Artis hoping to rely less on Alberta
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Hey there, time traveller!
This article was published 02/03/2016 (3542 days ago), so information in it may no longer be current.
Artis Real Estate Investment Trust (REIT) is looking to sell some of its Alberta properties to allay concerns it’s too heavily dependent upon the region.
Alberta properties currently account for about 35 per cent of the 26.2-million square feet of office, retail and industrial space in the Winnipeg-based REIT’s property portfolio.
President and CEO Armin Martens said in a conference call Tuesday with analysts it appears the capital markets would prefer to see that ratio reduced to 25 to 30 per cent.
“So we are looking to be able to do that in a way that is smart. We’re not going to sell at a fire-sale price. But we are looking at ways to reduce our allocation or weighting in Alberta because we sense the market would like it.”
He noted Alberta’s commercial real estate market is depressed right now because of last year’s plunge in oil prices. So Artis may be better to wait until the market starts to rebound before selling some of its properties.
However, “there is a shortage of assets and a lot of (investment) money out there looking for a home.” he added. “If I can get good value now for an asset… I might not wait for things to improve.”
Tuesday’s conference call was held to discuss Artis’s fourth-quarter and year-end financial results for 2015. They showed revenues for the year grew by 8.6 per cent to $552.5 million, including a 6.7 per cent increase in the fourth quarter alone.
Funds from operations (FFO), which is the term trusts use to indicate their financial performance, rose by 11.6 per cent to $215.9 million, including a 7.7 per cent gain in the fourth quarter.
“These are challenging times, no doubt about it,” Martens said. “But we’re pleased with our results and we are confident about our outlook.”
He also told analysts because of the ongoing struggles within the Alberta economy, its properties there aren’t worth as much as they were a year ago. So the company has recorded a $387 million write-down in the value of its those assets.
In addition to Alberta, Artis also owns commercial properties in British Columbia, Saskatchewan, Manitoba, Ontario and the United States. Martens said its U.S. properties, which account for nearly 30 per cent of its portfolio, are performing well.
murray.mcneill@freepress.mb.ca