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Crombie REIT reports first quarter results

 Crombie REIT (TSX:CRR.UN)  STELLARTON, NS, May 14, 2014 /CNW/ - Crombie Real Estate Investment Trust  ("Crombie") (TSX:CRR.UN) is pleased to report its financial results for the  first quarter ended March 31, 2014.  First Quarter 2014 Highlights (In thousands of CAD dollars, except per unit  amounts and as otherwise noted).            --  Portfolio fair value of $3.9 billion.         --  Funds From Operations ("FFO"):             o FFO per unit fully diluted remained stable at $0.28,               unchanged from the same period in 2013.             o FFO grew by 34.1% over the same period in 2013 ($34,494 vs.               $25,721).             o FFO payout ratio decreased slightly to 79.3% compared to               79.5% for the same period in 2013.         --  Adjusted Funds From Operations ("AFFO"):             o AFFO per unit fully diluted remained stable at $0.23,               unchanged from the same period in 2013.             o AFFO grew by 33.2% over the same period in 2013 ($28,769 vs.               $21,606).             o AFFO payout ratio increased slightly to 95.1% compared to               94.6% for the same period in 2013.         --  Same-asset Cash Net Operating Income ("NOI") showed strong 2.5%             growth over the same period in 2013.         --  Property revenue of $90,913, an increase of $20,331 or 28.8%             over the $70,582 for Q1 2013.         --  Occupancy, on a committed basis, was 93.1% at March 31, 2014,             compared with 93.2% at December 31, 2013.         --  Crombie completed leasing activity on a total of 260,000 square             feet during the quarter, including:             o Renewals on 149,000 square feet of 2014 expiring leases at an               average rate of $16.52 per square foot, an increase of 8.7%               over the expiring lease rate; and             o New leases on 111,000 square feet of space, at an average               rate of $14.61 per square foot.         --  Weighted average lease term of 11.8 years and weighted average             mortgage term of 7.9 years; amongst the longest and most             defensive in the REIT industry.         --  Weighted average interest rate on mortgages reduced to 4.79%             from 4.82% at December 31, 2013 and 5.09% at March 31, 2013.             Strong 2.53 times interest coverage.         --  Debt to Gross Book Value (fair value basis) of 53.1%.  Donald E. Clow, FCA, President and CEO commented:" We are pleased with our  progress on the integration of the Safeway portfolio; our continued access to  new sources of capital; and the enhancement of our national platform,  including the improved focus of our senior leadership team and the addition of  a new regional vice-president position in Western Canada."  Financial Highlights  Crombie's key financial metrics for the three months ended March 31, 2014 are  as follows:           (In thousands of CAD dollars, except per Three Months Ended March 31,     unit amounts and     as otherwise noted)                          2014                2013     Property revenue                         $ 90,913 $            70,582     Operating income attributable to         $ 15,900 $            12,959     Unitholders     Operating income attributable to         $   0.13 $              0.14     Unitholders per unit - basic     Operating income attributable to         $   0.13 $              0.14     Unitholders per unit - diluted     FFO                                      $ 34,494 $            25,721     FFO per unit - basic                     $   0.28 $              0.28     FFO per unit- diluted                    $   0.28 $              0.28     FFO payout ratio (%)                        79.3%               79.5%     AFFO                                     $ 28,769 $            21,606     AFFO per unit - basic                    $   0.23 $              0.24     AFFO per unit - diluted                  $   0.23 $              0.23     Distributions                            $   0.22 $              0.22     AFFO payout ratio (%)                       95.1%               94.6%  The increase in FFO and AFFO for the three months ended March 31, 2014 was  primarily due to the 70 property Sobey / Safeway acquisition during the fourth  quarter of 2013 and completed redevelopment and land use intensification  projects during 2013, resulting in significant growth in property NOI, offset  in part by higher finance costs - operations.  The table below presents a summary of financial performance for the three  months ended March 31, 2014 compared to the same period in fiscal 2013.                                                      Three Months Ended March 31,     (In thousands of CAD dollars, except per     unit amounts and as otherwise noted)            2014              2013     Property revenue                          $   90,913 $          70,582     Property operating expenses                   29,554            26,818     Property NOI                                  61,359            43,764     NOI margin percentage                          67.5%             62.0%     Other items:                                                                 Gain (loss) on derecognition of              (157)               430       investment properties       Depreciation and amortization             (16,525)          (11,122)       General and administrative expenses        (3,756)           (3,206)     Operating income before finance costs and     40,921            29,866     taxes     Finance costs - operations                  (25,246)          (16,807)     Operating income before taxes                 15,675            13,059     Taxes - deferred                                 225             (100)     Operating income attributable to              15,900            12,959     Unitholders     Finance costs - distributions to            (27,355)          (20,438)     Unitholders     Finance income (costs) - change in fair           55               617     value of financial instruments     Decrease in net assets attributable to    $ (11,400) $         (6,862)     Unitholders  Growth Highlights                                          Initial                                         Purchase Occupancy                                  GLA       Price      Rate Key Tenants     Acquisitions                                                              in Q1     Penhorn Plaza Dartmouth NS                             Mr. Lube, Fast                                6,683 $ 1,490,000      100%          Fuels     Completed to                                                              date in 2014               6,683 $ 1,490,000            Since January 1, 2014, Crombie's GLA reflects a net decrease of 18,000 square  feet from acquisition and disposition activity. Crombie exchanged a property  in Alberta for another Alberta property, resulting in no net change in GLA. In  addition, Crombie disposed of part of an existing property in Nova Scotia,  resulting in a 25,000 square foot reduction in GLA and completed the above  acquisition of additional development property.    Operating Highlights                                      Three Months Ended March 31,               (In thousands of CAD       dollars)                                       2014      2013  Variance     Property NOI                     $           61,359 $  43,764 $  17,595     Non-cash                   straight-line rent                          (2,754)   (1,359)   (1,395)     Non-cash tenant            incentive     amortization                                  2,137     1,970       167     Property cash NOI                            60,742    44,375    16,367     Acquisition,               disposition and     redevelopment     property cash NOI                            19,541     4,175    15,366     Same-asset property        cash NOI                         $           41,201 $  40,200 $   1,001                                  Three Months Ended March 31,                         (In thousands of CAD       dollars)                    2014               2013  Variance   Percent     Retail Enclosed        $   6,492 $            6,061 $     431      7.1%     Retail Freestanding        8,533              8,181       352      4.3%     Retail Plaza              20,045             19,882       163      0.8%     Retail total              35,070             34,124       946      2.8%     Mixed Use                  3,155              3,166      (11)    (0.3)%     Office                     2,976              2,910        66      2.3%     Same-asset property        cash NOI               $  41,201 $           40,200 $   1,001      2.5%  Property NOI, on a cash basis, excludes straight-line rent recognition and  amortization of tenant incentive amounts. The 2.5% increase in same-asset cash  NOI for the three months ended March 31, 2014 is primarily the result of  increased average rent per square foot from leasing activity and rental rate  increases in existing leases as well as improved recovery rates and revenues  from land use intensifications at several properties.  During the first quarter of 2014, Crombie classified an investment property as  held for sale. The operating results for that property are included in  acquisition, disposition and redevelopment for the current and comparative  periods.  Crombie believes that cash NOI is a better measure of AFFO sustainability and  same-asset property performance.  Acquisition, disposition and redevelopment property cash NOI is as follows:                                     Three Months Ended March 31,               (In thousands of CAD dollars)       2014                2013  Variance     Acquisition and disposition     $ 17,998 $             1,926 $  16,072     property cash NOI     Redevelopment property cash NOI    1,543               2,249     (706)     Total acquisition, disposition  $ 19,541 $             4,175 $  15,366     and redevelopment property cash     NOI  The significant growth in Acquisition and disposition property cash NOI was  primarily due to the 70 property Sobeys / Safeway acquisition during the  fourth quarter of 2013.  Capital Highlights                                           Three Months Ended March 31,                                                2014               2013     Weighted Average Mortgage Term        7.9 years          7.7 years     Weighted Average Interest Rate            4.79%              5.09%     Debt to Gross Book Value (Fair Value)     53.1%              48.3%     Interest Coverage                          2.53               2.79     Debt Service Coverage                      1.69               1.85  Crombie's objectives when managing its capital structure are to optimize  weighted average cost of capital; maintain financial flexibility through  access to long-term debt and equity markets; and maintain ample liquidity. In  pursuit of these objectives, Crombie utilizes staggered debt maturities,  optimizes its ongoing exposure to floating rate debt, pursues a range of fixed  rate secured and unsecured debt and maintains sustainable payout ratios.  Crombie has an authorized floating rate revolving credit facility of up to  $285,000, subject to available borrowing base, of which $50,000 was drawn as  at March 31, 2014, and an additional $4,135 encumbered by outstanding letters  of credit, resulting in significant available liquidity.  Debt to gross book value on a fair value basis is 53.1% (including convertible  debentures) at March 31, 2014, compared to 48.3% at March 31, 2013.  General and Administrative Expenses  General and administrative expenses for the three months ended March 31, 2014,  as a percentage of property revenue, decreased by 0.4% from 4.5% to 4.1%, when  compared to the same period in 2013, reflecting the impact of significant  business growth during 2013.  Definition of Non-GAAP Measures  Certain financial measures included in this news release do not have  standardized meaning under IFRS and therefore may not be comparable to  similarly titled measures used by other publicly traded entities.  Crombie  includes these measures because it believes certain investors use these  measures as a means of assessing Crombie's financial performance.         --  Property NOI is property revenue less property operating             expenses.         --  Property Cash NOI is Property NOI adjusted to remove non-cash             straight-line rent and tenant incentive amortization.         --  Debt is defined as bank loans plus investment property debt,             senior unsecured notes and convertible debentures.         --  Gross book value means, at any time, the book value of the             assets of Crombie and its consolidated subsidiaries plus             deferred financing charges, accumulated depreciation and             amortization in respect of Crombie's properties (and related             intangible assets) and cost of any below-market component of             properties less (i) the amount of any receivable reflecting             interest rate subsidies on any debt assumed by Crombie; (ii)             subscription receipts held in trust; and (iii) the amount of             deferred income tax liability arising out of the fair value             adjustment in respect of the indirect acquisitions of certain             properties. Gross book value (fair value basis) differs from             gross book value as defined above in that it includes Crombie's             investment properties at fair value and excludes the book value             of investment properties and related accumulated depreciation             and amortization as well as intangible assets, tenant             incentives and accumulated straight-line rent receivable.         --  EBITDA is calculated as property revenue, adjusted to remove             the impact of amortization of tenant incentives, less property             operating expenses and general and administrative expenses.         --  FFO is calculated as Increase (decrease) in net assets             attributable to Unitholders (computed in accordance with IFRS),             excluding gains (or losses) from sales of depreciable real             estate, plus depreciation and amortization expense, deferred             income taxes, finance costs - distributions to Unitholders,             impairment charges and recoveries and change in fair value of             financial instruments.         --  AFFO is defined as FFO adjusted for non-cash amounts affecting             revenue, amortization of effective swap agreements, less             maintenance capital expenditures, maintenance tenant incentives             and deferred leasing costs, and the settlement of effective             interest rate swap agreements.  About Crombie  Crombie is an open-ended real estate investment trust established under, and  governed by, the laws of the Province of Ontario. Crombie currently owns a  portfolio of 250 retail and office properties across Canada, comprising  approximately 17.6 million square feet with a strategy to own and operate a  portfolio of primarily high quality grocery and drug store anchored shopping  centres and freestanding stores in Canada's top 36 markets.  This news release contains forward-looking statements that reflect the current  expectations of management of Crombie about Crombie's future results,  performance, achievements, prospects and opportunities. Wherever possible,  words such as "may", "will", "estimate", "anticipate", "believe", "expect",  "intend" and similar expressions have been used to identify these  forward-looking statements. These statements reflect current beliefs and are  based on information currently available to management of Crombie.  Forward-looking statements necessarily involve known and unknown risks and  uncertainties. A number of factors, including those discussed in the 2013  annual Management Discussion and Analysis under "Risk Management", could cause  actual results, performance, achievements, prospects or opportunities to  differ materially from the results discussed or implied in the forward-looking  statements. These factors should be considered carefully and a reader should  not place undue reliance on the forward-looking statements. There can be no  assurance that the expectations of management of Crombie will prove to be  correct. Readers are cautioned that such forward-looking statements are  subject to certain risks and uncertainties that could cause actual results to  differ materially from these statements. Crombie can give no assurance that  actual results will be consistent with these forward-looking statements.  Crombie's consolidated financial statements and management's discussion and  analysis for the three months ended March 31, 2014 can be found on Crombie's  web site at www.crombiereit.com or on the SEDAR web site for Canadian  regulatory filings at www.sedar.com.  Conference Call Invitation  Crombie will provide additional details concerning its three months ended  March 31, 2014  results on a conference call to be held Wednesday, May 14,  2014, at 12:00 p.m. Eastern time. To join this conference call you may dial  (647) 427-7450 or (888) 231-8191. You may also listen to a live audio web cast  of the conference call by visiting Crombie's website located at  www.crombiereit.com. Replay will be available until midnight May 28, 2014 by  dialing (416) 849-0833 or (855) 859-2056 and entering pass code 34849692, or  on the Crombie website for 90 days after the meeting.    SOURCE  Crombie REIT  Glenn Hynes, FCA Executive Vice President, Chief Financial Officer and  Secretary Crombie REIT (902) 755-8100  To view this news release in HTML formatting, please use the following URL:  http://www.newswire.ca/en/releases/archive/May2014/14/c7386.html  CO: Crombie REIT ST: Nova Scotia NI: ERN CONF REL  
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