FREDERICTON, NB, Feb. 26, 2024 /CNW/ – Plaza Retail REIT (TSX:PLZ) (“Plaza” or the “REIT”) today announced its financial results for the quarter and year ended December 31, 2023.
“Looking back at 2023, I would like to highlight some of our accomplishments: 1) Plaza continued to deliver and launch new developments; 2) we successfully completed an equity issuance; 3) the REIT was successful in selling certain non-core assets; and 4) we realized record high leasing renewal spreads”, said Michael Zakuta, president and CEO. “Looking forward, we are well positioned to put the headwinds that have impacted real estate behind us and take advantage of strong demand for essential needs retailers targeting non-discretionary spending.”
Summary of Selected IFRS Financial Results
(CAD$000s, except percentages)
Three
Months
Ended
December
31, 2023
Three
Months
Ended
December
31, 2022
$
Change
%
Change
Twelve
Months
Ended
December
31, 2023
Twelve
Months
Ended
December
31, 2022
$
Change
%
Change
Revenues
$28,962
$27,978
$984
3.5 %
$114,064
$111,245
$2,819
2.5 %
Net property operating income
(NOI)(1)
$17,436
$17,590
($154)
(0.9 %)
$70,354
$70,581
($227)
(0.3 %)
Net change in fair value of
investment properties
($9,497)
$6,384
($15,881)
–
($19,969)
$8,187
($28,156)
—
Profit (loss) and total
comprehensive income for the
period
($3,779)
$14,185
($17,964)
–
$20,312
$54,221
($33,909)
—
(1)
This is a non-GAAP financial measure. Refer to Part I of Plaza’s Management’s Discussion and Analysis for the year ended December 31, 2023 (also referred to herein as the “MD&A”) under the heading “Non-GAAP Financial Measures”, Part VII of the MD&A under the heading “Explanation of Non-GAAP Financial Measures”, and below under “Non-GAAP Financial Measures” for more information.
Quarterly Highlights
NOI was $17.4 million, down $154 thousand (0.9%) with the same period in 2022. The decrease in NOI is from an increase in operating expenses, and a decrease in NOI from properties sold in 2022 and 2023, partially offset by rent escalations in same-asset properties, acquisitions, developments, and properties transferred to income-producing in 2022 and 2023.
Profit (loss) and total comprehensive income for the current quarter was a loss of $3.8 million compared to profit of $14.2 million in the same period in the prior year. The decrease was mainly due to the change in the non-cash fair value of investment properties due to an increase in capitalization rates, along with changes in the non-cash fair value adjustments to share of profit from associates, interest rate swaps, the Class B exchangeable LP units, and convertible debentures.
Year-To-Date Highlights
NOI was $70.4 million, down $227 thousand (0.3%) with the same period in 2022. NOI was impacted by an increase in operating expenses, an allowance provided to a tenant in consideration of delayed delivery of premises at a development property, and a decrease in NOI from properties sold, offset by an increase in NOI from same-asset, acquisitions, developments and properties transferred to income producing in 2022 and 2023.
Profit and total comprehensive income for the current year to date was $20.3 million compared to $54.2 million in the same period in the prior year. The decrease was mainly due to a decrease in the non-cash fair value of investment properties of $20.0 million in the current year compared to a fair value increase of $8.2 million in the prior year. The fair value change was mainly due to an increase in capitalization rates. Profit was also impacted by an increase in administrative expenses and finance costs, an increase in investment and other income from development activity, along with changes in non-cash fair value adjustments relating to share of profit from associates, interest rate swaps, the Class B exchangeable LP units, and convertible debentures.
Summary of Selected Non-IFRS Financial Results
(CAD$000s, except
percentages, units
repurchased and per unit
amounts)
Three
Months
Ended
December
31, 2023
Three
Months
Ended
December
31, 2022
$
Change
%
Change
Twelve
Months
Ended
December
31, 2023
Twelve
Months
Ended
December
31, 2022
$
Change
%
Change
FFO(1)
$10,062
$10,232
($170)
(1.7 %)
$41,520
$41,383
$137
0.3 %
FFO per unit(1)
$0.090
$0.099
($0.009)
(9.1 %)
$0.379
$0.402
($0.023)
(5.7 %)
FFO payout ratio(1)
77.6 %
70.4 %
n/a
10.2 %
74.2 %
69.7 %
n/a
6.5 %
AFFO(1)
$6,573
$7,526
($953)
(12.7 %)
$31,933
$33,186
($1,253)
(3.8 %)
AFFO per unit(1)
$0.059
$0.073
($0.014)
(19.2 %)
$0.292
$0.322
($0.030)
(9.3 %)
AFFO payout ratio(1)
118.8 %
95.8 %
n/a
24.0 %
96.5 %
86.9 %
n/a
11.0 %
Same-asset NOI(1)
$17,004
$16,935
$69
0.4 %
$68,531
$67,814
$717
1.1 %
Normal course issuer bid …