Brookfield PropertyPartners LP reported higher company FFO year over year for the firstquarter. It attributed the increase to higher NOI from recently signed office leases,strong performance in its core retail business and investments made in 2015.
The company said it also benefited from lower interest costsas a result of the repayment of the debt taken on to acquire 100% of BrookfieldOffice Properties.
Company FFO totaled $217 million, or 31 cents per unit, comparedto $181 million, or 25 cents per unit, a year earlier.
The S&P Capital IQ consensus estimate was 32 cents.
Property sales in the first quarter included Royal Centre inVancouver, British Columbia, at the end of February for net proceeds of C$285 million,or C$236 million at the company's share. It also sold its 50% interest in WorldSquare Shopping Centre in Sydney in February for net proceeds of A$278 million.
Brookfield Property sold full or partial interests in four coreretail assets in January for net proceeds of about $250 million, or $73 millionat the company's share, and it sold Hotel 1000 in Seattle at the end of Januaryfor net proceeds of $83.5 million, or $23 million at Brookfield Property's share.
Following the end of the quarter, it closed or is in the processof closing sales of a 49% noncontrolling interest in One New York Plaza in New YorkCity, a 25% interest in Potsdamer Platz in Berlin and a 50% interest in the officedevelopment at Principal Place in London. The total sales will net proceeds of over$1 billion.
Brookfield Property said it used the proceeds to repay debt,invest in its active pipeline and fund new acquisitions.
In its core office business, the company acquired a 51% interestin 15 Broad St. in Boston for $33 million, or $8 million of equity at the company'sshare. After quarter-end, it acquired a 10% interest in Aldgate Tower in Londonfor £35 million, or £15 million of equity at Brookfield's share. It also acquiredland parcels zoned for urban multifamily development in Houston and Los Angelesfor $50 million and, subsequent to quarter-end, 50% of an office development projectin Washington, D.C., for $72.5 million.
In its core retail business, it acquired the remaining 25% interestin Spokane Valley Mall for $37.5 million, or $10.8 million at Brookfield Property'sshare.
In its opportunistic investing strategy, the company added aself-storage operating platform and 108 self-storage assets in the U.S., for approximately$1 billion, or $108 million of equity at Brookfield Property's share.
Subsequent to quarter-end, it acquired Vintage Estates in NapaValley, Calif., comprising two hotels with 192 keys and 30,000 square feet of streetretail, for $197 million, or $20 million of equity at the company's share.
The company boughta student housing business in the U.K. that owns a portfolio of 13 high-qualityassets totaling 5,681 units for approximately £399 million, or £37 million of equityat the company's share, subsequent to quarter-end.
It also agreedto acquire the remaining 67% interest in RouseProperties Inc. that it did not already own. Shareholders are set tovote on the deal June 23.
Brookfield Property also said it executed a new $2.45 billionrevolving credit facility with a consortium of 15 banks in the quarter. The facilityis floating rate at LIBOR plus 1.70% for a three-year term.
At the asset level, it refinanced One New York Plaza with a $750million loan from a consortium of banks, repaying the existing $340 million facilityat closing. The new loan has a fixed rate of 3.05% for a five-year term. It alsorefinanced 225 Liberty St. with a $900 million loan from a consortium of banks,repaying the existing $800 million facility at closing. The new loan has a fixedrate at 4.66% for a 10-year term.