Strong performance bolstered by high-quality portfolio and solid financial condition NEW GLASGOW, NS, Aug. 7, 2024 /CNW/ - Crombie Real Estate Investment Trust ("Crombie") (TSX:CRR) today announced results for its second quarter ended June 30, 2024. Management will host a conference call to discuss the results at 12:00 p.m. (EDT), August 8, 2024. "Crombie delivered strong operational and financial performance this quarter, including an increase of 3.4% in same-asset property cash NOI, healthy renewal spreads of 9.6%, and normalized FFO per unit growth of 6.7%," said Mark Holly, President and CEO. "Our strategic focus remains on value creation, our solid financial position, and prudent approach to capital allocation, while advancing key initiatives. In the second quarter, we received a positive trend change to our credit rating, engaged in acquisition and disposition activity, and invested in our development program, unlocking embedded value and growth throughout our grocery-anchored portfolio." SECOND QUARTER SUMMARY(In thousands of Canadian dollars, except per Unit amounts and square feet and as otherwise noted) Operational Highlights Committed occupancy of 96.4% and economic occupancy of 95.9%; consistent with the second quarter of 2023 Renewals of 293,000 square feet at rents 9.6% above expiring rental rates An increase of 11.8% using the weighted average rent during the renewal term Acquisition of one grocery-anchored retail property added 48,000 square feet of gross leasable area at a total aggregate purchase price of $9,880 excluding transaction and closing costs Disposition of one 15,000 square foot retail property, located in a VECTOM market, for gross proceeds of $13,000 Invested $24,937 in non-major development modernization program Published annual ESG Report highlighting priorities, initiatives, and accomplishments Financial Highlights Morningstar DBRS trend change to BBB (low) positive, previously BBB (low) stable Three months ended June 30, 2024 2023      Variance % Property revenue (1) $            116,361 $            112,865 $                3,496 3.1 % Revenue from management and development services $                2,106 $                2,046 $                    60 2.9 % Operating income attributable to Unitholders $              29,347 $              19,557 $                9,790 50.1 % FFO (2) per Unit - basic $                  0.32 $                  0.26 $                  0.06 23.1 % AFFO (2) per Unit - basic $                  0.28 $                  0.22 $                  0.06 27.3 % Same-asset property cash NOI (2) $              78,303 $              75,693 $                2,610 3.4 % Available Liquidity $            706,717 $            614,072 $              92,645 15.1 % Debt to gross fair value (2)(3) 42.6 % 42.3 % 0.3 % Debt to trailing 12 months adjusted EBITDA (2)(3) 7.68x 8.17x -0.49x (6.0) % (1) Property revenue for the three months ended June 30, 2023 has been increased by $4,898 as a result of a change in the presentation of recoverable property taxes for certain properties where a tenant pays the property taxes on Crombie's behalf. (2) Non-GAAP financial measures used by management to evaluate Crombie's business performance. See "Cautionary Statements and Non-GAAP Measures" below for a reconciliation of FFO, AFFO,  same-asset property cash NOI, debt to gross fair value, and debt to trailing 12 months adjusted EBITDA. (3) At Crombie's proportionate share including joint ventures. Information in this press release is a select summary of results. This press release should be read in conjunction with Crombie's Management's Discussion and Analysis for the quarter ended June 30, 2024 and Consolidated Financial Statements and Notes for the quarters ended June 30, 2024, and June 30, 2023. Full details on our results can be found at www.crombie.ca and www.sedarplus.ca. Operational Metrics June 30, 2024 June 30, 2023 Number of investment properties (1) 295 293 Gross leasable area (2) 18,750,000 18,625,000 Economic occupancy (3) 95.9 % 95.9 % Committed occupancy (4) 96.4 % 96.4 % Total properties inclusive of joint ventures (5) 304 305 Gross leasable area inclusive of joint ventures 19,280,000 19,155,000 (1) This includes properties owned at full and partial interests, excluding joint ventures. (2) Gross leasable area is adjusted to reflect Crombie's proportionate interest in partially owned properties, excluding joint ventures. (3) Represents space currently under lease contract and rent has commenced. (4) Represents current economic occupancy plus completed lease contracts for future occupancy of currently available space. (5) Inclusive of properties under development  properties. Committed occupancy of 96.4% included 89,000 square feet of space committed in the quarter. VECTOM and Major Markets represent 51,000  square feet of committed space, including 31,000 square feet for a retail tenant in Major Markets. New leases increased occupancy by 122,000 square feet at June 30, 2024, at an average first year rate of $25.61 per square foot. Renewal activity for the second quarter of 2024 consisted of 293,000 square feet with an increase of 9.6% over expiring rental rates. The primary driver of renewal growth in the quarter was 291,000 square feet of retail renewals with an increase of 9.6% over expiring rental rates. When comparing the expiring rental rates to the weighted average rental rate for the renewal term, Crombie achieved an increase of 11.8% for the three months ended June 30, 2024. Financial Metrics Three months ended June 30, Six months ended June 30, 2024 2023 Variance % 2024 2023 Variance % Net property income (1) $    74,888 $    71,442 $      3,446 4.8 % $   148,529 $   140,090 $         8,439 6.0 % Operating income attributable to Unitholders $    29,347 $    19,557 $      9,790 50.1 % $     55,552 $     44,730 $       10,822 24.2 % Same-asset property cash NOI (1) $    78,303 $    75,693 $      2,610 3.4 % $   154,835 $   149,834 $         5,001 3.3 % Funds from operations ("FFO") (1) Basic $    57,880 $    46,068 $    11,812 25.6 % $   112,748 $     98,903 $       13,845 14.0 % Per Unit - Basic $        0.32 $        0.26 $        0.06 23.1 % $        0.62 $         0.55 $           0.07 12.7 % Payout ratio (1) 70.1 % 86.7 % (16.6) % 71.8 % 80.6 % (8.8) % Adjusted funds from operations ("AFFO") (1) Basic $    50,317 $    39,118 $    11,199 28.6 % $     97,264 $     85,027 $       12,237 14.4 % Per Unit - Basic $        0.28 $        0.22 $        0.06 27.3 % $         0.53 $         0.48 $           0.05 10.4 % Payout ratio (1) 80.6 % 102.1 % (21.5) % 83.2 % 93.7 % (10.5) % (1) Net property income, same-asset property cash NOI, FFO, FFO payout ratio, AFFO, and AFFO payout ratio are non-GAAP financial measures used by management to evaluate Crombie's business performance. See "Cautionary Statements and Non-GAAP Measures" below for a reconciliation of net property income, same-asset property cash NOI, FFO, FFO payout ratio, AFFO, and AFFO payout ratio. Second Quarter and Year-to-Date 2024 Results Operating income attributable to Unitholders The increase in operating income in the second quarter resulted mainly from decreased general and administrative expenses due to lower employee transition costs compared to the same quarter in 2023. Gain on disposal of investment properties, growth in property revenue from renewals, contractual rent step-ups, new leasing activity, and recently completed developments, as well as increased income from leasing activity in equity-accounted joint ventures further increased operating income. This was offset in part by higher interest expense, impairment of an investment property, and an increase in amortization of tenant incentives. The year-to-date increase was driven by the factors discussed above with the exception of income from equity-accounted joint ventures. The increase was partially offset year to date by lower income from equity-accounted investments related to the sale of land within a joint venture in 2023, and increased depreciation and amortization, in addition to the offsetting factors noted for the quarter. Same-asset property cash NOI The increase in same-asset property cash NOI for both the quarter and year to date was primarily driven by increased property revenue from renewals, contractual rent step-ups, and new leasing. FFO The increase in total FFO was driven primarily by decreased general and administrative expenses due to lower employee transition costs compared to the same quarter in 2023. Higher property revenue from recently completed developments, renewals, contractual rent step-ups, and new leasing activity, as well as increased income from leasing activity in equity-accounted joint ventures further contributed to FFO growth in the quarter. This was offset in part by an increase in interest expense. The year-to-date increase was driven by the factors discussed above with the exception of income from equity-accounted joint ventures. The increase was partially offset year to date by lower income from equity-accounted investments related to the sale of land within a joint venture in 2023 in addition to the higher interest expense noted for the quarter. FFO per Unit, excluding employee transition costs of $784 in the second quarter of 2024, was $0.32 for the quarter and $0.62 year to date, an increase of 6.7% and 5.1%, respectively, over 2023 ($0.30 for the quarter and $0.59 year to date, excluding employee transition costs of $7,172 in the second quarter of 2023). AFFO Total AFFO increased in the quarter primarily due to decreased general and administrative expenses due to lower employee transition costs compared to the same quarter in 2023, higher property revenue from recently completed developments, renewals, contractual rent step-ups, and new leasing activity, as well as increased income from leasing activity in equity-accounted joint ventures. This was offset in part by an increase in interest expense. On a year-to-date basis, the growth in total AFFO resulted from the factors discussed above with the exception of income from equity-accounted joint ventures. The increase was partially offset year to date by lower income from equity-accounted investments related to the sale of land within a joint venture in 2023 in addition to the higher interest expense noted for the quarter. AFFO per Unit, excluding employee transition costs of $784 in the second quarter of 2024, was $0.28 for the quarter and $0.54 year to date, an increase of 7.7% and 3.8%, respectively, over 2023 ($0.26 for the quarter and $0.52 year to date, excluding employee transition costs of $7,172 in the second quarter of 2023). Financial Condition Metrics June 30, 2024 December 31, 2023 June 30, 2023 Unencumbered investment properties (1) $                2,687,000 $                2,608,000 $                2,488,000 Available liquidity (2) $                   706,717 $                   583,770 $                   614,072 Debt to gross book value - cost basis (3) 45.1 % 45.2 % 45.2 % Debt to gross fair value (4)(5)