All dollar references are in
Financial Results
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| (US$ Millions, except per unit amounts) | 2017 | 2016 | 2017 | 2016 | ||||||||||
| Net income(1) | $ | 659 | $ | 1,616 | $ | 1,510 | $ | 2,625 | ||||||
| Company FFO(2) | $ | 236 | $ | 232 | $ | 731 | $ | 699 | ||||||
| Net income per LP unit(3) | $ | 0.22 | $ | 1.61 | $ | 0.31 | $ | 2.37 | ||||||
| Company FFO per unit(4) | $ | 0.34 | $ | 0.33 | $ | 1.04 | $ | 0.98 | ||||||
| (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 definitions 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 704.0 million (2016 710.9 million) and 705.1 million (2016 711.1 million) units outstanding for the three and nine months ended September 30, 2017, 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 September 30, 2017 was
Company FFO was
Operating Highlights
Our core office operations generated Company FFO of
Occupancy in our core office portfolio finished the quarter at 91.8% on 2.9 million square feet of total leasing. New leases were signed at average rents approximately 46% higher than expiring leases in the quarter.
Our core retail operations generated Company FFO of
Core same-property retail occupancy finished the third quarter at 95.4%, with average suite-to-suite rent spreads of 20% for leases commencing in the trailing 12 months. Tenant sales (excluding anchors) were up modestly on a trailing 12-month basis to
Our opportunistic segment generated Company FFO of
| Three months ended September 30, | Nine months ended September 30, | |||||||||||
| (US$ Millions) | 2017 | 2016 | 2017 | 2016 | ||||||||
| Company FFO by segment | ||||||||||||
| Core Office | $ | 126 | $ | 149 | $ | 444 | $ | 448 | ||||
| Core Retail | 128 | 108 | 357 | 327 | ||||||||
| Opportunistic | 99 | 90 | 278 | 273 | ||||||||
| Corporate | (117 | ) | (115 | ) | (348 | ) | (349 | ) | ||||
| Company FFO(1) | $ | 236 | $ | 232 | $ | 731 | $ | 699 | ||||
| (1) See "Basis of Presentation" and "Reconciliation of Non-IFRS Measures" below in this press release for the definitions and components. | ||||||||||||
Strategic Initiatives
We continue to raise equity capital through the disposition of mature, stabilized assets held both on our balance sheet as well as through our interests in
Dispositions
During and subsequent to the third quarter, we continued to advance our capital recycling initiatives via the sales of (or firm agreements to sell):
- Our European logistics business for 2.4 billion (826 million at BPYs share), generating net proceeds to BPY of
$615 million . - 20 Fenchurch Street in
London for 1.3 billion (96 million at BPYs share), generating net proceeds to BPY of$67 million . - Eleven multifamily properties in the
U.S. for$466 million ($113 million at BPYs share), generating net proceeds to BPY of$47 million . - A mixed-use property in
Toronto forC$123 million (C$65 million at BPYs share), generating net proceeds to BPY of$42 million .
New Investments
The proceeds raised from asset sales were used to invest in our active development pipeline and to fund new acquisitions, either closed or currently under contract, including:
- Interests in two fully entitled multifamily developments in the New York Tri-State area for
$412 million ($92 million at BPYs share). - The Sheraton Toronto hotel and convention center for
C$335 million (C$86 million at BPYs share). - The class AAA, 500,000-square-foot EZ Tower B office building in
Sao Paulo for$210 million ($67 million at BPYs share). - A 500-unit multifamily property in greater
Atlanta, GA for$59 million ($39 million at BPYs share). - Interests in eight Sears parcels (six acquisitions; two lease terminations) in the
U.S. for$66 million ($30 million at BPYs share). - Seven triple net lease properties in the
U.S. for$71 million ($20 million at BPYs share).
In addition, subsequent to quarter-end, we exercised all of the outstanding GGP warrants that were set to expire on November 9, 2017, resulting in the acquisition of 68 million GGP shares for approximately
Balance Sheet Update
We also executed on the following transactions to increase our balance sheet flexibility by increasing liquidity and extending the maturity of our debt:
- Refinanced One Liberty Plaza in
New York with an$850 million interest-only term loan at a fixed rate of 3.72%, resulting in net proceeds of$66 million and lowering the cost of debt on this asset by 240 basis points. - Obtained
$325 million of new, 10-year fixed rate debt at 3.98% within our core retail business. - Placed construction loans on five
U.S. industrial assets for a total of$74 million .
Unit Repurchase Program
Utilizing the in-place Normal Course Issuer Bid, the Partnership purchased 1,002,900 of its Limited Partnership units in the third quarter of 2017 at an average price of
Distribution Declaration
The Board of Directors has declared the quarterly distribution of
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 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 November 2, 2017 at http://bpy.brookfield.com. This additional information should be read in conjunction with this press release.
The Board has reviewed and approved this press release, including the summarized unaudited consolidated financial statements contained herein.
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 supplemental insights into performance.
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