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Primaris REIT sees decline in fourth-quarter profits as it books takeover charge

TORONTO – Primaris Retail REIT (TSX:PMZ.UN) said Thursday its fourth-quarter profits fell to $61.1 million, as it logged a lower book value for some properties as well as a one-time takeover charge.

The results are less than half of the $156.4 million in profit reported a year ago. Funds from operations dropped to 31.1 cents per unit from 42 cents per unit.

Revenue totalled $109.4 million for the period ended Dec. 31, up from $104 million for the previous year.

The real estate trust said its net operating income was $45.4 million, compared with $55.3 million.

Primaris was “pleased” with its strong operating results, said president and CEO John Morrison.

“Our tenant sales trend has turned positive, having begun the year in negative territory,” he said in a statement.

Primaris said it had to include a $10.5 million non-recurring charge related to a takeover, which impacted its funds from operations.

Last month, two rival groups competing to purchase Primaris came to a $4.6-billion compromise.

Some of Primaris properties will be bought by the KingSett Capital consortium while H&R Real Estate Investment Trust (TSX:HR.UN) will end up owning Primaris and the rest of its portfolio.

Also in February, Primaris announced that it was paying $377 million to buy nine shopping centres in Alberta from Sherwood Park Mall Ltd., Markalta Developments Ltd. and Sleeping Bay Building Corp.

Primaris owns 33 properties across Canada, including shopping centres in Alberta, Manitoba, Quebec and Ontario comprising some 13.7 million square feet and a 97 per cent occupancy rate. Several of the locations will be housing U.S. retailer Target when it officially enters the Canadian market later this month.