MONTRÉAL, Aug. 5, 2024 /CNW/ - BTB Real Estate Investment Trust (TSX:BTB) ("BTB", the "REIT" or the "Trust") announced today its financial results for the second quarter of 2024 ended June 30, 2024 (the "Second Quarter"). "This quarter has been marked by a strong performance across our portfolio, reflecting the effectiveness of our strategic initiatives and the dedication of our team." says Michel Léonard, President and CEO of BTB. "I am delighted to report that our occupancy rate reached a new record high of 94.6%, highlighting the success of our leasing efforts and our commitment to highquality properties and our investments in industrial properties. In addition, for the cumulative sixmonth period, rental revenue and same-property NOI increased by 0.5% and 1.5%, respectively, compared to the same period last year. These results are a testament to the organic growth of our portfolio and our property management. Our FFO adjusted and AFFO adjusted also saw positive growth compared to the previous quarter, reflecting the strong performance of our assets. Our debt ratio is improving, with a total ratio of 58.1% and a mortgage debt ratio of 51.4%, both down from December 31, 2023. In fact, we are spreading out our mortgage refinancing maturities to try to counteract the fluctuations in interest rates on mortgages of recent months, and with the latest announcements from the Bank of Canada, the outlook appears to bode well for future refinancings of our portfolio. This strategy demonstrates our proactive and prudent approach to debt management in the current environment. We remain committed to our strategic priorities, including targeted dispositions and acquisitions, prudent capital management and ongoing property improvements. We are confident that our discipline will continue to deliver strong results and drive long-term value creation for all of our stakeholders." SUMMARY OF SIGNIFICANT ITEMS AS AT JUNE 30th, 2024 Total number of properties: 75 Total leasable area: 6.1 million square feet Total asset value: $1,236 million Market capitalization: $274 million (unit trading price of $3.13 as at June 30, 2024) OPERATIONAL HIGHLIGHTS Periods ended June 30 Quarter Cumulative (6 months) 2024 2023 2024 2023 Occupancy – committed (%) 94.6 % 94.1 % - - Signed new leases (in sq.ft.) 40,080 125,223 98,142 192,423 Renewed leases at term (in sq.ft.) 158,445 164,189 250,236 207,735 Renewal rate (%) 88.7 % 70.2 % 79.6 % 60.0 % Renewed leases prior to the end of the term (in sq.ft.) 58,160 44,149 61,907 60,760 Average lease renewal rate 5.7 % 4.9 % 6.6 % 6.2 % During the quarter, the Trust completed a total of 216,605 square feet of lease renewals and 40,080 square feet of new leases. The occupancy rate increased to 94.6%, representing a 10 basis points increase compared to the prior quarter and a 50 basis points increase compared to the same period in 2023. The increase in the average rent renewal rate for the current quarter and current cumulative six-month period was respectively 5.7% and 6.6%. Shortly after the end of the quarter, Nuera Air, a tenant occupying 132,665 square feet in an industrial property located in Laval, Québec, declared bankruptcy. The Trust has already retained the services of a national commercial brokerage firm to lease the property. FINANCIAL RESULTS HIGHLIGHTS Periods ended June 30 Quarter Cumulative (6 months) (in thousands of dollars, except for ratios and per unit data) 2024 2023 2024 2023 $ $ $ $ Rental revenue 32,218 31,708 64,854 64,619 Net operating income (NOI) 18,856 19,041 37,216 38,049 Net income and comprehensive income 7,272 10,846 14,425 19,648 Adjusted EBITDA (1)1 17,539 17,956 34,576 35,110 Same-property NOI (1) 18,692 18,415 34,897 34,021 FFO Adjusted (1) 9,149 10,195 18,075 20,228 FFO Adjusted payout ratio 72.2 % 63.8 % 72.8 % 63.8 % AFFO Adjusted (1) 8,230 9,433 16,050 18,315 AFFO Adjusted payout ratio 80.2 % 69.0 % 82.0 % 70.5 % FINANCIAL RESULTS PER UNIT Net income and comprehensive income 8.3¢ 12.5¢ 16.4¢ 22.8¢ Distributions 7.5¢ 7.5¢ 15.0¢ 15.0¢ FFO Adjusted (1) 10.4¢ 11.8¢ 20.6¢ 23.5¢ AFFO Adjusted (1) 9.4¢ 10.9¢ 18.3¢ 21.3¢ Rental revenue: Stood at $32.2 million for the current quarter, which represents an increase of 1.6% compared to the same quarter of 2023. For the cumulative six-month period, rental revenue totalled $64.9 million which represents an increase of 0.5% compared to the same period in 2023. During Q1 2023, the Trust recorded a one-time $1.4 million increase of rental revenue pursuant to unrecorded revenue for previous quarters associated to a specific lease (the "One-Time Adjustment"). Excluding the One-Time Adjustment, rental revenue for current cumulative six-month period vs the same period in 2023 would have increased by 2.7%. Net Operating Income (NOI): Totalled $18.9 million for the current quarter, which represents a decrease of 0.5% compared to the same quarter of 2023. The decrease for the quarter is partially related to the bankruptcy of a tenant in Quebec City, Énergie Cardio (causing a negative impact of $0.2 million); which space was rapidly leased to the group that purchased the assets of the business of the bankrupt tenant, taking possession of the space in September 2024. For the cumulative six-month period, the NOI totalled $37.2 million which represents a decrease of 2.1% compared to the same period in 2023. Excluding the One-Time Adjustment, the cumulative six-month period NOI for Q2 2024 vs the same period in 2023 would have increased by 1.6%. Net income and comprehensive income: Totalled $7.3 million for the quarter compared to $10.8 million for the same period in 2023, representing a decrease of $3.5 million. The decrease for the quarter is primarily due to an increase in net financial expenses of $2.6 million, an increase in administrative expenses of $0.8 million and a decrease in NOI of $0.2 million. For the 2024 cumulative six-month period, net income and comprehensive income totalled $14.4 million compared to $19.7 million, representing a decrease of $5.3 million. Excluding the One-Time Adjustment, the decrease for the cumulative six-month period from Q2 2024 vs Q2 2023 would have been $3.8 million. Same-property NOI (1): For the quarter, the same-property NOI increased by 1.5% compared to the same period in 2023, and for the cumulative six-month period, the same-property NOI increased by 2.6% compared to the same period in 2023. The increases are due to an increase of rental rates for lease renewals of 5.7% for the cumulative six-month period in the industrial segment as well as an increase in rental spreads for in-place leases, an increase of rental rates for lease renewals of 7.7% for the cumulative six-month period in the suburban office segment and an increase of rental rates for lease renewals of 6.0% for the cumulative six-month period in the necessity-based retail segment. FFO adjusted per unit (1): Was 10.4¢ per unit for the quarter compared to 11.8¢ per unit for the same period in 2023, representing a decrease of 1.4¢ per unit. The decrease of FFO adjusted for the quarter is explained by an increase in interest expense net of financial income of $0.3 million, an NOI decrease of $0.2 million and an increase in administration expenses of $0.5 million. For the cumulative six-month period, the FFO adjusted was 20.6¢ per unit compared to 23.5¢ per unit for the same period in 2023, representing a decrease of 2.9¢ per unit. Excluding the One-Time adjustment, the cumulative six-month period FFO adjusted per unit vs the same period in 2023 would have recorded a decrease of 1.2¢ per unit. In addition, FFO adjusted per unit was negatively impacted by an increase in the weighted average number of units outstanding of 1.5 million units, due to the unitholder's participation in the distribution reinvestment plan. FFO adjusted payout ratio (1): Was 72.2% for the quarter compared to 63.8% for the same period in 2023, an increase of 8.4%. For the cumulative six-month period, the FFO adjusted payout ratio was 72.8% compared to 63.8% for the same period in 2023, an increase of 9%. Excluding the One-Time Adjustment, the cumulative six-month period FFO adjusted payout ratio vs the same period in 2023 would have increased by 4.9%. AFFO adjusted per unit (1): Was 9.4¢ per unit for the quarter compared to 10.9¢ per unit for the same period in 2023, representing a decrease of 1.5¢ per unit, in line with the decrease of the FFO adjusted explained above. For the cumulative six-month period, the AFFO adjusted per unit was 18.3¢ per unit compared to 21.3¢ per unit for the same period in 2023, representing a decrease of 3.0¢ per unit compared to the same period in 2023. Excluding the One-Time Adjustment, the cumulative six-month period AFFO adjusted per unit would have decreased by 1.3¢ per unit. AFFO adjusted per unit was also negatively impacted by the increase in weighted average number of units outstanding of 1.5 million units, due to the unitholder's participation in the distribution reinvestment plan. AFFO adjusted payout ratio (1): Was 80.2% for the quarter compared to 69.0% for the same period in 2023. For the cumulative six-month period, the AFFO adjusted payout ratio was 82.0% compared to 70.5% for the same period in 2023, representing an increase of 11.5%. Excluding the One-Time adjustment, the cumulative six-month period AFFO adjusted payout ratio vs the same period in 2023 would have increased by 5.5%. BALANCE SHEET AND LIQUIDITY HIGHLIGHTS Periods ended June 30 Cumulative (6 months) (in thousands of dollars, except for ratios and per unit data) 2024