Loblaw spinoff Choice Properties reports $1.5M Q2 net loss; adjusted profit $39.4M

BRAMPTON, Ont. – Choice Properties Real Estate Investment Trust (TSX: CHP.UN), citing a $52.3-million non-cash finance charge, has reported a second-quarter net loss of $1.5 million or less than a penny per diluted unit.

The REIT, which was spun off as a separate business last year by Loblaw Companies Ltd. (TSX:L), said reversing that charge and discounting an $11.3-million gain for fair value adjustment, its adjusted profit was $39.4 million.

Rental revenue totalled $179.3 million.

Occupancy at the end of June was 97.7 per cent, unchanged from Dec. 31.

“I am pleased to report another solid quarter for Choice Properties,” president and CEO John Morrison said a statement accompanying the results, which were released after markets closed.

“It has been just over a year since our initial public offering and we have exceeded our first full 12-month FFO (funds from operations) forecast by 6.7 per cent, excluding . . . (the) non-cash finance charge related to the replacement of transferor notes.”

In its outlook, the company said it “believes that the current Canadian retail and commercial real estate markets are relatively stable and present development, acquisition and improved tenancy potential for future growth.”

“As a result, the Trust expects to execute on its opportunities to develop and redevelop existing at-grade excess density, acquire assets from a dedicated pipeline from Loblaw’s remaining portfolio and strengthen its underlying operations through improved leasing strategies and active property management.”

Choice Properties current portfolio spans approximately 37.6 million square feet of gross leasable area and consists of 456 properties primarily focused on supermarket-anchored shopping centres and stand-alone supermarkets. It principal tenant and largest unitholder is Loblaw, Canada’s largest retailer.

On Toronto Stock Exchange, Choice units closed up seven cents Monday at $10.73.