All dollar references are in
In the second quarter, we achieved earnings growth of 6% and were active in monetizing mature, de-risked assets,said Brian Kingston, Chief Executive Officer. We have continued to allocate additional capital to unit repurchases this year, acquiring over
Financial Results
| Three months ended June 30, | Six months ended June 30, | |||||||
| (US$ Millions, except per unit amounts) | 2019 | 2018 | 2019 | 2018 | ||||
| Net income(1) | $ | 23 | $ | 1,051 | $ | 736 | $ | 2,074 |
| Company FFO and realized gains(2) | $ | 362 | $ | 250 | $ | 729 | $ | 519 |
| Net income per LP unit(3)(4) | $ | 0.12 | $ | 0.69 | $ | 0.44 | $ | 1.38 |
| Company FFO and realized gains per unit(4)(5) | $ | 0.38 | $ | 0.36 | $ | 0.76 | $ | 0.74 |
| (1) | Consolidated basis includes amounts attributable to non-controlling interests. |
| (2) | Excluding realized gains, Company FFO was |
| (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) | Net income attributable to holders of LP units and Company FFO and realized gains per unit are reduced by preferred dividends of |
| (5) | Company FFO and realized gains per unit are calculated based on 952.1 million (2018 703.1 million) and 961.4 million (2018 703.3 million) units outstanding for the three and six months ended June 30, 2019. Excluding realized gains, Company FFO per unit was |
Company FFO and realized gains was
Net income for the quarter ended June 30, 2019 was
Operating Highlights
Our Core Office operations generated Company FFO of
Occupancy in our Core Office portfolio finished the second quarter at 92.4% on 1.2 million square feet of total leasing, representing decreases in occupancy of 30 basis points year-over-year and 90 basis points sequentially driven primarily by expiries in
Our Core Retail operations generated Company FFO of
1) Same-store NOI including impact of bankruptcies were -1.4% for the quarter and 0.1% on a year-to-date basis.
Our Core Retail business leased over 9.8 million square feet over the past 12 months with suite-to-suite rent spreads growing at 7.2%2. At quarter-end, the portfolio was 95.0% leased and we expect it to increase through the remainder of the year to 96%. In-place rents increased 2.2% throughout the portfolio, with NOI-weighted sales growing 5.2% to
2) Excluding certain short-term renewals at Ala Moana Center. This metric is weighted by NOI.
Our LP Investments generated Company FFO and realized gains of
| Three months ended June 30, | Six months ended June 30, | ||||||||||||
| (US$ Millions) | 2019 | 2018 | 2019 | 2018 | |||||||||
| Company FFO and realized gains: | |||||||||||||
| Core Office | $ | 187 | $ | 149 | $ | 327 | $ | 302 | |||||
| Core Retail | 170 | 119 | 354 | 235 | |||||||||
| LP Investments | 106 | 87 | 252 | 184 | |||||||||
| Corporate | (101 | ) | (105 | ) | (204 | ) | (202 | ) | |||||
| Company FFO and realized gains(1) | $ | 362 | $ | 250 | $ | 729 | $ | 519 | |||||
(1) See "Basis of Presentation" and "Reconciliation of Non-IFRS Measures" below in this press release for the definitions and components.
Dispositions
In the second quarter of 2019 we completed
- Our 43% interest in 2001 M Street in
Washington, D.C. for net proceeds of$45 million . - Our 50% interest in the office building at 240 Queen Street in
Brisbane for net proceeds of$36 million . - Our interest in the
Marina Village office park inAlameda, CA for net proceeds of$27 million .
In addition, subsequent to quarter-end we entered into contracts to sell:
- Our remaining 26% interest in 75 State Street in
Boston for net proceeds of$79 million . - Our 30% stake in the Darling Park Complex in
Sydney for net proceeds ofA$432 million . - The majority of assets in our
Manhattan multifamily portfolio for net proceeds of$135 million . - A portion of our triple net lease automotive dealership assets (CARS) for net proceeds of
$24 million .
Balance Sheet Update
To increase liquidity and extend the maturity of our debt, during and subsequent to the second quarter we executed the following financing transactions:
- In Core Office, we raised an aggregate of
$1.1 billion in fixed-rate mortgages with an average term of nine years at an average interest rate of 4.28%, as well as an aggregate of$1.2 billion in floating-rate mortgages with an average term of five years. - In Core Retail, we raised an aggregate of
$1.4 billion in fixed-rate mortgages with an average term of ten years at an average interest rate of 4.32%, as well as an aggregate of$515 million in floating-rate mortgages with an average term of five years.
Unit Repurchase Program
Utilizing in-place normal course issuer bids (NCIBs), we purchased 2,880,614 of BPY units and BPR shares in the second quarter of 2019 at an average price of
Subsequent to quarter-end, we purchased 396,712 additional BPY units and BPR shares at an average price of
Distribution Declaration
The Board of Directors has declared a quarterly distribution on the partnerships LP units of
The quarterly distributions on the LP units are declared in
The Board of Directors has also declared a quarterly distribution on the partnerships preferred units of
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 Partnerships SEDAR profile at www.sedar.com.
The Partnerships quarterly letter to unitholders and supplemental information package can be accessed before the market open on August 2, 2019 at 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 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 dir
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