Nexus Industrial REIT Announces Third Quarter 2024 Financial Results
Industrial weighting increasing as legacy assets are sold
Net Operating Income grows 11.0% as recent investments yield returns
TORONTO, Nov. 11, 2024 (GLOBE NEWSWIRE) -- Nexus Industrial REIT (the "REIT") (TSX:NXR) announced today its results for the third quarter ended September 30, 2024.
"This quarter we continued to execute against our plan, and I am thrilled with our progress." said Kelly Hanczyk, CEO of Nexus Industrial REIT.
"We sold our Old Montreal office portfolio and have our legacy retail and non-core industrial properties under firm sales contracts that are expected to close by the end of the year. These dispositions strengthen our balance sheet and also advance our strategy as a Canada-focused, pure-play industrial REIT.
"Industrial assets now contribute 94% of our NOI on a proforma basis, and our concentration will be nearly 100% industrial upon closing the remaining dispositions. Combined, we are targeting asset sales of approximately $110 million in the second half of 2024," continued Mr. Hanczyk.
"We have also resolved two key vacancies and fully leased our new Titan Park property, exceeding business case. We completed construction at our Hubrey Road and Glover Road development projects, and our St. Thomas project remains on track for completion in the first quarter of 2025. Combined, these four developments will add over $10 million of stabilized NOI annually."
Third Quarter 2024 Highlights:
Net loss was $46.0 million driven by net operating income ("NOI")(1) of $32.6 million, loss on fair value adjustments of Class B LP Units of $47.5 million, loss on fair vale adjustment of derivative financial instruments of $22.2 million and gain on fair value adjustment of investment properties of $11.1 million.
NOI increased 11.0% year over year to $32.6 million from the acquisition of high-quality, tenanted income-producing industrial properties, and growth in industrial Same Property NOI which totaled $1.4 million or 5.6% compared to a year ago (1).
Completed the sale of six Old Montreal office properties and contracted for the sale of the legacy retail portfolio, three non-core industrial properties, vacant land, and the remaining Old Montreal office properties.
Completed construction and tenanted the new 96,000 sq. ft. intensification industrial project in London, ON, and completed construction of the new 115,000 sq. ft. development in Hamilton, ON.
Completed the lease-up of the newly constructed 325,000 sq. ft. industrial development in Regina, SK. The property will contribute annual stabilized NOI(1) of $3.8 million, exceeding the original investment plan.
Normalized FFO(1) per unit was $0.188 and Normalized AFFO(1) per unit was $0.158, a reduction of $0.010 and $0.007 versus a year ago.
NAV(1) per unit of $13.06 grew $0.17 or 1.3% versus a year ago.
Subsequent events:
Completed the sale of one office property and one mixed-use industrial property in which the REIT held a 50% ownership interest.(1) Non-IFRS Financial Measure
Summary of Results
(In thousands of Canadian dollars, except per unit amounts)
Three months ended September 30,
Nine months ended September 30,
2024
2023
2024
2023
$
$
$
$
FINANCIAL INFORMATION
Operating Results
Property revenues
45,529
39,752
131,036
115,647
Net operating income (NOI) (1)
32,568
29,331
93,722
82,748
Net (loss) Income
(45,991
)
76,954
41,205
157,893
Funds from operations (FFO) (1)
17,613
18,060
48,544
51,283
Normalized FFO (1) (2)
17,717
17,887
49,602
51,604
Adjusted funds from operations (AFFO) (1)
14,795
15,072
40,153
43,120
Normalized AFFO (1) (2)
14,899
14,899
41,211
43,441
Distributions declared (3)
15,063
14,477
44,973
42,711
Same Property NOI (1)
28,012
26,857
72,543
70,727
Industrial Same Property NOI (1)
26,262
24,858
67,312
65,028
Weighted average units outstanding (000s):
Basic (4)
94,137
90,452
93,675
88,844
Diluted (4)
94,313
90,554
93,851
88,946
Per unit amounts:
Distributions per unit, basic (3) (4)
0.160
0.160
0.480
0.480
Distributions per unit, diluted (3) (4)
0.160
0.160
0.480
0.480
Normalized FFO per unit, basic (1) (2) (4)
0.188
0.198
0.530
0.581
Normalized FFO per unit, diluted (1) (2) (4)
0.188
0.198
0.529
0.580
Normalized AFFO per unit, basic (1) (2) (4)
0.158
0.165
0.440
0.489
Normalized AFFO per unit, diluted (1) (2) (4)
0.158
0.165
0.439
0.488
AFFO payout ratio, basic (1) (3)
101.8%
96.1%
112.0%
99.1%
Normalized AFFO payout ratio, basic (1) (2) (3)
101.1%
97.2%
109.1%
98.3%
SPNOI Growth % (1)
4.3%
2.5%
2.6%
4.1%
Industrial same Property NOI Growth % (1)
5.6%
0.5%
3.5%
4.4%
As at September 30, 2024 and December 31, 2023
2024
2023
$
$
PORTFOLIO INFORMATION
Total Portfolio
Number of Investment Properties(5)
113
116
Number of Properties Under Development
1
4
Investment Property Fair Value (excludes assets held for sale)
2,449,960
2,364,027
Gross leasable area ("GLA") (in millions of sq. ft.) (at the REIT's ownership interest)
13.0
12.5
Industrial occupancy rate, in-place and committed (period-end)(6)
97%
97%
Weighted average lease term ("WALT") (years)
6.8
6.9
Estimated spread between industrial portfolio market and in-place rents
26.3%
29.0%
FINANCING AND CAPITAL INFORMATION
Financing
Net debt
1,305,513
1,203,432
Net Indebtedness Ratio
49.98%
48.90%
Interest coverage ration (times)
1.60
1.72
Secured Indebtedness Ratio
28.6%
30.4%
Unencumbered investment properties as a percentage of investment properties
40.8%
35.6%
Total assets
2,612,258
2,463,067
Cash and cash equivalents
7,823
5,918
Capital
Total equity (per condensed consolidated financial statements)
1,023,338
1,000,329
Total equity (including Class B LP Units)
1,229,581
1,199,434
Total number of Units (in thousands)
94,152
93,201
