
|
Non-controlling interests relating to the above |
|
|
0.1 |
|
|
0.9 |
|
|
|
— |
|
|
1.2 |
|
FFO |
[A] |
$ |
85.2 |
|
$ |
79.1 |
|
|
$ |
251.2 |
|
$ |
236.3 |
|
Add (deduct): |
|
|
|
|
|
|
||||||||
Maintenance or improvement capital expenditures incurred |
|
|
(3.7 |
) |
|
(4.5 |
) |
|
|
(10.1 |
) |
|
(6.8 |
) |
Leasing costs |
|
|
(1.5 |
) |
|
(0.8 |
) |
|
|
(2.0 |
) |
|
(3.1 |
) |
Tenant allowances |
|
|
— |
|
|
(1.4 |
) |
|
|
(1.6 |
) |
|
(2.4 |
) |
Tenant incentive amortization |
|
|
— |
|
|
1.1 |
|
|
|
0.1 |
|
|
3.3 |
|
Straight-line rent amortization |
|
|
(3.4 |
) |
|
(4.0 |
) |
|
|
(9.2 |
) |
|
(13.6 |
) |
Non-controlling interests relating to the above |
|
|
— |
|
|
0.1 |
|
|
|
— |
|
|
0.4 |
|
AFFO |
[B] |
$ |
76.6 |
|
$ |
69.6 |
|
|
$ |
228.4 |
|
$ |
214.1 |
|
Basic FFO per stapled unit |
[A]/[C] |
$ |
1.36 |
|
$ |
1.24 |
|
|
$ |
3.99 |
|
$ |
3.71 |
|
Diluted FFO per stapled unit |
[A]/[D] |
$ |
1.35 |
|
$ |
1.24 |
|
|
$ |
3.97 |
|
$ |
3.70 |
|
Basic AFFO per stapled unit |
[B]/[C] |
$ |
1.22 |
|
$ |
1.09 |
|
|
$ |
3.63 |
|
$ |
3.36 |
|
Diluted AFFO per stapled unit |
[B]/[D] |
$ |
1.22 |
|
$ |
1.09 |
|
|
$ |
3.61 |
|
$ |
3.35 |
|
Basic weighted average number of stapled units |
[C] |
|
62.7 |
|
|
63.7 |
|
|
|
63.0 |
|
|
63.7 |
|
Diluted weighted average number of stapled units |
[D] |
|
63.0 |
|
|
63.9 |
|
|
|
63.3 |
|
|
63.9 |
|
(1) | Effective January 1, 2024, Granite amended its definition of Funds From Operations (FFO) to exclude corporate restructuring costs associated with the uncoupling of the Trust’s stapled unit structure (refer to “NON-IFRS PERFORMANCE MEASURES” in the MD&A). See also “SIGNIFICANT MATTERS - STAPLED UNIT STRUCTURE” in the MD&A. Granite views these restructuring costs as non-recurring, as they are solely related to this specific transaction and do not reflect normal operating activities. |
(3) The FFO and AFFO payout ratios are calculated as monthly distributions, which exclude special distributions, declared to unitholders divided by FFO and AFFO (non-IFRS performance measures), respectively, in a period. FFO payout ratio and AFFO payout ratio may exclude revenue or expenses incurred during a period that can be a source of variance between periods. The FFO payout ratio and AFFO payout ratio are supplemental measures widely used by investors in evaluating the sustainability of the Trust’s monthly distributions to stapled unitholders.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||
(in millions, except as noted) |
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
Monthly distributions declared to unitholders |
[A] |
$ |
51.8 |
|
$ |
51.0 |
|
|
$ |
156.0 |
|
$ |
153.0 |
|
FFO |
[B] |
|
85.2 |
|
|
79.1 |
|
|
|
251.2 |
|
|
236.3 |
|
AFFO |
[C] |
|
76.6 |
|
|
69.6 |
|
|
|
228.4 |
|
|
214.1 |
|
FFO payout ratio |
[A]/[B] |
|
61 |
% |
|
64 |
% |
|
|
62 |
% |
|
65 |
% |
AFFO payout ratio |
[A]/[C] |
|
68 |
% |
|
73 |
% |
|
|
68 |
% |
|
71 |
% |
(4) Same property NOI — cash basis refers to the NOI — cash basis (NOI excluding lease termination and close-out fees, and the non-cash impact from straight-line rent and tenant incentive amortization) for those properties owned by Granite throughout the entire current and prior year periods under comparison. Same property NOI — cash basis excludes properties that were acquired, disposed of, classified as development properties or assets held for sale during the periods under comparison. Granite believes that same property NOI — cash basis is a useful supplementary measure in understanding period-over-period organic changes in NOI — cash basis from the same stock of properties owned.
|
Sq ft(1) |
Three Months Ended
|
Sq ft(1) |
Nine Months Ended
|
|||||||||||||||||||||
|
(in
|
|
2024 |
|
|
2023 |
|
$
|
%
|
(in
|
|
2024 |
|
|
2023 |
|
$
|
% change |
|||||||
Revenue |
|
$ |
141.9 |
|
$ |
131.5 |
|
10.4 |
|
|
|
$ |
421.1 |
|
$ |
391.4 |
|
29.7 |
|
|
|||||
Less: Property operating costs |
|
|
22.3 |
|
|
22.3 |
|
— |
|
|
|
|
70.3 |
|
|
66.2 |
|
4.1 |
|
|
|||||
NOI |
|
$ |
119.6 |
|
$ |
109.2 |
|
10.4 |
|
9.5 |
% |
|
$ |
350.8 |
|
$ |
325.2 |
|
25.6 |
|
7.9 |
% |
|||
Add (deduct): |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Lease termination and close-out fees |
|
|
— |
|
|
— |
|
— |
|
|
|
|
(0.5 |
) |
|
— |
|
(0.5 |
) |
|
|||||
Straight-line rent amortization |
|
|
(3.4 |
) |
|
(4.0 |
) |
0.6 |
|
|
|
|
(9.2 |
) |
|
(13.6 |
) |
4.4 |
|
|
|||||
Tenant incentive amortization |
|
|
— |
|
|
1.1 |
|
(1.1 |
) |
|
|
|
0.1 |
|
|
3.3 |
|
(3.2 |
) |
|
|||||
NOI - cash basis |
63.3 |
$ |
116.2 |
|
$ |
106.3 |
|
9.9 |
|
9.3 |
% |
63.3 |
$ |
341.2 |
|
$ |
314.9 |
|
26.3 |
|
8.4 |
% |
|||
Less NOI - cash basis for: |
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Acquisitions |
— |
|
— |
|
|
— |
|
— |
|
|
1.0 |
|
0.8 |
|
|
0.3 |
|
0.5 |
|
|
|||||
Developments |
0.5 |
|
(1.4 |
) |
|
— |
|
(1.4 |
) |
|
2.8 |
|
(11.4 |
) |
|
(0.9 |
) |
(10.5 |
) |
|
|||||
Dispositions and assets held for sale |
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
— |
|
|
(0.2 |
) |
0.2 |
|
|
|||||
Same property NOI - cash basis |
62.9 |
$ |
114.8 |
|
$ |
106.3 |
|
8.5 |
|
8.0 |
% |
59.8 |
$ |
330.6 |
|
$ |
314.1 |
|
16.5 |
|
5.3 |
% |
|||
Constant currency same property NOI - cash basis(2) |
62.9 |
$ |
114.8 |
|
$ |
108.1 |
|
6.7 |
|
6.2 |
% |
59.8 |
$ |
330.6 |
|
$ |
317.4 |
|
13.2 |
|
4.2 |
% |
(1) | The square footage relating to the NOI — cash basis represents GLA of 63.3 million square feet as at September 30, 2024. The square footage relating to the same property NOI — cash basis represents the aforementioned GLA excluding the impact from the acquisitions, dispositions, assets held for sale and developments during the relevant period. |
|
(2) | Constant currency same property NOI - cash basis is calculated by converting the comparative same property NOI - cash basis at current period average foreign exchange rates. |
(5) Total debt is calculated as the sum of all current and non-current debt, the net mark to market fair value of derivatives and lease obligations as per the consolidated financial statements. Net debt subtracts cash and cash equivalents from total debt. Granite believes that it is useful to include the derivatives and lease obligations for the purposes of monitoring the Trust’s debt levels.
(6) The net leverage ratio is calculated as net debt (a non-IFRS performance measure defined above) divided by the fair value of investment properties (excluding assets held for sale). The net leverage ratio is a non-IFRS ratio used in evaluating the Trust’s degree of financial leverage, borrowing capacity and the relative strength of its balance sheet.
As at September 30, 2024 and December 31, 2023 |
|
|
2024 |
|
|
2023 |
|
Unsecured debt, net |
|
$ |
3,088.9 |
|
$ |
3,066.0 |
|
Derivatives, net |
|
|
(43.1 |
) |
|
(100.8 |
) |
Lease obligations |
|
|
34.7 |
|
|
33.2 |
|
Total debt |
|
$ |
3,080.5 |
|
$ |
2,998.4 |
|
Less: cash and cash equivalents |
|
|
133.5 |
|
|
116.1 |
|
Net debt |
[A] |
$ |
2,947.0 |
|
$ |
2,882.3 |
|
Investment properties |
[B] |
$ |
9,094.5 |
|
$ |
8,808.1 |
|
Net leverage ratio |
[A]/[B] |
|
32 |
% |
|
33 |
% |
(7) Overall capitalization rate is calculated as stabilized net operating income (property revenue less property expenses) divided by the fair value of the income-producing property.
(8) Annualized revenue for each period presented is calculated as the contractual base rent for the month subsequent to the quarterly reporting period multiplied by 12 months. Annualized revenue excludes revenue from properties classified as assets held for sale.
(9) Committed occupancy as at November 6, 2024.
FORWARD-LOOKING STATEMENTS
This press release may contain statements that, to the extent they are not recitations of historical fact, constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities legislation, including the United States Securities Act of 1933, as amended, the United States Securities Exchange Act of 1934, as amended, and applicable Canadian securities legislation. Forward-looking statements and forward-looking information may include, among others, statements regarding Granite’s future plans, goals, strategies, intentions, beliefs, estimates, costs, objectives, capital structure, cost of capital, tenant base, tax consequences, economic performance or expectations, or the assumptions underlying any of the foregoing. Words such as “outlook”, “may”, “would”, “could”, “should”, “will”, “likely”, “expect”, “anticipate”, “believe”, “intend”, “plan”, “forecast”, “project”, “estimate”, “seek” and similar expressions are used to identify forward-looking statements and forward-looking information. Forward-looking statements and forward-looking information should not be read as guarantees of future events, performance or results and will not necessarily be accurate indications of whether or the times at or by which such future performance will be achieved. Undue reliance should not be placed on such statements. There can also be no assurance that Granite’s expectations regarding various matters, including the following, will be realized in a timely manner, with the expected impact or at all: the effectiveness of measures intended to mitigate such impact, and Granite’s ability to deliver cash flow stability and growth and create long-term value for unitholders; Granite’s ability to advance its ESG+R program and related targets and goals; the expansion and diversification of Granite’s real estate portfolio and the reduction in Granite’s exposure to Magna and the special purpose properties; Granite’s ability to accelerate growth and to grow its net asset value, FFO and AFFO per unit, and constant currency same property NOI - cash basis; Granite's ability to execute on its strategic plan and its priorities for the remainder of 2024 and into 2025; Granite's 2024 outlook for FFO per unit, AFFO per unit and constant currency same property NOI, including the anticipated impact of future foreign currency exchange rates on FFO and AFFO per unit and expectations regarding Granite's business strategy; fluctuations in foreign currency exchange rates and the effect on Granite's revenues, expenses, cash flows, assets and liabilities; Granite's ability to offset interest or realize interest savings relating to its term loans, debentures and cross currency interest rate swaps; Granite’s ability to find and integrate satisfactory acquisition, joint venture and development opportunities and to strategically deploy the proceeds from recently sold properties and financing initiatives; Granite's intended use of available liquidity, its ability to obtain secured funding against its unencumbered assets and its expectations regarding the funding of its ongoing operations and future growth; any future offerings under the Shelf Prospectuses; obtaining site planning approval of a 0.7 million square foot distribution facility on the 34.0 acre site in
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106979806/en/
Teresa Neto
Chief Financial Officer
(647) 925-7560
Source: Granite Real Estate Investment Trust
FAQ
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