"Dundee REIT is entering its tenth year better and stronger than ever," said Michael Cooper, Vice Chairman and CEO of Dundee REIT. "We have a portfolio of high quality assets that are producing consistent results and a strong, conservative balance sheet. Overall, our business has never been in better shape."
Senior management will host a conference call to discuss the results tomorrow, February 21, 2013 at 2:00 p.m. (ET). To access the call, please dial: 416-849-5525 or toll free at 1-866-200-6965 and using passcode 63895136#. A taped replay of the call will be available for 30 days by dialling 646-216-7204 or 1-866-206-0173 and using passcode 279189#. To access the conference call via webcast, please go to Dundee REIT's website at www.dundeereit.com and click on the link for News & Events, then click on Calendar of Events. The webcast will be archived for 30 days.
PORTFOLIO ACTIVITY
The Trust was very active in the commercial property investment markets throughout the year. Acquisitions completed throughout 2012 totalled $2.6 billion and added 9.9 million square feet of high quality office properties to its portfolio. In addition, the Trust remained focused on pruning its portfolio, completing the sale of $680.2 million of non-strategic assets totalling 5.8 million square feet.
Acquisitions
In the fourth quarter, Dundee REIT acquired a co-owner's interest in nine suburban properties in Edmonton for $75.8 million and also acquired its co-owner's interest in State Street Financial Centre in downtown Toronto for approximately $77.3 million.
Approx. PurchaseYear-ended December Property GLA price 31, 2012 type (sq. ft.) ($000's)(i) Date--------------------------------------------------------------------------------------------------------------------------------------------------------5001 Yonge Street, Toronto office 309,138 $ 107,775 January 19, 201267 Richmond Street West, Toronto office 44,996 13,500 January 30, 2012Whiterock Portfolio office/ industrial/ retail 7,368,679 1,419,700 March 2, 2012Parking lots, Saskatoon - 9,567 18,000 March 12, 20121 Riverside Drive, Windsor office 235,915 35,800 April 26, 2012Scotia Plaza (two- thirds ownership interest) office 1,317,795 844,339 June 15, 2012Transamerica Portfolio (ROI Share at 60%) office 373,121 74,902 October 4, 201230 Adelaide St. E., Toronto (share at 50%) office 206,967 77,250 December 28, 2012----------------------------------------------------------------------------Total closed in 2012 9,866,178 2,591,266--------------------------------------------------------------------------------------------------------------------------------------------------------(i)Purchase price excludes transaction costs.
Dispositions
During the quarter, the Trust completed the disposition of its industrial portfolio for gross proceeds of approximately $575.5 million and also completed the sale of other non-strategic assets for gross proceeds of approximately $104.8 million.
Disposed Gross MortgagesYear-ended December Property GLA Proceeds discharged Date 31, 2012 type (sq. ft.) ($000)(1) ($000) disposed----------------------------------------------------------------------------ARAM Building, Calgary office 36,428 $ 7,700 $ - 2-Feb-12West Chambers, Edmonton office 92,560 24,200 6,786 15-Aug-124250 Albert Street, Regina retail 41,238 9,600 5,126 15-Aug-12885 Don Mills, Toronto office 59,449 8,975 4,547 30-Aug-1212804 137th Avenue, Edmonton retail 54,514 18,900 12,633 14-Sep-12Bisma Centre, Calgary office 27,496 9,200 - 19-Sep-12998 Parkland Drive, Halifax retail 33,857 7,170 4,624 4-Oct-12193 Malpeque, Charlottetown retail 41,573 5,100 - 4-Oct-12655 University Ave., Charlottetown retail 26,043 3,800 2,357 4-Oct-12Industrial Portfolio industrial 5,134,114 575,469 225,592 4-Oct-127102 7220 Barlow Trail SE, Calgary industrial 234,676 10,150 - 30-Nov-12----------------------------------------------------------------------------Total 5,781,948 680,264 $ 261,665--------------------------------------------------------------------------------------------------------------------------------------------------------625 University Park Drive, Regina retail 17,145 5,182 - 31-Jan-132640, 2510 - 2550 Quance Street, Regina retail 69,554 16,300 - 31-Jan-13----------------------------------------------------------------------------Closed in 2013 86,699 $ 21,482 $ ---------------------------------------------------------------------------------------------------------------------------------------------------------(1) Gross proceeds before transaction costs.OPERATIONAL HIGHLIGHTS-- Portfolio occupancy remains strong at 95.1% - The overall percentage of occupied and committed space across the Trust's remained strong at 95.1%, consistent with that of Q3 2012 and well ahead of the national industry average of 91.5%. On a comparative property basis, occupancy is up 10 basis points over Q3 2012 to 95.2%.-- Leasing activity - During the quarter, leasing activity included 277,000 square feet of new leasing and 497,000 square feet of renewals, reducing vacancy by approximately 44,000 square feet over the prior quarter. In addition, approximately 163,500 square feet of gross leasable area was committed for future occupancy at period end.-- Average in-place net rents 12% below market rents - The portfolio average in-place rent was $17.22 per square foot, up from $17.18 at September 30, 2012, yet remaining approximately 12% below estimated market rents.-- Adding depth to the management team - The Board of Trustees is pleased to announce that Ana Radic has been appointed as Chief Operating Officer of Dundee REIT. Ana is currently the Senior Vice President, Eastern Canada for Dundee REIT. Ana first worked with Dundee from 1997-2007, at which time her employment was transferred to GE Real Estate when Dundee sold its portfolio in Eastern Canada. Ana re-joined Dundee in 2010 and has been instrumental in re-building the Trusts' platform in Eastern Canada.FINANCIAL HIGHLIGHTS-- Comparative property NOI up $1.4 million, or 4% - Comparative property NOI was up $1.4 million, or 4%, on a quarterly basis and up $4.3 million, or 3% year-over-year, driven largely by leasing activity resulting in both occupancy and rental rate increases across the Calgary and Western Canada portfolios. Total NOI for the quarter is up $28.7 million, or 37%, including $35.0 million generated by properties acquired in 2012. Year-over-year, total NOI is up $158.1 million, or 61%, including 151.1 million generated by properties acquired during the year.-- Year-over-year FFO and AFFO per unit up 6% and 3%, respectively - On an annual basis, accretive acquisitions and comparative property growth contributed to per unit increases in FFO and AFFO of $0.17 and $0.08, respectively. Compared with Q3 2012, FFO and AFFO per unit decreased by $0.04 and $0.04, respectively, largely reflecting the temporary drag of cash on hand from asset sales completed early in the quarter not being redeployed until quarter end.-- 4 cent increase to annualized distribution rate - The Trust also announced that the Board of Trustees has approved an increase in Dundee REIT's annualized distributions to $2.24 per unit, an increase of 1.8%, or 4 cents per unit, from the previous distribution of $2.20 per unit on an annualized basis, commencing with the April 30, 2013 record date.
