Summit Industrial Income REIT Announces Continued Strong Growth in Second Quarter 2013

Summit Industrial Income REIT Announces Continued Strong Growth in Second 
Quarter 2013 
TORONTO, Aug. 20, 2013 /CNW/ - Summit Industrial Income REIT ("Summit II" or 
the "REIT") (TSXV: SMU.UN) announced today its operating and financial results 
for the three and six months ended June 30, 2013. 
SUMMARY OF QUARTERLY RESULTS: 
($,000             June 30,     March 30,     Dec. 31,     Sept. 30,
except per             2013          2013         2012          2012
Unit
amounts) 
Revenue from          5,655         2,683        1,670           306
Income
properties 
Net                   4,419         2,109        1,237           311
Operating
Income (NOI) 
Funds from            2,715         1,229          778            33
Operations
(FFO) 
FFO per Unit          $0.15         $0.11        $0.11         $0.04 
Adjusted              2,502         1,161          720            33
Funds from
Operations
(AFFO) 
AFFO per              $0.14         $0.11        $0.10         $0.04
Unit 
Weighted             18,029        11,094        6,893           940
Average
Units
Outstanding 
FFO Payout            81.3%             -            -             -
Ratio (%) 
AFFO Payout           88.2%             -            -             -
Ratio (%) 


                                                                    

Total Debt            53.9%         54.6%        47.0%         40.7%
to Gross
Book Value
(%)

Debt Service           2.04          2.48         2.39          2.64
Coverage
(times)

Interest               2.90          2.98         2.40          3.37
Coverage
(times)

HIGHLIGHTS:
    --  Q2 2013 FFO payout ratio of 81.3%
    --  Q2 2013 AFFO payout ratio of 88.2% well ahead of forecast 95%
    --  Acquired fifteen light industrial properties through first six
        months of 2013 totaling 2.0 million sq. ft. of GLA for $171.2
        million at an average cap rate of 6.8%
    --  Sold two non-core properties in second quarter, with a third
        held for sale
    --  Subsequent to June 30, 2013 waived conditions on six light
        industrial properties totaling 653,000 sq.ft. and one fully
        occupied office property for $52.7 million at an average cap
        rate of 7.2%
    --  Completed transactions will increase portfolio to 29 properties
        aggregating 3.3 million sq. ft. of GLA
    --  Announced monthly cash distributions of $0.0408 per Unit
        (annualized $0.4896 per Unit)
    --  Implemented new DRIP with 5% bonus. Current participation rate
        approximately 13.2%
    --  Acquisitions contribute to significant growth in FFO and AFFO
        per unit in 2013
    --  Manager's ownership interest of 10.2% fully aligns interests
        with all Unitholders

"Our acquisitions are generating significant growth in our key performance 
benchmarks and we look to build on this progress in the quarters ahead," 
stated Paul Dykeman, CEO. "We were particularly pleased that our actual FFO 
and AFFO payout ratios in the second quarter were well ahead of the forecast 
in our February equity offering prospectus."

"As the REIT's manager, we continue to elect to take the majority of the fees 
owing under our Management Agreement in the form of Trust Units, and have 
participated in all the REIT's equity offerings," added Lou Maroun, Chairman. 
"Today our ownership interest in the REIT is approximately 10.2%, and we will 
continue to maintain and grow this participation going forward, fully aligning 
our interests with all Unitholders."

STRONG PORTFOLIO GROWTH
Through the first six months of 2013 the REIT completed the acquisition of 15 
light industrial properties well-located in Edmonton Alberta, the Greater 
Toronto Area, and Moncton New Brunswick aggregating approximately 2.0 million 
square feet of gross leaseable area (GLA) for a total purchase price of $171.2 
million. The acquisitions were funded by cash raised in a successful offering 
of Trust Units completed on February 26, 2013 raising $75.1 million in gross 
proceeds, and new mortgage financings totaling $90.6 million.

Subsequent to the end of the second quarter the REIT waived conditions and 
will be acquiring an additional six light industrial properties totaling 
653,000 square feet of GLA in Brampton Ontario, Barrie Ontario and the Greater 
Montreal Region, as well as one fully occupied office building in Montreal, 
for a total purchase price of approximately $52.7 million satisfied by the 
assumption of an existing $5.4 million mortgage, new mortgages totaling $26.3 
million, with the balance in cash from the REIT's revolving credit facility.

With the completion of the above-mentioned acquisitions and the disposition of 
non-core properties, the REIT's total property portfolio will consist of 29 
properties totaling approximately 3.3 million square feet of GLA with 
occupancy of 99.5% generating current annualized NOI of approximately $21.0 
million.

STRONG FINANCIAL RESULTS
Operating revenues increased to $5.7 million for the three months ended June 
30, 2013 compared to $2.7 million for the three months ended March 31, 2013 
and $0.3 million in the prior year's second quarter. The REIT's revenue growth 
is due primarily to acquisitions completed over the last ten months, 
continuing strong occupancies of 100% at June 30, 2013 compared to 99% at 
March 31, 2013, as well as steady progress in leasing activities. For the six 
months ended June 30, 2013 operating revenues were $8.3 million compared to 
$0.5 million in the same period last year.

Net Operating Income (NOI) rose to $4.4 million in the second quarter of 2013 
compared to $2.1 million in the first quarter of the year and $0.2 million in 
the second quarter of 2012. For the first six months of 2013 NOI was $6.5 
million compared to $0.4 million last year.

Funds from Operations (FFO) for the three months ended June 30, 2013 were $2.7 
million ($0.151 per Unit) compared to $1.2 million ($0.111 per Unit) for the 
quarter ended March 31, 2013 and $18,000 ($0.028 per Unit) in the second 
quarter of 2012. The increase in 2013 is due to the contribution from 
acquisitions completed over the last ten months, improved occupancies and 
strong leasing activities. For the six months ended June 30, 2013 FFO was $3.9 
million ($0.271 per Unit) compared to $95,000 ($0.145 per Unit) in the same 
period last year.

Adjusted Funds from Operations (AFFO) in the second quarter of 2013 rose to 
$2.5 million ($0.139 per Unit) from $1.2 million ($0.111 per Unit) in the 
first quarter of the year and $18,000 ($0.028 per Unit) in the second quarter 
of 2012. For the six months ended June 30, 2013 AFFO was $3.7 million ($0.251 
per Unit) compared to $95,000 ($0.145 per Unit) in the same period last year. 
The REIT's AFFO payout ratio was 88.2% through the second quarter of 2013, 
well ahead of the 95% forecast in its February 2013 offering prospectus. 
Including the benefit of the REIT's DRIP program, the effective payout ratio 
was a conservative 76.5% in the quarter. As of June 30, 2013, the DRIP 
participation rate was approximately 13.2%. The REIT established its monthly 
distribution policy of $0.0408 per Unit, or $0.4896 on an annual basis, on 
March 15, 2013.

The REIT's growth has been highly accretive as, despite the 62.5% increase in 
the weighted average number of Units outstanding in the second quarter of 2013 
compared to the first quarter of the year, FFO per Unit and AFFO per Unit have 
increased 36.0% and 32.4 %, respectively.

ACTIVE LEASING PROGRAM
During and subsequent to the first six months of 2013 the REIT made 
significant progress in leasing approximately 287,000 square feet of space 
subject to leases with applicable property vendors (Head Leases) with terms 
ending December 2014 and September 2015. Of this space, 50,000 square feet is 
not set to commence until November 2013. To date, leases have been secured for 
51,595 square feet of head lease space with offers currently under negotiation 
for another 197,000 square feet.

Overall, leases representing only 1.4% of the total property portfolio, or 
39,000 square feet, renew in 2013 with 312,000 square feet, or 11.7% of the 
total portfolio, up for renewal in 2014. The weighted average term to maturity 
for the lease portfolio is approximately 5.9 years.

SOLID BALANCE SHEET AND LIQUIDITY POSITION
Total assets increased to $253.4 million as at June 30, 2013 compared to $81.6 
million at December 31, 2012. Total debt increased to $136.6 million at June 
30, 2013 from $38.3 million at December 31, 2013. The increases are due to the 
REIT's acquisitions and related mortgage and other financings to complete the 
purchases. At June 30, 2013 the REIT's debt leverage ratio was 53.9% compared 
to 47.0% at December 31, 2012. The weighted average interest rate on the 
REIT's mortgage portfolio improved to 3.6% from 4.0% at December 31, 2012, 
with a weighted average term to maturity of 5.7 years. Debt service and 
interest coverage ratios for the six month period, improved to 2.14 times and 
2.89 times, respectively, compared to 2.39 times and 2.40 times at December 
31, 2012.

On March 11, 2013 the REIT increased its credit facility to $55 million, of 
which $40.6 million was drawn on the loan as at June 30, 2013. Subsequent to 
the end of the quarter the facility was increased to $68 million. If the REIT 
increased its borrowing to the 65% maximum allowed under its Declaration of 
Trust, it would have the capacity to purchase approximately $80 million in new 
properties as at August 20, 2013.

Under the terms of the REIT's Management Agreement with Sigma Asset Management 
Limited (the Manager), the Manager can elect to take the fees payable to it in 
the form of Trust Units rather than in cash. In the first six months of 2013 
the Manager used its acquisition fee proceeds of approximately $1.6 million to 
acquire 240,444 Units, from the February 26, 2013 offering of 11,120,000 
Units, further aligning the interests of the Manager with all Unitholders. As 
well, certain members of the Manager acquired 239,235 Units during the 
February offering. In addition, through the six months ended June 30, 2013 
certain members of the Manager acquired an additional 223,000 Units on the TSX 
Venture Exchange, resulting in the Manager owning directly and indirectly a 
retained interest of approximately 10.2%.

INVESTOR CONFERENCE CALL
A conference call will be hosted by Summit II's management team tomorrow, 
Wednesday August 21, 2013 at 10.00 am ET. The telephone numbers to participate 
in the conference call are North America Toll Free: (866) 226-1792 and Local 
Toronto / International: (416) 340-2216. The live audio conference call will 
also be available as a webcast. To access the audio webcast please access the 
link on the Investor Information page on our web site at www.summitIIreit.com. 
The telephone numbers to listen to the call after it is completed (Instant 
Replay) are North American Toll Free (800) 408-3053 or Local Toronto / 
International (905) 694-9451. The Passcode for the Instant Replay is 5062738#. 
The Instant Replay will be available until August 27, 2013. A webcast of the 
call will also be archived on the REIT's web site at www.summitIIreit.com.

FINANCIAL AND OPERATING HIGHLIGHTS
                                                                       

(in Thousands
of Canadian             Three        Three           Six            Six
dollars)               months       months        Months         Months

(except where            June         June          June
noted)                    30,          30,           30,       June 30,
                         2013         2012          2013           2012
                                                                       

Portfolio                                                     
Performance                                                            

Occupancy (                                                   
(1))                     100%         100%          100%           100%

Operating                                                     
revenues                5,655          263         8,338            521

Net operating                                                 
income (NOI)            4,419          185         6,528            432
                                                                       

Operating                                                     
Performance                                                            

Funds from
operations                                                    
(FFO)                   2,715           18         3,944             95

FFO per Unit        $             $            $             $
(basic)                 0.151        0.028         0.271          0.145

Adjusted
funds from                                                    
operations
(AFFO)                  2,502           18         3,663             95

AFFO per Unit       $             $            $             $
(basic)                 0.139        0.028         0.251          0.145

Weighted
average                                                       
number of
Units                  18,029          654        14,578            654

Cash
distributions                                                 
declared                2,207            -         2,942         13,346

Cash
distributions       $             $            $             $
declared per
Unit (basic)           0.1224            -        0.1632           1.70

Cash
distributions                                                 
paid ((2))              1,914            -         1,914         13,346

Proceeds from
Units issued                                                  
under DRIP
plan ((2))                291            -           291              -

FFO payout
ratio without                                                 
DRIP benefit
((2))                   81.3%          N/A           N/A            N/A

FFO payout
ratio with                                                    
DRIP benefit
((2))                   70.5%          N/A           N/A            N/A

AFFO payout
ratio without                                                 
DRIP benefit
((2))                   88.2%          N/A           N/A            N/A

AFFO payout
ratio with                                                    
DRIP benefit
((2))                   76.5%          N/A           N/A            N/A
                                                                       

Liquidity and                                                 
Leverage                                                               

Total assets          253,443       11,905       253,443         11,905

Total debt to
gross book                                                    
value                   53.9%        70.4%         53.9%          70.4%

Weighted
average                                                       
mortgage
interest rate            3.6%         4.0%          3.6%           4.0%

Weighted
average                                                       
mortgage term             5.7          3.1           5.7            3.1
(years)                 years        years         years          years

Debt service
coverage                 2.04                       2.14      
(times)                 times          N/A         times            N/A

Interest
coverage                 2.90                       2.89      
(times)                 times          N/A         times            N/A
                                                                       

Other                                                                  

Properties                                                    
acquired                    -            -            15              -

Non-core
properties                                                    
disposed                    2            1             2             14

((1)) Approximately 237,000 square feet (9% of total GLA) is currently
under Head Leases with an additional 50,000 square feet set

to commence November 2013. Approximately 50,600 square feet (2% of
total GLA), currently under Head Leases has been leased

and 154,000 square feet (6% of total GLA) is under short-term leases
(see "Active Leasing Program").   

((2)) On March 15, 2013, the Trust announced a cash distribution policy
to pay $0.0408 per Trust Unit. The first cash distribution

was paid on April 15, 2013 to Unitholders of record on March 29, 2013.
The three months ended June 2013 represents the first

quarter of distributions having been paid.

About Summit II
Summit Industrial Income REIT is an unincorporated open-end trust focused on 
growing and managing a portfolio of light industrial properties across Canada. 
Summit II's units are listed on the TSX-V and trade under the symbol SMU.UN. 
For more information, please visit our web site at www.summitIIreit.com.

Caution Regarding Forward Looking Information
This news release contains forward-looking statements and forward-looking 
information within the meaning of applicable securities laws. The use of any 
of the words "expect", "anticipate", "continue", "estimate", "objective", 
"ongoing", "may", "will", "project", "should", "believe", "plans", "intends", 
"goal" and similar expressions are intended to identify forward-looking 
information or statements. The forward-looking statements and information are 
based on certain key expectations and assumptions made by Summit II, including 
general economic conditions. Although Summit II believes that the expectations 
and assumptions on which such forward-looking statements and information are 
based are reasonable, undue reliance should not be placed on the forward 
looking statements and information because Summit II can give no assurance 
that they will prove to be correct. By its nature, such forward-looking 
information is subject to various risks and uncertainties, which could cause 
the actual results and expectations to differ materially from the anticipated 
results or expectations expressed. These risks and uncertainties include, but 
are not limited to, tenant risks, current economic environment, environmental 
matters, general insured and uninsured risks and Summit II being unable to 
obtain any required financing and approvals. Readers are cautioned not to 
place undue reliance on this forward-looking information, which is given as of 
the date hereof, and to not use such forward looking information for anything 
other than its intended purpose. Summit II undertake no obligation to update 
publicly or revise any forward-looking information, whether as a result of new 
information, future events or otherwise, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that 
term is defined in the policies of the TSX Venture Exchange) accepts 
responsibility for the adequacy or accuracy of this release.





SOURCE  Summit Industrial Income REIT 
Paul Dykeman, CEO at (902) 405-8813 pmdykeman@sigmarea.com 
To view this news release in HTML formatting, please use the following URL: 
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CO: Summit Industrial Income REIT
ST: Ontario
NI: REL FND ERN CONF  
-0- Aug/20/2013 23:01 GMT