BOARDWALK REIT REPORTS SOLID SECOND QUARTER RESULTS WITH STRONG QUARTERLY SEQUENTIAL REVENUE GROWTH

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SUMMARY HIGHLIGHTS FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2022

  • STRONG FINANCIAL PERFORMANCE

FOR THE 3 MONTH PERIOD ENDED JUNE 30, 2022

FOR THE 6 MONTH PERIOD ENDED JUNE 30, 2022

  • SOLID OPERATIONAL PERFORMANCE DRIVEN BY IMPROVING REVENUE GROWTH

  • LEASING CONTINUES TO STRENGTHEN

  • STRONG AND FLEXIBLE FINANCIAL POSITION

  • ACCRETIVE AND STRATEGIC CAPITAL ALLOCATION

  • UPDATE TO 2022 FINANCIAL GUIDANCE

  • DISTRIBUTION OF $1.08 PER TRUST UNIT ON AN ANNUALIZED BASIS CONFIRMED FOR THE MONTHS OF AUGUST, SEPTEMBER, AND OCTOBER 2022

(1)

Please refer to the section titled "Presentation of Non-GAAP Measures" in this Earnings Release for more information.

(2)

Same property figures exclude un-stabilized properties (properties which have been owned for less than 24 months) and sold assets.





CALGARY, AB, Aug. 9, 2022 /CNW/ - Boardwalk Real Estate Investment Trust (TSX: BEI.UN)

Boardwalk Real Estate Investment Trust ("Boardwalk", the "REIT" or the "Trust") today announced its financial results for the second quarter of 2022.

Sam Kolias; Chairman and Chief Executive Officer of Boardwalk REIT commented:

"We are pleased to report on another solid quarter, with growth in Net Operating Income ("NOI"), Funds From Operations ("FFO"), and Profit through our spring and early summer leasing season.

As we look forward to the remainder of the summer, we have seen significant leasing gains with our August occupancy increasing to 97.1%. Leasing spreads on both renewals and new leases have seen strong improvement. In our largest market of Alberta, renewal and new lease spreads increased to 5.0% and 6.8%, respectively, in the month of July. New lease spreads continue to accelerate across our portfolio with rental housing fundamentals improving in each of our markets allowing for incentive reductions and positive rental rate growth.

Higher cost inflation and interest rates have provided a headwind to community providers to-date in 2022, however, our portfolio of affordable, non-price controlled, and high-quality apartment communities remains positioned to produce sustainable rental rate adjustments that allow Boardwalk to further build on our strong financial foundation. Financial sustainability is essential to provide our Resident Members with the best product quality, service and experience."

SECOND QUARTER FINANCIAL HIGHLIGHTS

$ millions, except per unit amounts


Highlights of the Trust's Second Quarter 2022 Financial Results



3 Months
Jun. 30,
2022


3 Months
Jun. 30, 2021


%
Change


6
Months
Jun. 30,
2022



6 Months
Jun. 30, 2021


% Change


Operational Highlights














Rental Revenue

$

122.3


$

117.6



4.0

%

$

240.6



$

233.4



3.1

%

Same Property Rental Revenue

$

118.1


$

114.3



3.4

%

$

233.8



$

227.6



2.7

%

Net Operating Income (NOI)

$

72.6


$

69.6



4.2

%

$

137.5



$

133.5



3.0

%

Same Property NOI

$

70.9


$

69.0



2.8

%

$

135.8



$

133.1



2.1

%

Operating Margin (1)


59.4

%


59.2

%




57.2

%



57.2

%



Same Property Operating Margin


60.0

%


60.4

%




58.1

%



58.5

%

















Financial Highlights














Funds From Operations (FFO) (2)(3)

$

40.3


$

38.2



5.6

%

$

74.8



$

71.4



4.8

%

Adjusted Funds From Operations (AFFO) (2)(3)

$

32.2


$

29.8



8.1

%

$

58.6



$

54.5



7.5

%

Profit

$

152.5


$

50.6



201.3

%

$

221.9



$

79.6



178.8

%

FFO per Unit (3)

$

0.80


$

0.75



6.7

%

$

1.48



$

1.40



5.7

%

AFFO per Unit (3)

$

0.64


$

0.58



10.3

%

$

1.16



$

1.07



8.4

%















Regular Distributions Declared (Trust Units & LP Class B
Units)

$

13.6


$

12.8



6.5

%

$

26.6



$

25.5



4.2

%

Regular Distributions Declared Per Unit (Trust Units &
LP Class B Units)

$

0.270


$

0.250



7.9

%

$

0.527



$

0.500



5.3

%

FFO Payout Ratio (3)


33.8

%


33.5

%




35.6

%



35.8

%

















Stabilized Apartment Suites








32,787




33,033




Un-Stabilized Suites








777




480




Total Apartment Suites








33,564




33,513




(1)

Operating margin is calculated by dividing NOI by rental revenue allowing management to assess the percentage of rental revenue which generated profit.

(2)

This is a non-GAAP financial measure.

(3)

Please refer to the section titled "Presentation of Non-GAAP Measures" in this Earnings Release for more information.

Continued Highlights of the Trust's Second Quarter 2022 Financial Results



Jun. 30, 2022



Dec. 31, 2021


Equity






Unitholders' Equity

$

3,433,306



$

3,253,178








Net Asset Value






Net asset value (1)(2)

$

3,521,659



$

3,412,130


Net asset value per Unit (2)

$

70.03



$

66.87








Liquidity, Debt and Distributions






Cash and cash equivalents

$

32,125





Subsequent committed/funded financing

$

32,100





Unused committed revolving credit facility

$

199,750





Total Available Liquidity

$

263,975











Total mortgage principal outstanding

$

3,239,088



$

3,088,978


Interest Coverage Ratio (Rolling 4 quarters)


3.00




2.97











(1)

This is a non-GAAP financial measure.

(2)

Please refer to the section titled "Presentation of Non-GAAP Measures" in this Earnings Release for more information.

The Trust's IFRS fair value of its investment properties as at June 30, 2022 increased from the previous quarter and year end, primarily as a result of increased market rents and a decrease in the vacancy rates in some of its markets reflecting improving rental fundamentals. During the second quarter, the Trust also increased some of its operating expense assumptions in its fair value model to account for recent inflation.

SOLID OPERATIONAL RESULTS

Portfolio Highlights for the Second Quarter of 2022



Jun-22


Jun-21


Average Occupancy (Quarter Average) (1)


96.44

%


95.90

%






Average Monthly Rent (Period Ended)

$

1,192


$

1,144


Average Market Rent (Period Ended) (2)

$

1,373


$

1,334


Average Occupied Rent (Period Ended) (3)

$

1,228


$

1,191







Loss-to-Lease (Period Ended) ($ millions)

$

55.3


$

54.9


Loss-to-Lease Per Trust Unit (Period Ended)

$

1.10


$

1.07







(1)

Average occupancy is adjusted to be on a same property basis.

(2)

Market rent is a component of rental revenue as calculated in accordance with IFRS and is calculated as of the first day of each month as the average rental revenue amount a willing landlord might reasonably expect to receive, and a willing tenant might reasonably expect to pay, for a tenancy, before adjustments for other rental revenue items such as incentives, vacancy loss, fees, specific recoveries, and revenue from commercial tenants.

(3)

Occupied rent is a component of rental revenue as calculated in accordance with IFRS and is calculated for occupied suites as of the first day of each month as the average rental revenue, adjusted for other rental revenue items such as fees, specific recoveries, and revenue from commercial tenants.


Jul-21

Aug-21

Sep-21

Oct-21

Nov-21

Dec-21

Jan-22

Feb-22

Mar-22

Apr-22

May-22

Jun-22

Jul-22

Aug-22

Stabilized
Property
Portfolio
Occupancy

95.9 %

96.1 %

96.2 %

96.1 %

95.7 %

95.7 %

95.6 %

95.5 %

95.5 %

95.8 %

96.6 %

96.9 %

97.0 %

97.1 %

The Trust maintained high occupancy compared to the same period a year ago by focusing on gaining market share and retention. Market rents were adjusted in communities within some of the Trust's markets where rental market fundamentals continue to tighten. Average occupied rent increased sequentially and when compared to the same period a year ago as the Trust focuses on reducing incentives on lease renewals and minimizing incentives on new leases in its stronger markets.

For the second quarter of 2022, a same property rental revenue increase of 3.4% combined with same property total rental expense increase of 4.2%, resulted in same property NOI growth of 2.8%.

During the quarter, lower vacancy loss and incentives supported Boardwalk's Calgary portfolio increase in same property NOI of 7.2%, while in Edmonton, cost savings from lower property taxes were offset by higher operating expenses and utilities expense resulting in slightly negative NOI growth for the second quarter of 2022 compared to the second quarter of 2021. With the increased rental demand in Edmonton during the spring and summer leasing season, the Trust incurred higher operating expenses to meet demand, positioning the Trust with higher occupancy heading into the fall. Saskatchewan's market continues to improve with the Trust's portfolio realizing 9.1% same property NOI growth in the second quarter of 2022 versus the same period last year, as a result of strong same property revenue growth and a reduction in expenses related to TV and internet services provided to Boardwalk's Resident Members in the province. In Ontario, the mark-to-market opportunity on turnover, offset by growth in non-controllable and controllable expenses, contributed to same property NOI growth of 5.4%, in the second quarter of 2022 compared to the second quarter of 2021. In Quebec, increases in non-controllable expenses such as property taxes, utilities and insurance and certain controllable expense categories offset positive same property revenue growth resulting in same property NOI remaining flat for the second quarter of 2022 compared to the second quarter of 2021.

Jun. 30 2022 - 3 M

# of Suites


% Rental
Revenue Growth


% Total Rental
Expenses Growth


% Net Operating
Income Growth


% of NOI


Edmonton


12,882



1.6

%


4.3

%


(0.6)

%


34.0

%

Calgary


5,879



5.5

%


2.4

%


7.2

%


22.6

%

Red Deer


939



3.7

%


1.4

%


5.7

%


2.3

%

Grande Prairie


645



(1.9)

%


3.9

%


(6.8)

%


1.4

%

Fort McMurray


352



3.2

%


0.8

%


5.0

%


1.0

%

Alberta


20,697



2.8

%


3.5

%


2.3

%


61.3

%

Quebec


6,000



3.7

%


11.2

%




19.4

%

Saskatchewan


3,505



4.8

%


(1.9)

%


9.1

%


11.6

%

Ontario


2,585



4.9

%


4.1

%


5.4

%


7.7