Cominar REIT: Sustained Financial Performance and Expansion for Q1 2011

Cominar Real Estate Investment Trust (REIT) announces a sustained performance for its first quarter ended March 31, 2011. "The year is off to a good start as we achieved results in line with our track record of growth and closed three quality acquisitions in the Atlantic Provinces and Montréal representing an investment of approximately $80 million. We also maintained our distributions at $0.36 per unit. Our healthy and solid financial position enables us to pursue our business strategy," indicated Michel Dallaire, President and Chief Executive Officer of Cominar.

For the first quarter of 2011, operating revenues totaled $79.7 million, up 14.5%. This increase is due mainly to the contribution of the property acquisitions completed in 2010 and 2011.

Net operating income grew to $43.2 million, up 14.5% over the first quarter of 2010. The overall portfolio NOI margin stood at 54.2%, the same level as in the first quarter of 2010, whereas the same property NOI margin stood at 53.3%, compared with 54.2% for the same period of 2010.

Net income amounted to $25.6 million, up 16.0% over the first quarter of 2010. Net income per fully diluted unit was at $0.41, a 2.5% increase compared to the same period of 2010.

Distributable income improved to $22.0 million, up 11.4% over the first quarter of 2010. Recurring distributable income per fully diluted unit amounted to $0.35, compared with $0.36 for the corresponding quarter of 2010, a decrease of 2.8%.

Recurring funds from operations totaled $25.8 million, an increase of 14.0% that reflects the contribution of the acquisitions and developments completed over the past year. Recurring adjusting funds from operations per fully diluted unit amounted to $0.34, compared with $0.35 for the first quarter of 2010, a decrease of 2.9%. This decline in the per-unit figure mainly reflects the dilutive effect of the unit offerings closed in 2010.

In the first quarter of 2011, Cominar paid distributions of $22.8 million to unitholders, compared with $19.8 million for the corresponding quarter of 2010, an increase of 15.0%. Distributions per unit amounted to $0.36, remaining stable compared with the first quarter of 2010.

Financial Position
As at March 31, 2011, Cominar's overall debt ratio was 53.9%, well below the maximum of 65.0% allowed by its Contract of Trust when convertible debentures are outstanding. Furthermore, the annualized interest coverage ratio was 2.90:1 as at March 31, 2011, which compares favourably with that of its peers.

Property Occupancy Rate
As at March 31, 2011, the overall occupancy rate of Cominar's income-producing properties stood at 93.9%, a most appreciable level, up over the first quarter of last year when the occupancy rate was 92.7% at the end of a challenging economic period. The leasing teams are pursuing their intensive efforts, especially in the industrial and mixed-use sector in the Montréal region where occupancy rates are turning around. Thus, during the first quarter, Cominar already renewed 44.6% of all leases expiring in 2011. In addition, new leases were signed for an area of 0.8 million square feet.

Acquisitions Completed in the First Quarter of 2011
On March 1, 2011, Cominar further expanded its portfolio by acquiring three quality office properties representing a $79.2 million investment and an 8.6% weighted average capitalization rate. One of these properties covers a leasable area of 372,000 square feet in Montréal and is well located near major thoroughfares and subway stations. This property is 99% leased. The other two acquisitions were in the Atlantic Provinces, specifically in Halifax, Nova Scotia and Moncton, New Brunswick.  These two recently-built office properties with a weighted average occupancy rate of 92.4% represent a total leasable area of 143,000 square feet.

Subsequent Event: Acquisition of Two Properties in Moncton, N. B.
On April 29, 2011, the REIT acquired an office property covering a leasable area of 15,000 square feet and a 27,000-square-foot retail property, both located in Moncton, New Brunswick. These fully occupied properties were acquired at a cost of $5.2 million, of which $1.5 million by the assumption of a mortgage payable and $3.7 million paid cash. The capitalization rate of this transaction is 8.8%.

Distribution Reinvestment Plan
Cominar has a dividend reinvestment plan for its unitholders that allows participants to reinvest their monthly distributions in additional Trust units. Participants receive an effective discount of 5% of distributions in the form of additional units. Information and enrolment forms are available at www.cominar.com.

Additional Financial Information
Cominar's interim consolidated financial statements, prepared for the first time in accordance with International Financial Reporting Standards (IFRS), and the interim management's discussion and analysis for the first quarter ended March 31, 2011 will be filed on SEDAR at www.sedar.com 
and are available on Cominar's website at www.cominar.com. 

on May 12, 2011