While we continue to experience challenges in certain of our operations and markets due to the ongoing consequences of the pandemic and global economic slowdown, we remain encouraged by a recovery in activity in select sectors within our business, said
Financial Results
Net income for the quarter ended
Company FFO (CFFO) was
| Three months ended |
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| (US$ Millions, except per unit amounts) | 2021 | 2020 | |||||
| Net income (loss)(1) | $731 | $(373 | ) | ||||
| Company FFO and realized gains(2) | $311 | $323 | |||||
| Company FFO(2) | $125 | $309 | |||||
| Net income (loss) per LP unit(3)(4) | $0.25 | $(0.49 | ) | ||||
| Company FFO and realized gains per unit(4)(5) | $0.32 | $0.33 | |||||
| (1) Consolidated basis includes amounts attributable to non-controlling interests. | |||||||
| (2) See "Basis of Presentation" and Reconciliation of Non-IFRS Measures in this press release for the definition and components. | |||||||
| (3) Represents basic net income attributable to holders of LP units. IFRS requires the inclusion of preferred shares that are mandatorily convertible into LP units at a price of |
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| (4) Net income attributable to holders of LP units and Company FFO and realized gains per unit are reduced by preferred dividends of |
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| (5) Company FFO and realized gains per unit are calculated based on 935.7 million (2020 943.5 million) units outstanding for the three months ended |
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Operating Highlights
Our Core Office business generated CFFO of
Core Office leasing activity in the first quarter totaled 894,000 square feet, which were completed at rents significantly higher than expiring leases in the period. Occupancy in the portfolio decreased 120 basis points to 88.8%, with a remaining weighted average lease term of 8.6 years.
Our Core Retail business generated CFFO of
Our Core Retail operations leased approximately 5.9 million square feet over the past 12 months with initial rents that were consistent with expiring rents. Our properties were 91.5% leased at
Our LP Investments generated CFFO and realized gains of
| Three months ended |
||||||||
| (US$ Millions) | 2021 | 2020 | ||||||
| Company FFO and realized gains: | ||||||||
| Core Office | $140 | $135 | ||||||
| Core Retail | $108 | $195 | ||||||
| LP Investments | $188 | $76 | ||||||
| Corporate | $(125 | ) | $(83 | ) | ||||
| Company FFO and realized gains(1) | $311 | $323 | ||||||
(1) See "Basis of Presentation" and "Reconciliation of Non-IFRS Measures" below in this press release for the definitions and components.
Dispositions
In the first quarter, we completed
Dispositions completed in the first quarter include:
- Sold 50% interest in
Bay Adelaide North office tower inToronto for$581 million , generating net proceeds of$133 million to BPY. - Monetized a portion of our Indian office portfolio via a
Mumbai -listed IPO, resulting in a realized gain of$69 million to BPY. - Sold interest in retailer Forever 21, resulting in a realized gain of
$63 million to BPY. - Completed the sale of our
Northeast U.S. life sciences office portfolio at a gross sales price of$3.4 billion , generating approximately$100 million in net proceeds to BPY.
Balance Sheet Update
To increase liquidity and extend the maturity of our debt, during the first quarter we executed the following financing transactions:
- Refinanced
ICD Brookfield Place office tower inDubai for$626 million for a 7.5-year term at an interest rate of EIBOR +3.50%, generating net proceeds of$66 million to BPY. - Refinanced One and Three Allen Center in
Houston for$470 million for a 5-year term at an interest rate of LIBOR +2.97%. - Refinanced
Gas Company Tower inLos Angeles for$465 million for a 5-year term at an interest rate of LIBOR +3.07%. - Refinanced Kenwood Towne Centre in
Cincinnati, Ohio for$210 million for a 3-year term at an interest rate of LIBOR +3.40%. - Subsequent to quarter-end, extended maturity on a
$1.1 billion , 15-property Core Retail mortgage loan for an additional three-year term at an interest rate of LIBOR +3.25%.
Ended the quarter with
Privatization Agreement from Brookfield Asset Management
On
Distribution Update
Pursuant to the terms of the agreement governing the proposed transaction with BAM, holders of BPY units will not receive further quarterly distributions.
The distribution reinvestment plan (the DRIP) of BPY will be terminated effective
The Board of Directors has declared quarterly distributions on the partnerships Class A Series 1, Series 2 and Series 3 preferred units of
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1 In-place rents reflect retail tenants <10K square feet.
Additional Information
Further details regarding the operations of the Partnership are set forth in regulatory filings. A copy of the filings may be obtained through the website of the
Basis of Presentation
This press release and accompanying financial information make reference to net operating income (NOI), same-property NOI, funds from operations (FFO), Company FFO and realized gains (Company FFO and realized gains) and net income attributable to unitholders.
Company FFO and realized gains, and net income attributable to unitholders are also presented on a per unit basis. NOI, same-property NOI, FFO, Company FFO and realized gains, and net income attributable to unitholders do not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS) and therefore may not be comparable to similar measures presented by other companies. The Partnership uses NOI, same-property NOI, FFO, Company FFO and realized gains, and net income attributable to unitholders to assess its operating results. These measures should not be used as alternatives to net income and other operating measures determined in accordance with IFRS, but rather to provide supplemental insights into performance. Further, these measures do not represent liquidity measures or cash flow from operations and are not intended to be representative of the funds available for distribution to unitholders either in aggregate or on a per unit basis, where presented.
NOI is defined as revenues from commercial and hospitality operations of consolidated properties less direct commercial property and hospitality expenses. As NOI includes the revenues and expenses directly associated with owning and operating commercial property and hospitality assets, it provides a measure to evaluate the performance of the property operations.
Same-property NOI is a subset of NOI, which excludes NOI that is earned from assets acquired, disposed of or developed during the periods presented, or not of a recurring nature, and from opportunistic assets. Same-property NOI allows the Partnership to segregate the performance of leasing and operating initiatives on the portfolio from the impact to performance from investing activities and one-time items, which for the historical periods presented consist primarily of lease termination income.
FFO is defined as income, including equity accounted income, before realized gains (losses) from the sale of investment property (except gains (losses) related to properties developed for sale), fair value gains (losses) (including equity accounted fair value gains (losses)), depreciation and amortization of real estate assets, income tax expense (benefit), and less non-controlling interests of others in operating subsidiaries and properties. FFO is a widely recognized measure that is frequently used by securities analysts, investors and other interested parties in the evaluation of real estate entities, particularly those that own and operate income producing properties. The Partnerships definition of FFO includes all of the adjustments that are outlined in the
Company FFO and realized gains is defined as FFO before the impact of depreciation and amortization of non-real estate assets, transaction costs, gains (losses) associated with non-investment properties, imputed interest on equity accounted investments, realized gains in the Partnerships
Net income attributable to unitholders is defined as net income attributable to holders of general partnership units and limited partnership units of the Partnership, redeemable/exchangeable and special limited partnership units of
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