BTB REIT seems to have got it right with portfolio restructure

by Steve Randall14 Aug 2019

Montreal-based BTB Real Estate Investment Trust says that its portfolio restructuring has resulted in strong results.

Same-property figures for the second quarter of 2019 show net property income up 7.4%, net operating income up 4.8%, and rental income up 4.6%.

It also saw a 3% increase in its committed occupancy rate to 93.1% at the end of June 2019 and almost 58,000 square feet of new leases were signed during the quarter.

"Approximately 18 months ago, we began the process of repositioning our portfolio. The hard work paid off,” said Michel Léonard, President and Chief Executive Officer. “We have almost completed our repositioning and, together with the increase of our occupancy rate, our performance indicators are showing the positive effect of our strategy. Indeed, after having sold 11 buildings and acquiring 6 better quality properties, BTB's recent acquisitions are now contributing to the bottom line.”

The REIT saw a 7.0% increase in average lease renewal rate during the quarter and of 6.5% since the beginning of the year. 230,000 square feet were renewed during the quarter (330,000 square feet since the beginning of the year).

And it posted a decrease of the mortgage debt ratio from 56.0% in 2018 to 54.9% at the end of the second quarter of 2019.

“Although we sold properties at capitalization rates higher than the properties purchased, the recently acquired properties are impacting positively our results,” added Léonard. “We are aware that during the repositioning, our performance suffered. However, as reflected in our second quarter financial results, we are beginning to see the effects of our strategy and these positive indicators will lead to a better financial performance of the Trust. We have always been confident that our portfolio repositioning was the right long-term strategy for BTB."

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