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BTB REIT’s recent accretive acquisitions contributed to a 20% FFO per unit growth for the first quarter of 2022

BTB REIT’s recent accretive acquisitions contributed to a 20% FFO per unit growth for the first quarter of 2022

Montréal (Québec) May 9th, 2022: BTB Real Estate Investment Trust (TSX: BTB.UN) (“BTB” or the “REIT”) releases today its financial results for the first quarter of the year 2022, compared to the same period of 2021, and announces the following highlights and information.

Acquisitions concluded during 2021 made a notable contribution to the first quarter of 2022. Overall, BTB’s revenues increased by 23.5% and the net operating income by 33%, demonstrating another quarter with solid results.

  • Net income and comprehensive income: Totalled $6.4M for the quarter compared to $2.5M for the same period in 2021, representing an increase of $3.9M that can be attributed to the acquisitions concluded in 2021.
  • Rental revenue: Stood at $29.1M, which represents an increase of 23.5% compared to the same quarter of 2021.
  • Net Operating Income (NOI): Was $16.2M for the quarter which represents an increase of 30.8% compared to the same quarter of 2021.
  • Recurring FFO payout ratio1 : Was 70.2% for the quarter compared to 84.0% for the same period in 2021.
  • Recurring FFO1 : Was 10.7¢ per unit for the quarter compared to 8.9¢ per unit for the same period in 2021. FFO was positively impacted by the acquisitions concluded in 2021, the improvement of occupancy rates across all business segments, the increase in average renewal rates and reduced provision for credit losses.
  • Recurring AFFO payout ratio1 : Was at 76.8% for the quarter compared to 87.4% for the same period in 2021.
  • Recurring AFFO1 : Was 9.7¢ per unit for the quarter compared to 8.6¢ per unit for the same period in 2021. The increase for the quarter is mainly due to acquisitions concluded in 2021.
  • Acquisitions: On January 7th, 2022, BTB acquired two Class A office properties, located at 979 and 1031 Bank Street in Ottawa, Ontario, representing a total leasable area of 116,226 sq. ft. for a total consideration of $38.1M, excluding transaction costs and adjustments. The revenue from this acquisition contributed to the Q1 financial results.
  • Dispositions: On January 27th, 2022, BTB disposed of four industrial properties located on Boundary Road and Marleau Avenue in Cornwall, Ontario for total proceeds of $26M, excluding transaction costs and adjustments.
  • Leasing Activity: BTB experienced strong leasing activity during the quarter. At the end of Q1 2022, the occupancy rate was at 93.1%.
    • Lease renewals: 175,484 sq. ft. of leases were renewed of which, 119,138 sq. ft. were renewed before the end of their term and
      56,346 sq. ft. were renewed in anticipation of the end of their term for the years 2023 and after. 51.9% of lease renewals were concluded in the
      off-downtown core segment.
    • New leases: 17,560 sq. ft. were leased to new tenants in the off-core office properties segment. Rental rates for this segment increased by 19.6% during Q1 2022.
  • Same-property NOI1Increased by 2% for Q1 of 2022 compared to the same period in 2021, mainly due to a combination of important leasing efforts made during previous quarters, resulting in an increase of the occupancy rate compared to the same quarter last year and an increase in the average lease renewal rate.
  • Debt metrics: BTB concluded the quarter with a total debt ratio1 of 60.3%, impacted by the temporary use of its acquisition credit facility, however, recording an improvement of 0.2% compared to the previous quarter. Following the completion of the bought deal on March 30th, 2022, the REIT repaid, on April 5th, 2022, the revolving credit facility by an amount of $30.9M, which reduced the total debt ratio to 58.6%.
  • Liquidity position: BTB concluded the quarter with a cash position of $40.7M and has a total of $47.7M available on its two credit facilities2.
  • Bought deal public offering: BTB issued 9,584,100 trust units at a price of $4.20 per unit for gross proceeds of approximately $40.3M. The offering closed on March 30th, 2022.
  • Collection rate: BTB collected 96.1% of invoiced rent during Q1 2022, demonstrating the strong fundamentals of its properties. The slight decrease in the collection rate was caused by the issuance of the year end reconciliation invoices to its tenants that the Trust didn’t yet collect (timing effect). BTB’s portfolio continued to show positive results through all asset classes and geographies.

(1) Non-IFRS financial measure. See Appendix 1.

(2) Credit facilities is a term used that reconciles with the bank loans as presented and defined in the Trust’s consolidated financial statements.

A MESSAGE FROM MICHEL LÉONARD, PRESIDENT, AND CHIEF EXECUTIVE OFFICER

The first quarter of 2022 shows solid results. We note the strong contribution from our 2021 acquisitions which are reflected in our first quarter results. Our revenue increased by 23% and net operating income by 33%. Our robust results support our growth and expansion strategy. BTB’s portfolio continues to show stability across all its asset classes and geographies with an occupancy rate of 93.1% at the end of the first quarter. We’re continuing to push forward with our business strategies and subsequent acquisitions.

SUBSEQUENT EVENTS

New acquisition of an industrial building: On April 5th, 2022, BTB concluded the acquisition of an industrial property located at 1100 Algoma Road in Ottawa, Ontario. Acquired for the purchase price of $12.5M, excluding transaction costs and adjustments. This acquisition was funded from the existing undrawn capacity on the REIT’s credit facilities and available liquidity. The property increased the total leasable area by
46,400 sq. ft and is 100% occupied.

SUMMARY OF SIGNIFICANT ITEMS AS AT MARCH 31st, 2022

  • Total number of properties: 73
  • Total leasable area: approximately 5.7 million sq. ft.
  • Total asset value: $1,183 million
  • Market capitalization: $360 million

FINANCIAL INFORMATION

The following two tables summarize our results for the quarters ended March 31, 2022, and 2021.

Quarterly Financial Results

Reconciliation of Cash Flows from Operating Activities and Adjusted Funds from Operations (AFFO) 1

QUARTERLY CALL INFORMATION

Management will hold a conference call on Tuesday, May 10th, 2022, at 9 am, Eastern Time, to present BTB’s financial results and performance for the first quarter of 2022.

DATE: Tuesday, May 10th, 2022
TIME: 9 am, Eastern Time
DIAL: Toronto and over-seas: 1-416-764-8688
North America (toll-free): 1-888-390-0546
WEB: https://produceredition.webcasts.com/starthere.jsp?ei=1543285&tp_key=a8067e7f09
VISUAL: A presentation will be uploaded on BTB’s website prior to the call

https://www.btbreit.com/investor-relations-2/annual-meeting-presentations/

The media and all interested parties may attend the call-in listening mode only. Conference call operators will coordinate the question-and-answer period (from analysts only) and will instruct participants regarding the procedures during the call.

The audio recording of the conference call will be available via playback untilMay 17th, 2022, by dialing: 1 416 764-8677 (local) or, 1 888 390-0541 (toll-free) and by entering the following access code: 159528 #.

ABOUT BTB

BTB is a real estate investment trust listed on the Toronto Stock Exchange. BTB is a property owner active in eastern and western Canada and owns 73 properties, representing a total leasable area of approximately 5.7M square feet and a total asset value that surpasses $1.183B.

BTB offers a distribution reinvestment plan to unitholders whereby the participants may elect to have their monthly cash distribution reinvested in additional units of BTB at a price based on the weighted average price for BTB’s Units on the Toronto Stock Exchange for the five trading days immediately preceding the distribution date, discounted by 3%.

For more detailed information, visit BTB’s website at www.btbreit.com.

 FOR FURTHER QUESTIONS

Stéphanie Léonard, Director of Communications
(T) 514-286-0188 x256
(C) sleonard@btbreit.com

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements with respect to BTB. These statements generally can be identified by the use of forward-looking words such as “may”, “will”, “expect”, “estimate”, “anticipate”, “intend”, “believe” or “continue” or the negative thereof or similar variations. The actual results and performance of BTB could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulation, and the factors described from time to time in the documents filed by BTB with the securities regulators in Canada. The cautionary statements qualify all forward-looking statements attributable to BTB and persons acting on their behalf. Unless otherwise stated or required by applicable law, all forward-looking statements speak only as of the date of this press release.