Net Income of
Company FFO of
Quarterly Distribution Raised by 5% to
All dollar references are in
“2018 was a transformational year for BPY as we grew our earnings, continued our capital recycling initiatives, completed the acquisition of GGP and launched BPR, our new
Financial Results
| Three months ended Dec. 31, |
Twelve months ended Dec. 31, |
|||||||
| (US$ Millions, except per unit amounts) | 2018 | 2017 | 2018 | 2017 | ||||
| Net income(1) | $ | 858 | $ | 958 | $ | 3,654 | $ | 2,468 |
| Company FFO(2) | $ | 416 | $ | 286 | $ | 1,179 | $ | 1,017 |
| Realized gains on LP Investments(3) | $ | 417 | $ | 422 | $ | 490 | $ | 477 |
| Net income per LP unit(4) | $ | 0.51 | $ | 0.17 | $ | 2.28 | $ | 0.48 |
| Company FFO per unit(5) | $ | 0.43 | $ | 0.41 | $ | 1.48 | $ | 1.44 |
| Company FFO and realized gains per unit(5) | $ | 0.86 | $ | 1.01 | $ | 2.09 | $ | 2.12 |
- Consolidated basis – includes amounts attributable to non-controlling interests.
- See "Basis of Presentation" and “Reconciliation of Non-IFRS Measures” in this press release for the definition and components.
- “LP Investments” refer to BPY’s investments in
Brookfield -sponsored private real estate funds. - 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
$25.70 without an add-back to earnings of the associated carry on the preferred shares. - Company FFO per unit and realized gains per unit are calculated based on 974.1 million (2017 – 703.5 million) and 796.8 million (2017 – 704.7 million) units outstanding for the three and twelve months ended December 31, 2018, respectively. See reconciliation of basic net income in the "Reconciliation of Non-IFRS Measures" section in this press release.
Net income for the quarter ended December 31, 2018 was
Company FFO was
Operating Highlights
Our core office operations generated Company FFO of
Occupancy in our core office portfolio increased 60 basis points during the fourth quarter to 93.5% on 3.3 million square feet of total leasing. Leases signed in the fourth quarter were at average rents 8% higher than leases that expired in the period. Total leasing for the year was 7.8 million square feet and occupancy increased 90 basis points during the year.
Our core retail operations generated Company FFO of
Core same-property retail occupancy finished the year at 96.5% on 9.6 million square feet of total leasing, with average initial suite-to-suite rent spreads of 11% on an NOI-weighted basis. NOI-weighted tenant sales per square foot increased 6% in 2018 to
Our LP investments generated Company FFO of
| Three months ended Dec. 31, | Twelve months ended Dec. 31, | |||||||||||
| (US$ Millions) | 2018 | 2017 | 2018 | 2017 | ||||||||
| Company FFO by segment | ||||||||||||
| Core Office | $ | 170 | $ | 148 | $ | 608 | $ | 532 | ||||
| Core Office gain | - | - | - | 60 | ||||||||
| Core Retail | 270 | 158 | 651 | 515 | ||||||||
| LP Investments | 77 | 89 | 330 | 335 | ||||||||
| Corporate | (101 | ) | (109 | ) | (410 | ) | (425 | ) | ||||
| Company FFO(1) | $ | 416 | $ | 286 | $ | 1,179 | $ | 1,017 | ||||
(1) See "Basis of Presentation" and "Reconciliation of Non-IFRS Measures" below in this press release for the definitions and components.
Strategic Initiatives
Dispositions
In total for 2018, we participated in approximately
LP Investments
- Sold
U.S. logistics property business, IDI Logistics, for$3.5 billion , generating net proceeds of$482 million to BPY. - Sold 21 multifamily properties in the
U.S. for an aggregate of$1.2 billion , generating net proceeds of$207 million to BPY. - Sold the Pullman Melbourne Hotel for
A$156 million , generating net proceeds of$34 million to BPY. - Sold the Highline Dallas hotel for
$68 million , generating net proceeds of$5 million to BPY.
Core Assets
- Sold the office buildings at 10 & 12 Shelley St. in
Sydney forA$804 million , generating net proceeds of$311 million to BPY. - Sold a 48% interest in a portfolio of five high-quality assets in
Sydney and Perth. Net proceeds to BPY were$150 million . - Sold 49% of Fashion Place mall in
Murray, UT for$594 million , generating net proceeds of$160 million to BPY. - Sold a 49% interest in 2001 M. Street in
Washington, DC for$250 million , generating net proceeds of$38 million to BPY. - Sold 1550 Wilson Blvd. and 1560 Wilson Blvd. in
Arlington, VA for$103 million , generating net proceeds of$38 million to BPY.
New Investments
The following new LP investments were made during the fourth quarter:
- Completed the acquisition of Forest City Realty Trust Inc. for approximately
$6.9 billion ($486 million at BPY’s share). - Acquired a 90% interest in a student housing and aparthotel operator and developer in
France for €298 million ($330 million ) ($22 million at BPY’s share). - Acquired the PGA National Hotel and Resort in
Palm Beach, FL for$221 million ($15 million at BPY’s share). - Acquired 10 triple net lease properties for an aggregate of
$118 million ($34 million at BPY’s share). - Acquired three extended-stay hotels in
Tampa, FL for$42 million ($11 million at BPY’s share). - Acquired an aparthotel development in
Lisbon, Portugal for €39 million ($45 million ) ($3 million at BPY’s share).
BSREP III
Brookfield Asset Management Inc. (“BAM”) recently closed its successor opportunistic property fund (“the Fund”) with total capital of
Balance Sheet Update
During the quarter, we executed on the following transactions to increase our balance sheet flexibility, increase liquidity and extend the maturity of our debt:
- Refinanced Potsdamer Platz for €1.1 billion.
- Refinanced the Wells Fargo Center South Tower in
Los Angeles for$253 million . - Refinanced five core retail assets for an aggregate of
$552 million .
Unit Repurchase Program
Utilizing BPY’s in-place NCIB, the Partnership purchased 3,927,910 of its Limited Partnership units in the fourth quarter of 2018 at an average price of
Distribution Increase and Declaration
The Board of Directors approved an increase in the Partnership’s quarterly distribution from
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