Brookfield Property Partners L.P. reported FFO of $181 million for the quarter ended March 31, 2015 compared with $157 million for the same period in 2014.
The increase in FFO was driven by the acquisition of additional interests in Brookfield Office Properties Inc. (BPO) and Canary Wharf Group as well as positive same-store growth in the company’s office and retail portfolios.
The increase was partly offset by the impact of foreign exchange rates and interest expense on assets which are not yet fully contributing to income.
Net income attributable to unit-holders for the quarter ended March 31, 2015, was $833 million ($1.17 per unit) versus $372 million ($0.67 per unit) for the same period in 2014. The increase in the quarter was primarily driven by valuation increases from strong leasing results and improved market conditions in our office business.
“We recently completed the acquisition of Canary Wharf in London and opened our new retail center at Brookfield Place New York. We also commenced development of our next office tower at Manhattan West in New York,” said Ric Clark, chief executive officer of Brookfield Property Group.
During the quarter, Brookfield’s office operations contributed $770 million of valuation increases, primarily driven by strong market conditions and leasing activity in Manhattan and Sydney.
During the quarter, Brookfield leased 1.9 million square feet of space at average net rents significantly higher than expiring rents, while increasing global occupancy by 30 basis points over the previous quarter to 92.5 percent.
Significant leases executed during the first quarter include:
A 15-year lease renewal and expansion with The Capital Group Companies for 439,000 s/f at Bank of America Plaza and Wells Fargo Center South in Los Angeles; A 15-year new lease with Markit Ltd. for 135,000 s/f at Five Manhattan West in New York City.
Brookfield also started work on One Manhattan West, a 2.1-million square foot office tower in Midtown’s Hudson Yards district after Skadden Arps Slate Meagher & Flom LLP signed a letter of intent to move its New York headquarters to the skyscrape, which enabled Brookfield to close on a $1.2 billion construction loan.
Brookfield also announced a successful retail quarter through its ownership stake in General Growth Properties which acquired the Crown Building at 730 Fifth Avenue in New York City along with co-investors for approximately $1.8 billion which was funded with $1.3 billion of secured debt.