Fredericton-Based Retail Property Owner, Developer Recovering From 2020 Downturn
FREDERICTON – Plaza Retail REIT‘s quarterly earnings report showed continued recovery from the pandemic across the company, while year-end numbers highlighted 2020’s overall financial hit.
The Fredericton-based publicly-traded company (TSX: PLZ.UN) says 96 percent of the businesses in its portfolio of buildings are now open, though many of their restaurants offer takeout or delivery only, with some non-essential retail tenants offering curbside pickup only.
“Our outlook is very positive, as we’ve experienced a solid improvement in our business,” said Michael Zakuta, President and CEO of Plaza in a conference call last Friday. “Our tenant base of essential needs and value retailers operating in open-air centers located in primary and strong secondary markets across a wide geography has allowed us to successfully weather this pandemic.”
On Tuesday, the stock was trading at more than $3.80 per share with a market cap of nearly $390-million. The share price was more than $1 lower near the beginning of the pandemic.
Over the quarter, Plaza announced they collected 98.9 percent of rents, compared to the second quarter of 2020 where 84.1 percent of rents were collected.
Plaza’s profile is made up of grocery stores, pet retailers, fast food, and value retailers. Since they attract many essential businesses and 60 percent of their portfolio is in the Atlantic region, where containing the pandemic has been effective compared to other parts of the country, they have been able to recover relatively quickly from the impacts of the Covid-19 pandemic.
Across 2020, the company reported a $14.9-million loss in profit and total comprehensive income, following a gain of $51.3-million in 2019, marking a year-to-year decrease of $66.3- million.
The company’s property rental revenue ended at $106.9-million, a $5.6-million loss compared to 2019. The net operating income decreased by $4-million compared to 2019 to $68.6 million in 2020.
The company says this loss is due to lease buyouts, rent abatements, impacts from Canada Emergency Commercial Rent Assistance (CECRA), and an increase in bad debt expense in the current year. They say this was offset by lower operating expenses and growth in their net operating income from developments, acquisitions, and new leasing in same-asset properties.
Plaza is a retail property owner and developer with a focus on Ontario, Quebec, and Atlantic Canada. Their portfolio mostly consists of stand-alone small box retail outlets and open-air centres, mostly filled by national tenants.
In the fourth quarter of 2020, their top retail tenants included Shoppers Drug Mart and Loblaws (24.7 percent); Dollarama (5.4 percent); KFC (4.8 percent); Canadian Tire, Mark’s, and SportChek (3.7 percent); and Winners, Marshalls, and Homesense (3.7 percent).
In Atlantic Canada, the quarter also saw the construction start of an Atlantic Superstore in Bedford and a Pet Valu in Liverpool. It also saw the openings of BarBurrito in Tacoma Plaza located in Dartmouth; Mr. Lube in Fairville Boulevard Plaza located in Saint John; Dollarama in Champlain Street Plaza located in Dieppe; and TD Bank in Northwest Centre located in Moncton.
Liam Floyd is a reporter for Huddle. Send him story suggestions: [email protected].
