TORONTO, ONTARIO -- (Marketwire) -- 02/13/13 -- Calloway Real Estate Investment Trust (TSX: CWT.UN) is pleased to report strong results for the fourth quarter and year ended December 31, 2012.
Highlights for the quarter:Operations-- Maintained portfolio occupancy rate at or above the 99% level for the 12th sequential quarter-- Funds from operations ("FFO")(1) increased by 10.3% to $60.4 million and 4.5% to $0.469 on a per unit basis compared to the same period in 2011-- Opened 196,440 square feet of new leased space in existing retail centres through completing development and lease up at a weighted average development yield of 7.1% on aggregate investment of $54.0 millionGrowth Initiatives-- Entered into a joint venture with SmartCentres to develop a 53-acre site located within the Vaughan Metropolitan Centre ("VMC"), which is expected to include over 6 million square feet of office, retail and residential space at completion. Construction of the first phase consisting of the 300,000 square foot KPMG Tower with tunnel connection to the VMC subway is expected to commence later this year-- Completed the previously announced acquisition of zoned land to develop the Montreal Premium Outlets® through a joint venture with Simon Properties Group and SmartCentres. The completed development is expected to open in summer 2014-- Invested $7.0 million for a one third interest in a joint venture with Simon Properties Group and SmartCentres to develop a retail centre in Mirabel, Quebec, adjacent to the Montreal Premium Outlets® development-- Completed the sale of seven non-core investment properties for gross proceeds of $86.0 million as part of the plan to recycle equity into higher growth propertiesOther-- Reversed income tax provisions of $659.2 million upon substantial enactment in November 2012 of Income Tax amendments relating to SIFT rules first announced in December 2010. Calloway will qualify for REIT Exemption, effective January 1, 2011, once the amendments are signed into law-- Executed previously announced agreements that added floor capitalization rates on Earnout properties with capitalization rates based on floating rates. This eliminates the $18.8 million contingent liability on Earnouts previously completed that would have been payable if the agreements had not been signed-- Monthly distributions are confirmed for the period of February to April at $0.129 per unitHighlights for the year:-- Maintained over 99% occupancy throughout the year-- Renewed 89% of tenant space expiring in 2012 achieving an average rent increase of 6.4%-- FFO(1)(2) increased by 11.6% to $226.9 million and 4.9% to $1.787 on a per unit basis compared to 2011-- Acquired 400,358 square feet of retail space in two investment properties for $102.7 million-- Invested $127.9 million to complete the development and lease up of 472,268 square feet of leasable area at an average yield of 7.5%. Once again, Calloway developed more space in-house at materially higher yields than available on acquisitions-- Commenced construction and lease up of the 500,000 square feet Toronto Premium Outlets® in a 50:50 joint venture with Simon Properties Group. This US-style fashion outlets centre, which is the first of its kind in Canada, is expected to open fully leased in August 2013-- Renewed and increased unsecured revolving operating facility to $70.0 million-- Issued $150 million, eight-year unsecured debentures bearing interest at 4.05% per annum-- Increased the fair value of investment properties by $396.6 million from income growth and declining capitalization rates-- Improved leverage and liquidity measures with improvements in debt to total assets ratio of 40.9% (2011 - 45.4%), net interest coverage ratio (excluding capitalized interest) of 2.6X (2011 - 2.5X) and AFFO payout ratio of 90.3% (2011 - 94.0%)