Weighted average occupancy at December 31, 2012 was 96.7%, up from 96.4% at the end of the third quarter and 94.1% at the end of the second quarter of 2012, and compared to 98.0% at the end of 2011. The increase from the third and second quarters of 2012 is due to improved leasing across the portfolio, offset by lower occupancies at certain recently acquired properties and vacancies at certain other properties due to ongoing re-positioning and redevelopment initiatives.
Net Operating Income ("NOI") increased to $7.3 million and $28.0 million in the fourth quarter and year ended December 31, 2012, respectively, compared to $4.7 million and $15.5 million in the comparable prior year periods due primarily to the contribution from acquisitions completed over the prior twelve months. Same property NOI in 2012 increased a strong 4.0% due primarily to higher percent rents from tenants at the REIT's Cornwall Square and increased straight-line rent at Mega Centre, partially offset by lower base rents and recoveries at Mega Centre while preparing a space at the centre for Wal-Mart. For the three months ended December 31, 2012 same property NOI declined by 1.0% due primarily to lower recovery revenues at one property.
Funds from Operations ("FFO") increased to $3.7 million ($0.17 per unit) and $12.5 million ($0.64 per unit) for the three months and year ended December 31, 2012, respectively, compared to $1.1 million ($0.15 per unit) and $4.2 million ($0.55 per unit) for the same comparable periods last year. The increases were due primarily to the contribution from acquisitions completed over the prior twelve months. The REIT's FFO cash payout ratio(excluding DRIP distributions) improved to 91% and 95% in the three months and year ended December 31, 2012, respectively.
Adjusted Funds from Operations ("AFFO") also rose significantly to $3.5 million ($0.15 per unit) and $11.9 million ($0.61 per unit) for the three months and year ended December 31, 2012, respectively, from $1.3 million ($0.16 per unit) and $4.4 million ($0.57 per unit) for the same prior-year periods. The AFFO cash payout ratio (excluding DRIP distributions) improved to 97% and 99% for the three months and year ended December 31, 2012, respectively.
During the fourth quarter of 2012, the REIT revised its calculations to include amortization of deferred financing costs in FFO and exclude it from AFFO. The calculations for prior periods have been amended to reflect this change.
The REIT's growth has been accretive on a per unit basis through 2012 despite the 151% increase in the weighted average number of units outstanding as at December 31, 2012 compared to the end of 2011. The net asset value per unit of the REIT increased to $7.62 at December 31, 2012 from $7.26 at December 31, 2011 due to the acquisition of accretive properties and significant increase in the fair value of the portfolio. Total net assets increased $113.7 million during the year to $170.1 million at December 31, 2012.
Management remains committed to actively pursuing new leases and lease renewals with the objective of increasing occupancy and weighted average rental income per square foot of gross leasable area. One of the REIT's goals is to generate organic growth through redevelopment and lease renewal activities at its existing centres. As at March 19, 2013 the REIT had lease renewals and new leases of approximately 258,000 square feet. The weighted average rent, including any material new and renewed leases completed by March 19, 2013 was $10.29 per square foot, a decrease of $0.34 per square foot from the weighted average rent for leases that expire during the year due to management's initiatives to replace rents from temporary tenants that have vacated space with long-term, stable and sustainable rents from national, more credit-worthy tenants.
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