Net Income of
Company FFO of
Quarterly Distribution Raised by 7% to
All dollar references are in
“Today we announced strong financial results for the fourth quarter and full-year 2017 and have now increased Company FFO per unit by 9% annually since the launch of BPY,” said Brian Kingston, chief executive officer. “Consistent with the goals we set out for ourselves at the start of the year, we raised over
Financial Results
| Three months ended December 31, |
Year ended December 31, |
||||||||
| (US$ Millions, except per unit amounts) | 2017 | 2016 | 2017 | 2016 | |||||
| Net income(1) | $958 | $92 | $2,468 | $2,717 | |||||
| Company FFO(2) | $286 | $268 | $1,017 | $967 | |||||
| Net income per LP unit(3) | $0.17 | $(0.08) | $0.48 | $2.30 | |||||
| Company FFO per unit(4) | $0.41 | $0.38 | $1.44 | $1.36 | |||||
(1) Consolidated basis – includes amounts attributable to non-controlling interests.
(2) See "Basis of Presentation" and “Reconciliation of Non-IFRS Measures” in this press release for the definition and components.
(3) Represents basic net income attributable to holders of LP units. IFRS requires the inclusion of preferred shares that are mandatorily convertible into LP units at a price of
(4) Company FFO per unit is calculated based on 703.5 million units and 704.7 million units outstanding for the three and twelve months ended December 31, 2017 (2016 – 710.0 million and 710.8 million), respectively. See reconciliation of basic net income in the "Reconciliation of Non-IFRS Measures" section in this press release.
Net income for the quarter ended December 31, 2017 was
Company FFO was
Operating Highlights
Our core office operations generated Company FFO of
Occupancy in our core office portfolio increased 80 basis points during the fourth quarter, finishing the year at 92.6% on 2.9 million square feet of total leasing, bringing total 2017 leasing activity to 9.7 million square feet. Leases signed in the fourth quarter were at average rents 33% higher than leases that expired in the period.
Our core retail operations generated Company FFO of
Core same-property retail occupancy finished the year at 96.2%, with average suite-to-suite rent spreads of 18.2% for leases commencing in 2017 and 2018. Tenant sales (excluding anchors) remained flat at
Our opportunistic investments generated Company FFO of
| Three months ended December 31, | Year ended December 31, | |||||||||||
| (US$ Millions) | 2017 | 2016 | 2017 | 2016 | ||||||||
| Company FFO by segment | ||||||||||||
| Core Office | $148 | $182 | $592 | $630 | ||||||||
| Core Retail | 158 | 132 | 515 | 459 | ||||||||
| Opportunistic | 99 | 68 | 377 | 341 | ||||||||
| Corporate | (119) | (114) | (467) | (463) | ||||||||
| Company FFO(1) | $286 | $268 | $1,017 | $967 | ||||||||
(1) See "Basis of Presentation" and "Reconciliation of Non-IFRS Measures" below in this press release for the definitions and components.
Strategic Initiatives
Dispositions
During the fourth quarter, we successfully advanced a number of our capital recycling initiatives:
- Sold 49% of One Liberty Plaza for
$742 million , generating net proceeds of$328 million . - Sold two office buildings in
Washington D.C. for$186 million ($96 million at BPY’s share). - Sold six multifamily properties in the
U.S. for$277 million ($77 million at BPY’s share). - Sold 13 industrial properties and 3,500 acres of
U.S. industrial land for$212 million ($38 million at BPY’s share).
New Investments
The proceeds raised from asset sales were used to invest in our active development pipeline and to fund new acquisitions, including:
- A 4.2 million-square-foot office portfolio in the Powai district of
Mumbai, India for approximately$900 million ($290 million at BPY’s share). - Houston Center, a 4.2 million-square-foot office and retail complex in
Houston, TX for$825 million ($211 million at BPY’s share). - Two office properties totaling 400,000 square feet in
San Jose, CA for$128 million ($32 million at BPY’s share). - A student housing asset in
Aberdeen, UK for £51 million (£13 million at BPY’s share). - Majority ownership (88%) in a multifamily property in
Orlando, FL powered by Niido – an Airbnb-friendly apartment concept – for$58 million . We expect to invest up to$200 million in other Niido properties in the future. - Following quarter-end, a portfolio of 105 extended-stay hotels in the
U.S. for$769 million ($197 million at BPY’s share). - Following quarter-end, the Renaissance Dupont Circle hotel in
Washington, DC for$110 million ($28 million at BPY’s share).
Update on Proposed GGP Acquisition
On November 13, 2017, BPY made a non-binding proposal to acquire all of the outstanding shares of GGP not owned by BPY for consideration of
Balance Sheet Update
To increase our balance sheet flexibility by increasing liquidity and extending the maturity of our debt, we executed on the following financing initiatives during the quarter:
- Entered into a syndicated facility for
A$1.1 billion to fund the remaining construction costs of the Wynyard Place development inSydney . - In our industrial portfolio, refinanced
$284 million on existing assets and initiated five new development construction loans for a total of$119 million . - Refinanced approximately
$237 million of debt associated with core office properties inNew York ,Washington, D.C. andToronto . - Issued ten million cumulative minimum rate reset Class AAA preference shares, Series II for
C$25.00 per share from our office subsidiary for aggregate proceeds ofC$250 million . The preference shares will yield 4.85% for the initial five-year, fixed-rate period.
Unit Repurchase Program
No Limited Partnership Units were acquired during the quarter under the in-place Normal Course Issuer Bid. For the full year, BPY repurchased 5,913,672 LP units at an average price of
Distribution Increase and Declaration
The Board of Directors approved an increase in the Partnership’s quarterly distribution from
The quarterly distributions are declared in
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 SEC at www.sec.gov and on the Partnership’s SEDAR profile at www.sedar.com.
The Partnership’s quarterly Letter to Unitholders and Supplemental Information Package can be accessed before the market open on February 8, 2018 at http://bpy.brookfield.com. This additional information should be read in conjunction with this press release.
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 (“Company FFO”) and net income attributable to unitholders.
Company FFO and net income attributable to unitholders are also presented on a per unit basis. NOI, same-property NOI, FFO, Company FFO 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 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 supplementa
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