How 5 REITs Fared In The Second Quarter
Another quarter, another strong showing by Canadian real estate investment trusts. Here’s a rundown on how five of them performed.
1. Dream Office REIT
Highlight: Funds from operations of $74.1M, down from $82.4M in the same period last year.
Portfolio: 157 office properties (21M SF GLA). In Q2, the trust completed the sale of seven assets, or 1.2M SF, as part of a three-year, $1.2B disposition plan.
Big deals: Sold a 16.7% stake in Scotia Plaza (including 100 Yonge St) to KingSett and AIMCo for $114M. The two firms concurrently acquired H&R REIT’s 33.33% interest. Dream Office wrote down the value of its Alberta holdings by $748M.
2. InnVest REIT
Highlights: Adjusted funds from operations of $24.9M, virtually unchanged from Q2 last year; RevPAR was up 5.4%.
Portfolio: 107 hotels (14,000 rooms) across Canada, including a stake in Toronto’s Fairmont Royal York Hotel and Courtyard by Marriott Downtown Toronto.
Big deals: Reached a deal to sell all its outstanding units to Bluesky Hotels and Resorts, with closing anticipated this week; acquired a leasehold interest in the Fairmont Vancouver Airport (above) for $90M.
3. Plaza Retail REIT
Highlight: AFFO of $15.2M for the first half of 2016, up 8.3% from $14.1M during the same period last year.
Portfolio: Interests in 300 properties (7.6M SF) across Canada, a mix of strip plazas, stand-alone small box retail outlets and enclosed shopping centres.
Big deal: Formed 50/50 JV with RioCan REIT to redevelop three properties previously 100% owned by RioCan, paying $11.5M for its stake. Acquired an additional $2.7M interest in St. John's Village Shopping Centre (above).
4. American Hotel Income Properties REIT
Highlight: AFFO up 38.4% to $9.3M from Q2 2015, attributed to hotel portfolio growth and strong operating performance. RevPAR for branded hotels was up 4.4%
Portfolio: 80 hotels in 27 US states (7,095 guest rooms), divided between hotels with diners serving the freight railway industry and branded hotels like Marriott and Hilton.
Big deals: Acquired two 24-room expansions at high-occupancy Oak Tree Inn hotels in Hearne, TX, and Hermiston, OR; another 24-room expansion at the Oak Tree Inn in North Platte, NE, is slated for September.
5. Brookfield Canada Office Properties
Highlights: AFFO was $30.4M, versus $28.1M during the same period in 2015; leased 301k SF during Q2.
Portfolio: 26 office properties (20M SF) in Toronto, Calgary and Ottawa, including Brookfield Place and First Canadian Place in Toronto, and Bankers Hall in Calgary.
Big deal: Inked Scotiabank to a 140k SF lease at the company’s Brookfield Place Calgary East development (a 56-storey, 1.4M SF tower, above)—a major win for the trust in a market president/CEO Jan Sucharda calls “challenging.”