TORONTO - RioCan Real Estate Investment Trust (TSX:REI.UN) says net earnings attributed to unitholders declined in its most recent quarter to $163 million from $343 million.
However, the owner of Canada's largest portfolio of shopping centres says operating funds from operations produced "record results," rising 20 per cent in the three months ended March 31 to $124 million from $103 million in the same quarter in 2012.
On a per unit basis, operating FFO increased 11 per cent to 41 cents per unit from 37 cents.
RioCan said the main reasons for the increase included a $19-million increase in net operating income due to acquisitions, same property growth of 0.3 per cent in Canada and 1.4 per cent in the United States and the completion of greenfield developments. Operating FFO also benefited from higher development fees of $5 million in the quarter.
The increases were partially offset by increased interest expenses of $2 million related to acquisitions and higher general and administrative expenses of $1 million.
"I am pleased with our results for the first quarter and we are on course to achieve our goals for the year," CEO Edward Sonshine said.
"So far in 2013, RioCan has accessed the unsecured debt markets twice at attractive rates and has been able to proactively manage our debt maturity schedule by redeeming our 2015 maturity," Sonshine said.
Meanwhile, he said moves to pare assets to improve RioCan's overall portfolio and secure the best growth prospects in the long term have been progressing well and are "providing the necessary capital to complete a number of exciting enclosed mall acquisitions."
"In addition, we have a number of exciting and high profile development projects in our pipeline that will secure future growth for RioCan," he said.
Since March 31 RioCan has completed the purchase of four properties in Canada at an aggregate purchase price of $418 million and has sold or has under firm contract to sell four properties for $364 million.
RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $14.4 billion as of March 31, including ownership interests in a portfolio of 344 retail properties across the country with more than 84 million square feet of leasable space. It also holds interests in new format retail centres containing 13.7 million square feet in the United States through various joint venture arrangements.