Cover Page
Cover Page | 12 Months Ended |
Dec. 31, 2019shares | |
Document Information [Line Items] | |
Entity Registrant Name | GRANITE REAL ESTATE INVESTMENT TRUST |
Entity Central Index Key | 0001564538 |
Document Type | 40-F |
Document Period End Date | Dec. 31, 2019 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Emerging Growth Company | false |
Entity Stapled Units Outstanding | 54,052,212 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Entity Interactive Data Current | Yes |
Entity Address, State or Province | ON |
Entity Address, Country | CA |
Ordinary shares [member] | |
Document Information [Line Items] | |
Trading Symbol | GRP.U |
Security Exchange Name | NYSE |
Title of 12(b) Security | Common Stock |
Stapled Units [member] | |
Document Information [Line Items] | |
Trading Symbol | GRP.U |
Security Exchange Name | NYSE |
Title of 12(b) Security | Stapled Units |
Combined Balance Sheets
Combined Balance Sheets - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Non-current assets: | ||
Investment properties | $ 4,457,899 | $ 3,424,978 |
Construction funds in escrow | 16,767 | |
Acquisition deposits | 34,288 | |
Deferred tax assets | 4,057 | 5,301 |
Fixed assets, net | 2,119 | 771 |
Other assets | 1,273 | 13,425 |
Total non-current assets | 4,482,115 | 3,478,763 |
Current assets: | ||
Assets held for sale | 44,238 | |
Other receivable | 11,650 | |
Accounts receivable | 7,812 | 4,316 |
Income taxes receivable | 315 | 212 |
Prepaid expenses and other | 3,387 | 2,510 |
Restricted cash | 470 | |
Cash and cash equivalents | 298,677 | 658,246 |
Total assets | 4,803,956 | 4,188,755 |
Non-current liabilities: | ||
Unsecured debt, net | 1,186,994 | 1,198,414 |
Cross currency interest rate swaps | 30,365 | 104,757 |
Long-term portion of lease obligations | 32,426 | |
Deferred tax liabilities | 320,972 | 303,965 |
Total non-current liabilities | 1,570,757 | 1,607,136 |
Current liabilities: | ||
Deferred revenue | 5,804 | 4,290 |
Accounts payable and accrued liabilities | 50,183 | 41,967 |
Distributions payable | 13,081 | 24,357 |
Short-term portion of lease obligations | 619 | |
Income taxes payable | 15,402 | 14,020 |
Total liabilities | 1,655,846 | 1,691,770 |
Equity: | ||
Stapled unitholders' equity | 3,146,143 | 2,495,518 |
Non-controlling interests | 1,967 | 1,467 |
Total equity | 3,148,110 | 2,496,985 |
Total liabilities and equity | $ 4,803,956 | $ 4,188,755 |
Combined Statements of Net Inco
Combined Statements of Net Income - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Combined Statements of Net Income | ||
Rental revenue | $ 272,823 | $ 246,487 |
Lease termination and close-out fees | 855 | 996 |
Revenue | 273,678 | 247,483 |
Property operating costs | 35,364 | 30,942 |
Net operating income | 238,314 | 216,541 |
General and administrative expenses | 31,419 | 29,404 |
Depreciation and amortization | 906 | 300 |
Interest income | (9,613) | (2,638) |
Interest expense and other financing costs | 29,941 | 22,413 |
Foreign exchange losses (gains), net | 1,633 | (9,390) |
Fair value gains on investment properties, net | (245,442) | (354,707) |
Fair value (gains) losses on financial instruments | (1,192) | 562 |
Acquisition transaction costs | 7,968 | |
Loss on sale of investment properties | 3,045 | 6,871 |
Other expense (income) | 2,675 | (2,250) |
Income before income taxes | 424,942 | 518,008 |
Income tax expense | 42,667 | 52,651 |
Net income | 382,275 | 465,357 |
Net income attributable to: | ||
Stapled unitholders | 382,079 | 465,156 |
Non-controlling interests | 196 | 201 |
Net income | $ 382,275 | $ 465,357 |
Combined Statements of Comprehe
Combined Statements of Comprehensive Income - CAD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Combined Statements of Comprehensive Income | |||
Net income | $ 382,275 | $ 465,357 | |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | [1] | (173,341) | 141,355 |
Unrealized gain (loss) on net investment hedges, includes income taxes of nil | [1] | 77,996 | (48,431) |
Total other comprehensive (loss) income | (95,345) | 92,924 | |
Comprehensive income | 286,930 | 558,281 | |
Comprehensive income attributable to: | |||
Stapled unitholders | 286,817 | 558,042 | |
Non-controlling interests | 113 | 239 | |
Comprehensive income | $ 286,930 | $ 558,281 | |
[1] | Items that may be reclassified subsequently to net income if a foreign subsidiary is disposed of or hedges are terminated or no longer assessed as effective (note 2(h)). |
Combined Statements of Compre_2
Combined Statements of Comprehensive Income (Parenthetical) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Combined Statements of Comprehensive Income | ||
Unrealized gain (loss) on net investment hedges, income taxes | $ 0 | $ 0 |
Combined Statements of Unithold
Combined Statements of Unitholders' Equity - CAD ($) shares in Thousands, $ in Thousands | Total | Stapled Units | Contributed surplus | Retained earnings (Deficit) | Accumulated other comprehensive income | Stapled Unitholders' Equity | Non-controlling interests |
Equity at beginning of period at Dec. 31, 2017 | $ 2,137,862 | $ 2,118,460 | $ 60,274 | $ (160,686) | $ 118,566 | $ 2,136,614 | $ 1,248 |
Balance at beginning of period (in units) at Dec. 31, 2017 | 46,903 | ||||||
Net income | 465,357 | 465,156 | 465,156 | 201 | |||
Other comprehensive income (loss) | 92,924 | 92,886 | 92,886 | 38 | |||
Distributions (note 10) | (138,861) | 41,128 | (179,969) | (138,841) | (20) | ||
Units issued under the stapled unit plan | 3,233 | $ 3,233 | 3,233 | ||||
Units issued under the stapled unit plan (in units) | 64 | ||||||
Units repurchased for cancellation | (63,530) | $ (57,915) | (5,615) | (63,530) | |||
Units repurchased for cancellation (in units) | (1,282) | ||||||
Equity at end of period at Dec. 31, 2018 | 2,496,985 | $ 2,063,778 | 95,787 | 124,501 | 211,452 | 2,495,518 | 1,467 |
Balance at end of period (in units) at Dec. 31, 2018 | 45,685 | ||||||
Net income | 382,275 | 382,079 | 382,079 | 196 | |||
Other comprehensive income (loss) | (95,345) | (95,262) | (95,262) | (83) | |||
Stapled unit offering, net of issuance costs | 502,003 | $ 502,003 | 502,003 | ||||
Stapled unit offering, net of issuance costs (in units) | 8,349 | ||||||
Distributions (note 10) | (139,481) | (139,331) | (139,331) | (150) | |||
Contributions from non-controlling interests | 537 | 537 | |||||
Special distribution paid in units and immediately consolidated | $ 41,128 | (41,128) | |||||
Units issued under the stapled unit plan | 1,207 | $ 1,207 | 1,207 | ||||
Units issued under the stapled unit plan (in units) | 20 | ||||||
Units repurchased for cancellation | (71) | $ (66) | (5) | (71) | |||
Units repurchased for cancellation (in units) | (2) | ||||||
Equity at end of period at Dec. 31, 2019 | $ 3,148,110 | $ 2,608,050 | $ 54,654 | $ 367,249 | $ 116,190 | $ 3,146,143 | $ 1,967 |
Balance at end of period (in units) at Dec. 31, 2019 | 54,052 |
Combined Statements of Cash Flo
Combined Statements of Cash Flows - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
OPERATING ACTIVITIES | ||
Net income | $ 382,275 | $ 465,357 |
Items not involving current cash flows | (196,583) | (294,790) |
Leasing commissions paid | (1,307) | (4,225) |
Tenant incentives paid | (513) | (9,913) |
Current income tax expense | 5,071 | 7,631 |
Income taxes paid | (3,009) | (10,273) |
Interest expense | 29,275 | 21,440 |
Interest paid | (28,833) | (21,116) |
Changes in working capital balances | (2,945) | 3,777 |
Cash provided by operating activities | 183,431 | 157,888 |
INVESTING ACTIVITIES | ||
Property acquisitions | (930,878) | (549,120) |
Proceeds from disposals of investment properties, net | 85,536 | 681,319 |
Capital expenditures - Maintenance or improvements | (2,889) | (17,799) |
Capital expenditures - Developments or expansions | (27,407) | (15,378) |
Construction funds in escrow | (17,125) | |
Mortgage receivable proceeds | 16,845 | 30,000 |
Acquisition deposits | (33,086) | |
Fixed asset additions | (176) | (111) |
Decrease (increase) in other assets | 36 | |
Cash provided by (used in) investing activities | (876,094) | 95,861 |
FINANCING ACTIVITIES | ||
Monthly distributions paid | (136,897) | (125,131) |
Special distribution paid | (13,710) | |
Proceeds from unsecured term loans | 548,677 | |
Repayment of lease obligations | (598) | |
Settlement of cross currency swap | (6,825) | |
Proceeds from bank indebtedness | 247,274 | |
Repayments of bank indebtedness | (279,768) | |
Financing costs paid | (452) | (3,319) |
Distributions to non-controlling interests | (150) | (20) |
Contributions by non-controlling interests | 225 | |
Proceeds from stapled unit offerings, net of issuance costs | 502,003 | |
Repurchase of stapled units | (71) | (63,530) |
Cash provided by (used in) financing activities | 343,525 | 324,183 |
Effect of exchange rate changes on cash and cash equivalents | (10,431) | 11,295 |
Net (decrease) increase in cash and cash equivalents during the year | (359,569) | 589,227 |
Cash and cash equivalents, beginning of year | 658,246 | 69,019 |
Cash and cash equivalents, end of year | $ 298,677 | $ 658,246 |
NATURE AND DESCRIPTION OF THE T
NATURE AND DESCRIPTION OF THE TRUST | 12 Months Ended |
Dec. 31, 2019 | |
NATURE AND DESCRIPTION OF THE TRUST | |
NATURE AND DESCRIPTION OF THE TRUST | 1. NATURE AND DESCRIPTION OF THE TRUST Effective January 3, 2013, Granite Real Estate Inc. (“Granite Co.”) completed its conversion from a corporate structure to a stapled unit real estate investment trust (“REIT”) structure. All of the common shares of Granite Co. were exchanged, on a one-for-one Business Corporations Act The stapled units trade on the Toronto Stock Exchange and on the New York Stock Exchange. The principal office of Granite REIT is 77 King Street West, Suite 4010, P.O. Box 159, Toronto-Dominion Centre, Toronto, Ontario, M5K 1H1, Canada. The Trust is a Canadian-based REIT engaged in the acquisition, development, ownership and management of industrial, warehouse and logistics properties in North America and Europe. The Trust’s tenant base includes Magna International Inc. and its operating subsidiaries (together ‘‘Magna’’) as its largest tenant, in addition to tenants from various other industries. These combined financial statements were approved by the Board of Trustees of Granite REIT and Board of Directors of Granite GP on March 4, 2020. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES The accounting policies described below were applied consistently to all periods presented in these combined financial statements except for the new accounting standards and interpretations described in note 2(o) which were adopted effective January 1, 2019. (a) Basis of Presentation and Statement of Compliance The combined financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). (b) Combined Financial Statements and Basis of Consolidation As a result of the REIT conversion described in note 1, the Trust does not have a single parent; however, each unit of Granite REIT and each share of Granite GP trade as a single stapled unit and accordingly, Granite REIT and Granite GP have identical ownership. Therefore, these financial statements have been prepared on a combined basis whereby the assets, liabilities and results of Granite GP and Granite REIT have been combined. The combined financial statements include the subsidiaries of Granite GP and Granite REIT. Subsidiaries are fully consolidated by Granite GP or Granite REIT from the date of acquisition, being the date on which control is obtained. The subsidiaries continue to be consolidated until the date that such control ceases. Control exists when Granite GP or Granite REIT have power, exposure or rights to variable returns and the ability to use their power over the entity to affect the amount of returns it generates. All intercompany balances, income and expenses and unrealized gains and losses resulting from intercompany transactions are eliminated. (c) Trust Units The stapled units are redeemable at the option of the holder and, therefore, are required to be accounted for as financial liabilities, except where certain exemption conditions are met, in which case redeemable instruments may be classified as equity. The attributes of the stapled units meet the exemption conditions set out in IAS 32, Financial Instruments: Presentation (d) Investment Properties The Trust accounts for its investment properties, which include income-producing properties, properties under development and land held for development, in accordance with IAS 40, Investment Property Income-Producing Properties The carrying value of income-producing properties includes the impact of straight-line rental revenue (note 2(k)), tenant incentives and deferred leasing costs since these amounts are incorporated in the determination of the fair value of income-producing properties. When an income-producing property is disposed of, the gain or loss is determined as the difference between the disposal proceeds, net of selling costs, and the carrying amount of the property and is recognized in net income in the period of disposal. Properties Under Development The Trust’s development properties are classified as such until the property is substantially completed and available for occupancy. The initial cost of properties under development includes the acquisition cost of the land and direct development or expansion costs, including construction costs, borrowing costs and indirect costs wholly attributable to development. Borrowing costs are capitalized to projects under development or construction based on the average accumulated expenditures outstanding during the period multiplied by the Trust’s average borrowing rate on existing debt. Where borrowings are associated with specific developments, the amount capitalized is the gross borrowing cost incurred on such borrowings less any investment income arising on temporary investment of these borrowings. The capitalization of borrowing costs is suspended if there are prolonged periods that development activity is interrupted. The Trust capitalizes direct and indirect costs, including property taxes and insurance of the development property, if activities necessary to ready the development property for its intended use are in progress. Costs of internal personnel and other indirect costs that are wholly attributable to a project are capitalized as incurred. If considered reliably measurable, properties under development are carried at fair value. Properties under development are measured at cost if fair value is not reliably measurable. In determining the fair value of properties under development consideration is given to, among other things, remaining construction costs, development risk, the stage of project completion and the reliability of cash inflows after project completion. (e) Business Combinations The Trust accounts for property acquisitions as a business combination if the particular assets and set of activities acquired can be operated and managed as a business in their current state for the purpose of providing a return to the unitholders. The Trust applies the acquisition method to account for business combinations. The consideration transferred for a business combination is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Trust. The total consideration includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired as well as liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date. The Trust recognizes any non-controlling acquisition-by-acquisition non-controlling Acquisition related costs are expensed as incurred. Any contingent consideration is recognized at fair value at the acquisition date. Subsequent changes to the fair value of contingent consideration that is recorded as an asset or liability is recognized in net income. Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling (f) Assets Held for Sale Non-current (g) Foreign Currency Translation The assets and liabilities of the Trust’s foreign operations are translated into Canadian dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case, for material transactions, the exchange rates at the dates of those transactions are used. Exchange differences arising are recognized in other comprehensive income and accumulated in equity. In preparing the financial statements of each entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the average rates of exchange prevailing in the period. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary Non-monetary • The effective portion of exchange differences on transactions entered into in order to hedge certain foreign currency risks are recognized in other comprehensive income; • Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation) are recognized in other comprehensive income; and • Exchange differences on foreign currency borrowings related to capitalized interest for assets under construction are recognized in investment properties. (h) Financial Instruments and Hedging Financial Assets and Financial Liabilities The following summarizes the Trust’s classification and measurement basis of its financial assets and liabilities: Classification and Financial assets Construction funds in escrow Amortized Cost Long-term receivables included in other assets Amortized Cost Other receivable (proceeds receivable associated with a property disposal) Fair Value Accounts receivable Amortized Cost Foreign exchange forward contracts included in prepaid expenses and other Fair Value Restricted cash Amortized Cost Cash and cash equivalents Amortized Cost Financial liabilities Unsecured debentures, net Amortized Cost Unsecured term loans, net Amortized Cost Cross currency interest rate swaps Fair Value Accounts payable and accrued liabilities Amortized Cost Foreign exchange forward contracts included in accounts payable and accrued liabilities Fair Value Distributions payable Amortized Cost The Trust recognizes an allowance for expected credit losses (“ECL”) for financial assets measured at amortized cost. The impact of the credit loss modeling process is summarized as follow: • The Trust did not record an ECL allowance against long-term receivables as historical experience of loss on these balances is insignificant and, based on the assessment of forward-looking information, no significant increases in losses are expected. The Trust will continue to assess the valuation of these instruments. • The Trust did not record an ECL allowance against accounts receivable and has determined that its internal processes of evaluating each receivable on a specific basis for collectability using historical experience and adjusted for forward-looking information, would appropriately allow the Trust to determine if there are significant increases in credit risk to then record a corresponding ECL allowance. For financial liabilities measured at amortized cost, the liability is amortized using the effective interest rate method. Under the effective interest rate method, any transaction fees, costs, discounts and premiums directly related to the financial liabilities are recognized in net income over the expected life of the obligation. In regards to term modifications for financial liabilities, when a financial liability measured at amortized cost is modified or exchanged, and such modification or exchange does not result in derecognition, the adjustment to the amortized cost of the financial liability as a result of the modification or exchange is recognized in net income. Derivatives and Hedging Derivative instruments, such as the cross currency interest rate swaps and the foreign exchange forward contracts, are recorded in the combined balance sheet at fair value, including those derivatives that are embedded in financial or non-financial The Trust applies hedge accounting to certain derivative and non-derivative (i) Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents include cash and short-term investments with original maturities of three months or less. Restricted cash represents segregated cash accounts for a specific purpose and cannot be used for general corporate purposes. (j) Fixed Assets Fixed assets include computer hardware and software, furniture and fixtures and leasehold improvements, which are recorded at cost less accumulated depreciation. Depreciation expense is recorded on a straight-line basis over the estimated useful lives of the fixed assets, which typically range from 3 to 5 years for computer hardware and software and 5 to 7 years for other furniture and fixtures. Leasehold improvements are amortized over the term of the applicable lease. Fixed assets also include right-of-use Leases right-of-use (k) Revenue Recognition Where Granite has retained substantially all the benefits and risks of ownership of its rental properties, leases with its tenants are accounted for as operating leases. Where substantially all the benefits and risks of ownership of the Trust’s rental properties have been transferred to its tenants, the Trust’s leases are accounted for as finance leases. All of the Trust’s current leases are operating leases. Revenue from investment properties include base rents earned from tenants under lease agreements, property tax and operating cost recoveries and other incidental income. Rents from tenants may contain rent escalation clauses or free rent periods which are recognized in revenue on a straight-line basis over the term of the lease. The difference between the revenue recognized and the contractual rent is included in investment properties as straight-line rents receivable. In addition, tenant incentives including cash allowances provided to tenants are recognized as a reduction in rental revenue on a straight-line basis over the term of the lease where it is determined that the tenant fixturing has no benefit to the property beyond the existing tenancy. Property tax and operating cost recoveries from tenants are recognized as revenue in the period in which applicable costs are incurred. (l) Unit-Based Compensation Plans Incentive Stock Option Plan Compensation expense for option grants is based on the fair value of the options at the grant date and is recognized over the period from the grant date to the date the award is vested. A liability is recognized for outstanding options based upon the fair value as the Trust is an open-ended trust making its units redeemable. During the period in which options are outstanding, the liability is adjusted for changes in the fair value with such adjustments being recognized as compensation expense in general and administrative expenses in the period in which they occur. The liability balance is reduced as options are exercised and recorded in equity as stapled units along with the proceeds received on exercise. Executive Deferred Stapled Unit Plan The executive deferred stapled unit plan is measured at fair value at the date of grant and amortized to compensation expense from the effective date of the grant to the final vesting date. Compensation expense is recognized on a proportionate basis consistent with the vesting features of each tranche of the grant. Compensation expense for executive deferred stapled units granted under the plan is recognized in general and administrative expenses with a corresponding liability recognized based upon the fair value of the Trust’s stapled units as the Trust is an open-ended trust making its units redeemable. During the period in which the executive deferred stapled units are outstanding, for grants with no performance criteria, the liability is adjusted for changes in the market value of the Trust’s stapled unit, and for grants with performance criteria the liability is measured at fair value using the Monte Carlo simulation model (note 11), with both such adjustments being recognized as compensation expense in general and administrative expenses in the period in which they occur. The liability balance is reduced as deferred stapled units are settled for stapled units and recorded in equity. Director/Trustee Deferred Share Unit Plan The compensation expense and a corresponding liability associated with the director/trustee deferred share unit plan is measured based on the market value of the underlying stapled units. During the period in which the awards are outstanding, the liability is adjusted for changes in the market value of the underlying stapled unit, with such positive or negative adjustments being recognized in general and administrative expenses in the period in which they occur. The liability balance is settled for cash when a director/trustee ceases to be a member of the Board. (m) Income Taxes Operations in Canada Granite qualifies as a mutual fund trust under the Income Tax Act (Canada) (the “Act”) and as such the Trust itself will not be subject to income taxes provided it continues to qualify as a REIT for purposes of the Act. A REIT is not taxable and not considered to be a Specified Investment Flow-through Trust provided it complies with certain tests and it distributes all of its taxable income in a taxation year to its unitholders. The Trust’s qualification as a REIT results in no current or deferred income tax being recognized in the combined financial statements for income taxes related to the Canadian investment properties. Operations in the United States The Trust’s investment property operations in the United States are conducted in a qualifying United States REIT (“US REIT”) for purposes of the Internal Revenue Code of 1986, as amended. As a qualifying US REIT, it is not taxable provided it complies with certain tests in addition to the requirement to distribute substantially all of its taxable income. As a qualifying US REIT, current income taxes on U.S. taxable income have not been recorded in the combined financial statements. However, the Trust has recorded deferred income taxes that may arise on the disposition of its investment properties as the Trust will likely be subject to entity level income tax in connection with such transactions pursuant to the Foreign Investment in Real Property Tax Act. Operations in Europe The Trust consolidates certain entities that continue to be subject to income tax. Income taxes for taxable entities in Europe, as well as other entities in Canada or the United States subject to tax, are recorded as follows: Current Income Tax The current income tax expense is determined on the basis of enacted or substantively enacted tax rates and laws at each balance sheet date. Deferred Income Tax Deferred income tax is recorded, using the liability method, on temporary differences arising between the tax basis of assets and liabilities and the amounts reported on the combined financial statements. Deferred income tax assets and liabilities are measured at tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred income tax assets are recognized to the extent that it is probable that deductions, tax credits or tax losses will be utilized. Each of the current and deferred tax assets and liabilities are offset when they are levied by the same taxation authority in either the same taxable entity or different taxable entities within the same reporting group that settle on a net basis. (n) Significant Accounting Judgments, Estimates and Assumptions The preparation of the combined financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts and disclosures made in the financial statements and accompanying notes. Management believes that the judgments, estimates and assumptions utilized in preparing the combined financial statements are reasonable and prudent; however, actual results could be materially different and require an adjustment to the reported results. Judgments The following are the critical judgments that have been made in applying the Trust’s accounting policies and that have the most significant effect on the amounts recognized in the combined financial statements: (i) Leases The Trust’s policy for revenue recognition is described in note 2(k). The Trust makes judgments in determining whether certain leases are operating or finance leases, in particular tenant leases with long contractual terms or leases where the property is a large square-footage and/or architecturally specialized. (ii) Investment properties The Trust’s policy relating to investment properties is described in note 2(d). In applying this policy, judgment is used in determining whether certain costs incurred for tenant improvements are additions to the carrying amount of the property or represent incentives, identifying the point at which practical completion of properties under development occurs and determining borrowing costs to be capitalized to the carrying value of properties under development. Judgment is also applied in determining the use, extent and frequency of independent appraisals. (iii) Income taxes The Trust applies judgment in determining whether it will continue to qualify as a REIT for both Canadian and U.S. tax purposes for the foreseeable future. However, should it at some point no longer qualify, it would be subject to income tax and would be required to recognize current and deferred income taxes. Estimates and Assumptions The key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities include the following: (i) Valuation of investment properties The fair value of investment properties is determined by management using primarily the discounted cash flow method in which the income and expenses are projected over the anticipated term of the investment plus a terminal value discounted using an appropriate discount rate. The Trust obtains, from time to time, appraisals from independent qualified real estate valuation experts. However, the Trust does not measure its investment properties based on these appraisals but uses them as data points, together with other external market information accumulated by management, in arriving at its own conclusions on values. Management uses valuation assumptions such as discount rates, terminal capitalization rates and market rental rates applied in external appraisals or sourced from valuation experts; however, the Trust also uses its historical renewal experience with tenants, its direct knowledge of the specialized nature of certain of Granite’s portfolio and tenant profile and the actual condition of the properties in making business judgments about lease renewal probabilities, renewal rents and capital expenditures. The critical assumptions relating to the Trust’s estimates of fair values of investment properties include the receipt of contractual rents, contractual renewal terms, expected future market rental rates, discount rates that reflect current market uncertainties, capitalization rates and recent investment property prices. If there is any change in these assumptions or regional, national or international economic conditions, the fair value of investment properties may change materially. Refer to note 4 for further information on the estimates and assumptions made by management. (ii) Fair value of financial instruments Where the fair value of financial assets or liabilities recorded on the balance sheet or disclosed in the notes cannot be derived from active markets, they are determined using valuation techniques including the discounted cash flow method. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as credit risk and volatility. Changes in assumptions about these factors could materially affect the reported fair value of financial instruments. (iii) Income taxes The Trust operates in a number of countries and is subject to the income tax laws and related tax treaties in each of its operating jurisdictions. These laws and treaties can be subject to different interpretations by relevant taxation authorities. Significant judgment is required in the estimation of Granite’s income tax expense, the interpretation and application of the relevant tax laws and treaties and the provision for any exposure that may arise from tax positions that are under audit by relevant taxation authorities. The recognition and measurement of deferred tax assets or liabilities is dependent on management’s estimate of future taxable profits and income tax rates that are expected to be in effect in the period the asset is realized or the liability is settled. Any changes in management’s estimate can result in changes in deferred tax assets or liabilities as reported in the combined balance sheets and also the deferred income tax expense in the combined statements of net income. (o) Accounting Standards Adopted in 2019 The Trust applied new standards and interpretations in the annual combined financial statements for the year ended December 31, 2019. The nature and effect of the changes are disclosed below. Amendments to IFRS 3, Business Combinations The Trust adopted the amendments to IFRS 3, Business Combinations Following the adoption of the IFRS 3 Amendments, the Trust continues to account for business combinations in which control is acquired under the acquisition method. When a property acquisition is made, the Trust considers the inputs, processes and outputs of the acquiree in assessing whether it meets the definition of a business. When the acquired set of activities and assets lack a substantive process in place and will be integrated into the Trust’s existing operations, the acquisition does not meet the definition of a business and is accounted for as an asset acquisition. An asset acquisition is accounted for as an acquisition of a group of assets and liabilities. The cost of the acquisition, including transaction costs, is allocated to the assets and liabilities acquired based on their relative fair values, and no goodwill or deferred tax is recognized. Subsequently, where the acquired asset represents an investment property, it is measured at fair value in accordance with IAS 40, Investment Property As a result of the adoption of the IFRS 3 Amendments, Granite’s income-producing property acquisitions are considered asset acquisitions rather than business combinations. Accordingly, for the year ended December 31, 2019, acquisition transaction costs of $3.6 million were first capitalized to the cost of the property and then expensed to net fair value gains/losses on investment properties as a result of measuring the property at fair value instead of directly expensing these amounts to acquisition transaction costs in the combined statements of net income. There was no significant impact to net income, unitholders’ equity or cash flows from the adoption of the IFRS 3 Amendments as at December 31, 2019 and for the year then ended. For the year ended December 31, 2018, the income-producing properties acquired in the year were accounted as business combinations in accordance with the accounting policy followed by the Trust at that time and prior to the adoption and prospective application of the IFRS 3 Amendments effective January 1, 2019. IFRS 16, Leases In January 2016, the IASB issued IFRS 16, Leases Leases on-balance The Trust has applied IFRS 16 using the modified retrospective approach, and therefore the cumulative effect of initial application is recognized in retained earnings at January 1, 2019. Accordingly, the comparative information presented for 2018 has not been restated. As a lessee Definition of a lease Previously, the Trust determined at contract inception whether an arrangement was or contained a lease under IAS 17. The Trust now assesses whether a contract is or contains a lease based on the new definition of a lease. Under IFRS 16, a contract is or contains a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. On transition to IFRS 16, the Trust applied IFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as leases under IAS 17 and associated interpretative guidance were not reassessed as the practical expedient offered under the standard was applied. Therefore, the new definition of a lease under IFRS 16 has been applied only to contracts entered into or changed on or after January 1, 2019. In accordance with IFRS 16, at inception or on modification of a contract that contains a lease component, the Trust allocates the consideration in the contract to each lease and non-lease Accounting policy The Trust recognizes a right-of-use right-of-use right-of-use right-of-use right-of-use The lease liability is initially measured at the present value of the lease payments at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, at the Trust’s incremental borrowing rate. Generally, the Trust uses its incremental borrowing rate as the discount rate. The Trust presents lease liabilities in “lease obligations” on the combined balance sheet. The lease obligation is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee or, as appropriate, a change in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. The Trust has applied judgment to determine the lease term for some lease contracts in which it is a lessee that include renewal or termination options. The assessment of whether the Trust is reasonably certain to exercise such options impacts the lease term which, in turn, significantly affects the amount of lease obligations and right-of-use Transition In accordance with IFRS 16, the Trust recognized right-of-use low-value right-of-use low-value The Trust leases assets related to ground leases, office space and equipment. Lease obligations were measured at the present value of the remaining lease payments, discounted at the Trust’s incremental borrowing rate as at January 1, 2019. Right-of-use • Their carrying amount as if IFRS 16 had been applied since the commencement date, discounted using the lessee’s incremental borrowing rate at the date of initial application; or • An amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments. The Trust recognized a right-of-use The Trust used the following additional practical expedients when applying IFRS 16 to leases previously classified as operating leases under IAS 17: • Applied the exemption not to recognize right-of-use • Applied the exemption not to allocate the consideration in a contract to each lease and non-lease • Excluded initial direct costs from measuring the right-of-use • Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease. Impact on transition As at December 31, 2019, the Trust had leases for the use of office space, office and other equipment and ground leases for the land upon which four income-producing properties in Europe and Canada are situated. In accordance with IFRS 16, the Trust recognized these operating leases as right-of-use Fixed assets Investment Lease Office Equipment Total Ground Balance at January 1, 2019 $ 1,780 $ 46 $ 1,826 $ 11,801 $ 13,627 Balance at December 31, 2019 $ 1,429 $ 102 $ 1,531 $ 31,523 $ 33,045 When measuring lease liabilities for leases that were classified as operating leases, the Trust discounted lease payments using its incremental borrowing rate at January 1, 2019. The weighted average rate applied is 4.4%. During the year ended December 31, 2019, the Trust recorded an additional right-of-use right-of-use In accordance with IFRS 16, the Trust has recognized depreciation and interest costs, instead of operating lease expense. During the year ended December 31, 2019, the Trust recognized $0.6 million of depreciation and amortization expense, and $1.3 million of interest expense from these leases. No depreciation is recognized for the right-of-use Future minimum lease payments relating to the right-of-use 2020 $ 619 2021 719 2022 417 2023 137 2024 119 2025 and thereafter 31,034 $ 33,045 The lease commitments as at December 31, 2018 comprised $27.2 million related to two ground leases in Europe with annual payments of $0.5 million and $0.1 million expiring in 2049 and 2096, respectively, and $1.6 million related to certain other operating leases. On January 1, 2019, the Trust recognized lease obligations on the combined balance sheet of $13.6 million for these aforementioned lease commitments which include the impact from present value discounting of $15.4 million and certain other adjustments of $0.2 million. As a lessor In contrast to lessee accounting, the requirements for lessor accounting have remained largely unchanged with the distinction between operating leases and finance leases being retained. The Trust leases its investment properties, including right-of-use in-place IFRIC 23, Uncertainty Over Income Tax Treatments In June 2017, the IFRS Interpretations Committee issued IFRIC 23, Uncertainty Over Income Tax Treatments Income Taxes (p) Future Accounting Policy Changes As at December 31, 2019, there are no new accounting standards issued but not yet applicable to the combined financial statements except for the following: Agenda Decision — IFRS 16, Leases In December 2019, the IFRS Interpretations Committee issued a final agenda decision in regards to the determination of the lease term for cancellable or re |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2019 | |
ACQUISITIONS | |
ACQUISITIONS | 3. ACQUISITIONS During the years ended December 31, 2019 and 2018, Granite acquired income-producing properties and development land consisting of the following: 2019 Acquisitions Property Location Date acquired Property Transaction costs Total Income-producing properties (1) 201 Sunridge Boulevard Wilmer, TX March 1, 2019 $ 58,087 $ 141 $ 58,228 3501 North Lancaster Hutchins Road Lancaster, TX March 1, 2019 106,120 168 106,288 2020 & 2095 Logistics Drive (2) Mississauga, ON April 9, 2019 174,106 146 174,252 1901 Beggrow Street Columbus, OH May 23, 2019 71,607 289 71,896 Heirweg 3 Born, Netherlands July 8, 2019 25,704 1,640 27,344 1222 Commerce Parkway Horn Lake, MS August 1, 2019 24,492 231 24,723 831 North Graham Road Greenwood, IN October 4, 2019 39,581 40 39,621 100 Clyde Alexander Lane (3) Pooler, GA October 18, 2019 62,657 614 63,271 1301 Chalk Hill (4) Dallas, TX November 19, 2019 269,764 247 270,011 330-366 Southaven, MS December 19, 2019 63,717 38 63,755 440-480 Southaven, MS December 19, 2019 51,643 33 51,676 $ 947,478 $ 3,587 $ 951,065 Development land: 6701, 6702 Purple Sage Road Houston, TX July 1, 2019 33,361 510 33,871 $ 980,839 $ 4,097 $ 984,936 (1) The income-producing properties acquired in 2019 have been accounted for as asset acquisitions reflecting the adoption of the IFRS 3 Amendments effective January 1, 2019 (note 2(o)). (2) Includes a right-of-use (3) The Trust acquired the leasehold interest in this property which resulted in the recognition of a right-of-use asset, including transaction costs, of $63,271. The Trust will acquire freehold title to the property on December 31, 2022. (4) Excludes cash held in escrow at December 31, 2019 to complete construction. At the acquisition date, the developed property located at 1301 Chalk Hill Road, Dallas, Texas had outstanding construction work which resulted in $20.5 million (US$15.5 million) of the purchase price being placed in escrow to pay for the remaining construction costs. The funds will be released from escrow as the construction is completed. As at December 31, 2019, $16.8 million (US$12.9 million) remained in escrow. The purchase price noted above does not include the cash held in escrow to complete the construction. As construction is completed, the construction costs will be capitalized to the cost of the investment property. During the year ended December 31, 2019, the transaction costs of $4.1 million, which included land transfer tax, legal and advisory costs, were first capitalized to the cost of the respective property and then subsequently expensed to net fair value gains on investment properties on the combined statement of net income as a result of measuring the properties at fair value. 2018 Acquisitions Property Location Date acquired Property Income-producing properties (1) 3870 Ronald Reagan Parkway Plainfield, IN March 23, 2018 $ 50,835 181 Antrim Commons Drive Greencastle, PA April 4, 2018 44,323 Ohio portfolio (four properties): 10, 100 and 115 Enterprise Parkway West Jefferson, OH May 23, 2018 299,297 Joseph-Meyer-Straße 3 Erfurt, Germany July 12, 2018 82,677 120 Velocity Way Shepherdsville, KY December 3, 2018 65,866 542,998 Development land: Lot 18, Park 70 West Jefferson, OH November 1, 2018 1,232 $ 544,230 (1) The income-producing properties acquired in 2018 were accounted for as business combinations (note 2(o)) in accordance with the accounting policy followed by the Trust during the 2018 year and prior to the adoption and prospective application of the IFRS 3 Amendments effective January 1, 2019. During the year ended December 31, 2018, the Trust recognized $20.1 million of revenue and $33.2 million of net income related to the aforementioned acquisitions. Had these acquisitions occurred on January 1, 2018, the Trust would have recognized proforma revenue and net income of approximately $35.4 million and $56.7 million, respectively, during the year ended December 31, 2018. The following table summarizes the total consideration paid for the income-producing property acquisitions and the fair value of the total identifiable net assets acquired at the acquisition dates: Acquisitions During the Year Ended December 31, 2018 Purchase consideration Cash on hand $ 380,206 Cash sourced from credit facility 167,689 Total cash consideration paid $ 547,895 Recognized amounts of identifiable net assets acquired measured at their respective fair values: Investment properties $ 542,998 Working capital 4,897 Total identifiable net assets $ 547,895 During the year ended December 31, 2018, the Trust incurred $7.4 million of land transfer tax, legal and advisory costs associated with the aforementioned completed acquisitions, of which $5.4 million related to the land transfer tax for the property acquired in Erfurt, Germany. The Trust incurred an additional $0.6 million of costs related to pursuing other acquisition opportunities. These costs are included in acquisition transaction costs in the combined statement of net income. As at December 31, 2018, Granite had made deposits of $34.3 million relating to property acquisitions. A $7 million deposit was made to acquire the leasehold interest in two income-producing properties located in Mississauga, Ontario and a $27.3 million (US$20.0 million) deposit was made in connection with a contractual commitment to acquire a property under development in the state of Texas. The properties were acquired during the year ended December 31, 2019. |
INVESTMENT PROPERTIES
INVESTMENT PROPERTIES | 12 Months Ended |
Dec. 31, 2019 | |
INVESTMENT PROPERTIES | |
INVESTMENT PROPERTIES | 4. INVESTMENT PROPERTIES As at December 31, 2019 2018 Income-producing properties $ 4,377,623 $ 3,403,985 Properties under development 51,310 17,009 Land held for development 28,966 3,984 $ 4,457,899 $ 3,424,978 Changes in investment properties are shown in the following table: Years ended December 31, 2019 2018 Income- producing Properties Land held for Income- producing Properties under Land held for Balance, beginning of year $ 3,403,985 $ 17,009 $ 3,984 $ 2,714,684 $ — $ 18,884 Ground leases (1) 11,801 — — — — — Adjusted balance, beginning of year $ 3,415,786 $ 17,009 $ 3,984 $ 2,714,684 $ — $ 18,884 Additions — Capital expenditures: Maintenance or improvements 3,272 — — 8,164 — — Developments or expansions 3,641 27,250 — 19,986 287 66 — Acquisitions (note 3) 951,065 8,932 24,939 542,998 — 1,232 — Leasing commissions 1,079 — — 3,340 — — — Tenant incentives 515 — — 816 — — Transfers to properties under development — — — (12,206 ) 16,473 (4,267 ) Fair value gains (losses), net 243,351 (135 ) 557 353,258 — 1,253 Foreign currency translation, net (180,107 ) (1,746 ) (514 ) 147,336 249 196 Amortization of straight-line rent 5,074 — — 4,274 — — Amortization of tenant incentives (5,122 ) — — (5,402 ) — — Other changes 189 — — (972 ) — — Classified as assets held for sale (note 5) (61,120 ) — — (372,291 ) — (13,380 ) Balance, end of year $ 4,377,623 $ 51,310 $ 28,966 $ 3,403,985 $ 17,009 $ 3,984 (1) Impact of adoption of IFRS 16, Leases During the year ended December 31, 2019, the Trust disposed of 13 properties (2018 — 16 properties) previously classified as assets held for sale for aggregate gross proceeds of $105.8 million (note 5). The fair value gains during the year ended December 31, 2019, excluding the 13 properties sold in the year, were $243.8 million. As at December 31, 2019, there are no properties classified as assets held for sale (note 5). The Trust determines the fair value of an income-producing property based upon, among other things, rental income from current leases and assumptions about rental income from future leases reflecting market conditions and lease renewals at the applicable balance sheet dates, less future cash outflows in respect of such leases. Fair values are primarily determined by discounting the expected future cash flows, generally over a term of 10 years, plus a terminal value based on the application of a capitalization rate to estimated year 11 cash flows. The fair values of properties under development are measured using a discounted cash flow model, net of costs to complete, as of the balance sheet date. The Trust measures its investment properties using valuations prepared by management. The Trust does not measure its investment properties based on valuations prepared by external appraisers but uses such external appraisals as data points, together with other external market information accumulated by management, in arriving at its own conclusions on values. Management uses valuation assumptions such as discount rates, terminal capitalization rates and market rental rates applied in external appraisals or sourced from valuation experts; however, the Trust also uses its historical renewal experience with tenants, its direct knowledge of the specialized nature of certain of Granite’s portfolio and tenant profile and its knowledge of the actual condition of the properties in making business judgments about lease renewal probabilities, renewal rents and capital expenditures. There has been no change in the valuation methodology during the year other than recognizing related ground lease obligations as part of the adoption of IFRS 16, Leases Included in investment properties is $18.9 million (2018 — $14.8 million) of net straight-line rent receivable arising from the recognition of rental revenue on a straight-line basis over the lease term. Details about contractual obligations to purchase, construct and develop properties can be found in the commitments and contingencies note (note 20). Tenant minimum rental commitments payable to Granite on non-cancellable 2020 $ 267,967 2021 262,063 2022 247,796 2023 218,757 2024 148,423 2025 and thereafter 818,685 $ 1,963,691 Valuations are most sensitive to changes in discount rates and terminal capitalization rates. The key valuation metrics for income-producing properties by country are set out below: As at December 31, 2019 2018 (1) Weighted (2) Maximum Minimum Weighted (2) Maximum Minimum Canada Discount rate 5.90% 8.75% 5.25% 5.63% 7.75% 5.00% Terminal capitalization rate 5.55% 8.00% 5.00% 6.01% 7.00% 5.00% United States Discount rate 6.41% 9.50% 5.00% 6.68% 10.00% 5.75% Terminal capitalization rate 6.23% 8.75% 5.25% 6.46% 9.75% 5.25% Germany Discount rate 6.83% 8.25% 5.70% 6.89% 8.25% 5.70% Terminal capitalization rate 6.31% 8.75% 5.00% 6.89% 8.75% 5.25% Austria Discount rate 7.96% 10.00% 7.00% 8.37% 10.00% 8.00% Terminal capitalization rate 7.34% 9.75% 6.75% 7.88% 10.00% 7.00% Netherlands Discount rate 5.24% 6.00% 4.70% 5.93% 6.50% 5.70% Terminal capitalization rate 6.14% 7.55% 5.60% 6.48% 7.45% 6.00% Other Discount rate 8.25% 10.00% 7.25% 8.23% 9.50% 6.75% Terminal capitalization rate 8.20% 9.75% 6.25% 8.48% 10.00% 6.75% Total Discount rate 6.60% 10.00% 4.70% 6.90% 10.00% 5.00% Terminal capitalization rate 6.32% 9.75% 5.00% 6.81% 10.00% 5.00% (1) Excludes assets held for sale (note 5). (2) Weighted based on income-producing property fair value. The table below summarizes the sensitivity of the fair value of income-producing properties to changes in either the discount rate or terminal capitalization rate: Discount Rate Terminal Capitalization Rate Rate sensitivity Fair value Change in fair value Fair value Change in fair value +50 basis points $ 4,214,326 $ (163,297 ) $ 4,183,724 $ (193,899 ) +25 basis points 4,292,338 (85,285 ) 4,276,122 (101,501 ) Base rate 4,377,623 — 4,377,623 — -25 basis points 4,460,971 83,348 4,487,427 109,804 -50 basis points $ 4,546,335 $ 168,712 $ 4,607,420 $ 229,797 |
ASSETS HELD FOR SALE AND DISPOS
ASSETS HELD FOR SALE AND DISPOSITIONS | 12 Months Ended |
Dec. 31, 2019 | |
ASSETS HELD FOR SALE AND DISPOSITIONS | |
ASSETS HELD FOR SALE AND DISPOSITIONS | 5. ASSETS HELD FOR SALE AND DISPOSITIONS Assets Held for Sale At December 31, 2019, there are no investment properties classified as assets held for sale. At December 31, 2018, six investment properties having a fair value of $44.2 million were classified as assets held for sale and were disposed in January and February 2019. Dispositions During the year ended December 31, 2019, 13 properties located in Canada and the United States previously classified as assets held for sale were disposed. The properties consist of the following: Property Location Date disposed Sale price 3 Walker Drive Brampton, ON January 15, 2019 $ 13,380 Iowa properties (four properties): 403 S 8th Street Montezuma, IA 1951 A Avenue Victor, IA 408 N Maplewood Avenue Williamsburg, IA 411 N Maplewood Avenue Williamsburg, IA February 25, 2019 22,323 375 Edward Street Richmond Hill, ON February 27, 2019 8,050 330 Finchdene Square Toronto, ON September 20, 2019 13,150 200 Industrial Parkway Aurora, ON November 4, 2019 10,010 Michigan properties (five properties): 1800 Hayes Street Grand Haven, MI 3501 John F Donnelly Drive Holland, MI 3601 John F Donnelly Drive Holland, MI 3575 128th Avenue North Holland, MI 6151 Bancroft Avenue Alto, MI December 4, 2019 38,852 $ 105,765 The gross proceeds of $22.3 million (US$16.9 million) for the four properties in Iowa included a vendor take-back mortgage of $16.8 million (US$12.7 million). The mortgage receivable bore interest at 5.25% per annum and was repaid on June 18, 2019. The following table summarizes the fair value changes in properties classified as assets held for sale: Years ended December 31, 2019 2018 Balance, beginning of year $ 44,238 $ 391,453 Fair value gains, net 1,669 196 Foreign currency translation, net (1,262 ) (3,466 ) Disposals (105,765 ) (729,608 ) Classified as assets held for sale from investment properties (note 4) 61,120 385,671 Other — (8 ) Balance, end of year $ — $ 44,238 During the year ended December 31, 2019, Granite incurred $3.0 million (2018 — $6.9 million) of broker commissions and legal and advisory costs associated with the disposal or planned disposal of the assets held for sale which are included in loss on sale of investment properties on the combined statements of net income. The $3.0 million loss on sale of investment properties also includes a $0.4 million gain relating to the adjustment in proceeds receivable associated with the property disposal in South Carolina in 2018 (note 7). For the year ended December 31, 2018, the $6.9 million loss on sale of investment properties also included a $1.4 million loss relating to the adjustment in proceeds receivable from the disposal of two properties located in South Carolina and Tennessee in 2018. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
OTHER ASSETS | |
OTHER ASSETS | 6. OTHER ASSETS Other assets consist of: As at December 31, 2019 2018 Deferred financing costs associated with the revolving credit facility $ 885 $ 1,172 Long-term receivables 388 448 Long-term proceeds receivable associated with a property disposal (note 7) — 11,805 $ 1,273 $ 13,425 |
CURRENT ASSETS
CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
CURRENT ASSETS | |
CURRENT ASSETS | 7. CURRENT ASSETS Other Receivable As at December 31, 2019, other receivable includes $11.7 million (US$9.0 million) of proceeds receivable associated with the disposal of a property in South Carolina in September 2018 that is expected to be received in the first quarter of 2020. The estimated sale price for the property was determined using an income approach that assumed a forecast consumer price index inflation factor at the date of disposition. Accordingly, the proceeds receivable was subject to change and is dependent upon the actual consumer price index inflation factor as at December 31, 2019. At December 31, 2018, the proceeds receivable was $11.8 million (US$8.7 million) and was recorded in other assets (note 6). During the year ended December 31, 2019, the changes in the proceeds receivable are shown in the following table: Balance, December 31, 2018 $ 11,805 Change in consumer price index inflation factor 441 Foreign currency translation (596 ) Balance, December 31, 2019 $ 11,650 |
UNSECURED DEBT AND CROSS CURREN
UNSECURED DEBT AND CROSS CURRENCY INTEREST RATE SWAPS | 12 Months Ended |
Dec. 31, 2019 | |
Borrowings [abstract] | |
UNSECURED DEBT AND CROSS CURRENCY INTEREST RATE SWAPS | 8. UNSECURED DEBT AND CROSS CURRENCY INTEREST RATE SWAPS (a) Unsecured Debentures and Term Loans, Net As at December 31, 2019 2018 Maturity Date Amortized (1) Principal issued and Amortized (1) Principal issued and 2021 Debentures July 5, 2021 $ 249,646 $ 250,000 $ 249,424 $ 250,000 2023 Debentures November 30, 2023 398,746 400,000 398,425 400,000 2024 Term Loan December 19, 2024 239,153 239,816 251,853 252,414 2026 Term Loan December 11, 2026 299,449 300,000 298,712 300,000 $ 1,186,994 $ 1,189,816 $ 1,198,414 $ 1,202,414 (1) The amounts outstanding are net of deferred financing costs and, in the case of the term loans, debt modification losses. The deferred financing costs and debt modification losses are amortized using the effective interest method and are recorded in interest expense. 2021 Debentures On July 3, 2014, Granite REIT Holdings Limited Partnership (“Granite LP”), a wholly-owned subsidiary of Granite, issued at par $250.0 million aggregate principal amount of 3.788% Series 2 senior debentures due July 5, 2021 (the “2021 Debentures”). Interest on the 2021 Debentures is payable semi-annually in arrears on January 5 and July 5 of each year. Deferred financing costs of $1.6 million were incurred and recorded as a reduction against the principal owing. The 2021 Debentures are redeemable, in whole or in part, at Granite’s option at any time and from time to time, at a price equal to accrued and unpaid interest plus the greater of (a) 100% of the principal amount of the 2021 Debentures to be redeemed; and (b) the Canada Yield Price. The Canada Yield Price means, in respect of a 2021 Debenture, a price equal to which, if the 2021 Debenture were to be issued at such price on the redemption date, would provide a yield thereon from the redemption date to its maturity date equal to 46.0 basis points above the yield that a non-callable 2023 Debentures On December 20, 2016, Granite LP issued $400.0 million aggregate principal amount of 3.873% Series 3 senior debentures due November 30, 2023 (the “2023 Debentures”) at a nominal premium. Interest on the 2023 Debentures is payable semi-annually in arrears on May 30 and November 30 of each year. Deferred financing costs of $2.2 million were incurred and recorded as a reduction against the principal owing. The 2023 Debentures are redeemable, in whole or in part, at Granite’s option at any time and from time to time, at a price equal to accrued and unpaid interest plus the greater of (a) 100% of the principal amount of the 2023 Debentures to be redeemed; and (b) the Canada Yield Price. The Canada Yield Price means, in respect of a 2023 Debenture, a price equal to which, if the 2023 Debenture were to be issued at such price on the redemption date, would provide a yield thereon from the redemption date to its maturity date equal to 62.5 basis points above the yield that a non-callable 2024 Term Loan On December 19, 2018, Granite LP entered into and fully drew down a US$185.0 million senior unsecured non-revolving re-borrowed. In conjunction with the extension, the previously existing cross currency interest rate swap associated with the term facility (the “2022 Cross Currency Interest Rate Swap”) was terminated on September 24, 2019 and blended into a new cross currency interest rate swap (note 8(b)). 2026 Term Loan On December 12, 2018, Granite LP entered into and fully drew down a $300.0 million senior unsecured non-revolving re-borrowed. In conjunction with the extension, the previously existing cross currency interest rate swap associated with the term facility (the “2025 Cross Currency Interest Rate Swap”) was settled on November 27, 2019 and a new cross currency interest rate swap was entered into (note 8(b)). The 2021 Debentures, 2023 Debentures, 2024 Term Loan and 2026 Term Loan rank pari passu with all of Granite LP’s other existing and future senior unsecured indebtedness and are guaranteed by Granite REIT and Granite GP. (b) Cross Currency Interest Rate Swaps As at December 31, 2019 2018 Financial liabilities at fair value 2021 Cross Currency Interest Rate Swap $ 3,630 $ 26,877 2023 Cross Currency Interest Rate Swap 24,298 56,922 2022 Cross Currency Interest Rate Swap — 3,826 2024 Cross Currency Interest Rate Swap 1,202 — 2025 Cross Currency Interest Rate Swap — 17,132 2026 Cross Currency Interest Rate Swap 1,235 — $ 30,365 $ 104,757 On July 3, 2014, the Trust entered into a cross currency interest rate swap (the “2021 Cross Currency Interest Rate Swap”) to exchange the 3.788% semi-annual interest payments from the 2021 Debentures for Euro denominated payments at a 2.68% fixed interest rate. In addition, under the terms of the swap, the Trust will pay principal proceeds of € On December 20, 2016, the Trust entered into a cross currency interest rate swap (the “2023 Cross Currency Interest Rate Swap”) to exchange the 3.873% semi-annual interest payments from the 2023 Debentures for Euro denominated payments at a 2.43% fixed interest rate. In addition, under the terms of the swap, the Trust will pay principal proceeds of € On December 19, 2018, the Trust entered into the 2022 Cross Currency Interest Rate Swap to exchange the LIBOR plus margin monthly interest payments from the term loan that originally matured in 2022 for Euro denominated payments at a 1.225% fixed interest rate. In anticipation of the term loan extension on October 10, 2019, the 2022 Cross Currency Interest Rate Swap was terminated on September 24, 2019 and blended into a new cross currency interest rate swap (the “2024 Cross Currency Interest Rate Swap”). The 2024 Cross Currency Interest Rate Swap exchanges the LIBOR plus margin monthly interest payments from the 2024 Term Loan for Euro denominated payments at a 0.522% fixed interest rate. In addition, under the terms of the 2024 Cross Currency Interest Rate Swap, Granite will pay principal proceeds of € On December 12, 2018, the Trust entered into the 2025 Cross Currency Interest Rate Swap to exchange the CDOR plus margin monthly interest payments from the term loan that originally matured in 2025 for Euro denominated payments at a 2.202% fixed interest rate. As a result of the term loan extension on November 27, 2019, the 2025 Cross Currency Interest Rate Swap was settled for $6.8 million and a new cross currency interest rate swap was entered into (the “2026 Cross Currency Interest Rate Swap”). The 2026 Cross Currency Interest Rate Swap exchanges the CDOR plus margin monthly interest payments from the 2026 Term Loan for Euro denominated payments at a 1.355% fixed interest rate. In addition, under the terms of the swap, the Trust will pay principal proceeds of € The cross currency interest rate swaps are designated as net investment hedges of the Trust’s investment in foreign operations. The effectiveness of the hedges are assessed quarterly. As an effective hedge, the fair value gains or losses on the cross currency interest rate swaps and the foreign exchange gains or losses on the 2024 Term Loan are recognized in other comprehensive income. For the year ended December 31, 2019, the Trust has assessed the net investment hedge associated with each cross currency swap, except for the 2024 Cross Currency Interest Rate Swap, to be effective. In the year ended December 31, 2019, as a result of the refinancing of the 2024 Term Loan, the Trust de-designated The Trust has elected to record the differences resulting from the lower interest rates associated with the cross currency interest rate swaps in the combined statements of net income. |
CURRENT LIABILITIES
CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
CURRENT LIABILITIES | |
CURRENT LIABILITIES | 9. CURRENT LIABILITIES Deferred Revenue Deferred revenue relates to prepaid and unearned revenue received from tenants and fluctuates with the timing of rental receipts. Bank Indebtedness On February 1, 2018, the Trust entered into an unsecured revolving credit facility in the amount of $500.0 million that is available by way of Canadian dollar, US dollar or Euro denominated loans or letters of credit and matures on February 1, 2023. The Trust has the option to extend the maturity date by one year to February 1, 2024 subject to the agreement of lenders in respect of a minimum of 66 2/3% of the aggregate amount committed under the facility. The credit facility provides the Trust with the ability to increase the amount of the commitment by an additional aggregate principal amount of up to $100.0 million with the consent of the participating lenders. As at December 31, 2019, the Trust had no amounts (2018 — nil) drawn from the credit facility and $1.0 million (2018 — $0.1 million) in letters of credit issued against the facility. Accounts Payable and Accrued Liabilities As at December 31, 2019 2018 Accounts payable $ 6,840 $ 5,352 Accrued salaries, incentives and benefits 5,416 5,364 Accrued interest payable 6,507 6,606 Accrued construction payable 5,933 2,429 Accrued professional fees 3,822 2,910 Accrued employee unit-based compensation 5,586 3,193 Accrued trustee/director unit-based compensation 3,301 2,330 Accrued property operating costs 6,376 2,013 Accrued land transfer tax in connection with an acquisition — 5,499 Accrued leasing commissions 177 407 Accrual associated with a property disposal (note 7) 1,944 2,047 Other accrued liabilities 4,281 3,817 $ 50,183 $ 41,967 In connection with the disposal of a property in South Carolina in September 2018, Granite has retained an obligation to make certain repairs to the building. Accordingly, as at December 31, 2019, a liability of approximately $1.9 million (2018 — $2.0 million) is included in the accrual associated with a property disposal above. The estimated amount was determined using a third-party report and is expected to be settled in the first quarter of 2020 in conjunction with the proceeds receivable for this property disposal (note 7). |
DISTRIBUTIONS TO STAPLED UNITHO
DISTRIBUTIONS TO STAPLED UNITHOLDERS | 12 Months Ended |
Dec. 31, 2019 | |
DISTRIBUTIONS TO STAPLED UNITHOLDERS | |
DISTRIBUTIONS TO STAPLED UNITHOLDERS | 10. DISTRIBUTIONS TO STAPLED UNITHOLDERS Total distributions declared to stapled unitholders in the years ended December 31, 2019 and 2018 were as follows: Years ended December 31, 2019 2018 Total distributions Distributions Total distributions Distributions Monthly cash distributions declared $ 139,331 $ 2.81 $ 125,131 $ 2.73 Special distribution payable in cash — — 13,710 $ 0.30 Special distribution payable in stapled units — — 41,128 $ 0.90 $ 139,331 $ 179,969 Distributions payable at December 31, 2019 of $13.1 million (24.2 cents per stapled unit), representing the December 2019 monthly distribution, were paid on January 15, 2020. Distributions payable at December 31, 2018 of $24.3 million were paid on January 15, 2019 and represented the December 2018 monthly distributions of $10.6 million and the cash portion of a special distribution of $13.7 million. As a result of the increase in taxable income generated primarily as a result of the sale transactions in 2018, Granite’s Board of Trustees declared a special distribution in December 2018 of $1.20 per stapled unit, which comprised of 30.0 cents per unit payable in cash and 90.0 cents per unit payable by the issuance of stapled units. On January 15, 2019, immediately following the issuance of the stapled units, the stapled units were consolidated such that each unitholder held the same number of stapled units after the consolidation as each unitholder held prior to the special distribution. The special distribution declared in stapled units of $41.1 million was recorded to contributed surplus in the year ended December 2018, in accordance with IAS 32, Financial Instruments: Presentation, Subsequent to December 31, 2019, the distributions declared in January 2020 in the amount of $13.1 million or 24.2 cents per stapled unit were paid on February 14, 2020 and the distributions declared in February 2020 of $13.1 million or 24.2 cents per stapled unit will be paid on March 16, 2020. |
STAPLED UNITHOLDERS' EQUITY
STAPLED UNITHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
STAPLED UNITHOLDERS' EQUITY | |
STAPLED UNITHOLDERS' EQUITY | 11. STAPLED UNITHOLDERS’ EQUITY (a) Stapled Units The stapled units consist of one unit of Granite REIT and one common share of Granite GP. Granite REIT is authorized to issue an unlimited number of units. Granite GP’s authorized share capital consists of an unlimited number of common shares without par value. Each stapled unit is entitled to distributions and/or dividends in the case of Granite GP as and when declared and, in the event of termination of Granite REIT and Granite GP, to the net assets of Granite REIT and Granite GP remaining after satisfaction of all liabilities. (b) Unit-Based Compensation Incentive Stock Option Plan The Incentive Stock Option Plan allows for the grant of stock options or stock appreciation rights to directors, officers, employees and consultants. As at December 31, 2019 and December 31, 2018, there were no options outstanding under this plan. Director/Trustee Deferred Share Unit Plan Granite established Non-Employee non-employee A reconciliation of the changes in the notional DSUs outstanding is presented below: 2019 2018 Number Weighted Average Number Weighted Average DSUs outstanding, January 1 44 $ 46.01 28 $ 41.88 Granted 17 55.59 16 53.11 Settled (11 ) 51.57 — — DSUs outstanding, December 31 50 $ 48.01 44 $ 46.01 Executive Deferred Stapled Unit Plan The Executive Stapled Unit Plan (the “Restricted Stapled Unit Plan”) provides for the issuance of Restricted Share Units (“RSU”) and Performance Share Units (“PSU”) and is designed to provide equity-based compensation in the form of stapled units to executives and other employees (the “Participants”). The maximum number of stapled units which may be issued pursuant to the Restricted Stapled Unit Plan is 1.0 million. The Restricted Stapled Unit Plan entitles a Participant to receive a stapled unit or a cash payment equal to the market value of the stapled unit, which on any date is the volume weighted average trading price of a stapled unit on the Toronto Stock Exchange or New York Stock Exchange over the preceding five trading days. The form of redemption of the stapled units is determined by the Compensation, Governance and Nominating Committee and is not at the option of the Participant. Vesting conditions in respect of a grant are determined by the Compensation, Governance and Nominating Committee at the time the grant is made and may result in the vesting of more or less than 100% of the number of stapled units. The Restricted Stapled Unit Plan also provides for the accrual of distribution equivalent amounts based on distributions paid on the stapled units. Stapled units are, unless otherwise agreed or otherwise required by the Restricted Stapled Unit Plan, settled within 60 days following vesting. A reconciliation of the changes in stapled units outstanding under the Restricted Stapled Unit Plan is presented below: 2019 2018 Number Weighted Average Number Weighted Average Restricted stapled units outstanding, January 1 117 $ 50.34 106 $ 43.32 New grants — RSUs and PSUs (1) 85 61.90 75 53.29 Forfeited (2 ) 64.16 — — Settled in cash (35 ) 52.91 — — Settled in stapled units (20 ) 52.91 (64 ) 42.14 Restricted stapled units outstanding, December 31 (1) 145 $ 55.93 117 $ 50.34 (1) New grants include 24,587 PSUs granted during the year ended December 31, 2019 (2018 — 3,730 PSUs). Total restricted stapled units outstanding at December 31, 2019 include a total of 28,317 PSUs granted (2018 — 3,730 PSUs). The fair value of the outstanding PSUs was $1.9 million at December 31, 2019. The fair value is calculated using the Monte-Carlo simulation model based on the assumptions below as well as a market adjustment factor based on the total unitholder return of the Trust’s stapled units relative to the S&P/TSX Capped REIT Index. Grant Date January 1, August 12, September 24, 2019 and November 16, 2018 PSUs granted 28,317 Term to expiry 2.0 years Average volatility rate 15.1% Risk free interest rate 1.72% The Trust’s unit-based compensation expense recognized in general and administrative expenses was: Years ended December 31, 2019 2018 DSPs for trustees/directors (1) $ 1,645 $ 948 Restricted Stapled Unit Plan for executives and employees 5,839 2,996 Unit-based compensation expense $ 7,484 $ 3,944 Fair value remeasurement expense included in the above: • DSPs for trustees/directors $ 568 $ 122 • Restricted Stapled Unit Plan for executives and employees 1,321 378 Total fair value remeasurement expense $ 1,889 $ 500 (1) In respect of fees mandated and elected to be taken as DSUs. (c) Normal Course Issuer Bid On May 14, 2019, Granite announced the acceptance by the Toronto Stock Exchange (“TSX”) of Granite’s Notice of Intention to Make a Normal Course Issuer Bid (“NCIB”). Pursuant to the NCIB, Granite proposes to purchase through the facilities of the TSX and any alternative trading system in Canada, from time to time and if considered advisable, up to an aggregate of 4,853,666 of Granite’s issued and outstanding stapled units. The NCIB commenced on May 21, 2019 and will conclude on the earlier of the date on which purchases under the bid have been completed and May 20, 2020. Pursuant to the policies of the TSX, daily purchases made by Granite through the TSX may not exceed 41,484 stapled units, subject to certain exceptions. Granite entered into an automatic securities purchase plan with a broker in order to facilitate repurchases of the stapled units under the NCIB during specified blackout periods. Pursuant to a previous notice of intention to conduct a NCIB, Granite received approval from the TSX to purchase stapled units for the period May 18, 2018 to May 17, 2019. During the year ended December 31, 2019, Granite repurchased 700 stapled units (2018 — 1,282,171 stapled units) for consideration of less than $0.1 million (2018 — $63.5 million). The difference between the repurchase price and the average cost of the stapled units of less than $0.1 million (2018 — $5.6 million) was recorded to contributed surplus. (d) Stapled Unit Offerings On April 30, 2019, Granite completed an offering of 3,749,000 stapled units at a price of $61.50 per unit for gross proceeds of $230.6 million, including 489,000 stapled units issued pursuant to the exercise of the over-allotment option granted to the underwriters. Total costs related to the offering totaled $10.2 million and were recorded directly to stapled unitholders’ equity. On October 31, 2019, Granite completed an offering of 4,600,000 stapled units at a price of $64.00 per unit for gross proceeds of $294.4 million, including 600,000 stapled units issued pursuant to the exercise of the over-allotment option granted to the underwriters. Total costs relating to the offering totaled $12.8 million and were recorded directly to stapled unitholders’ equity. (e) Accumulated Other Comprehensive Income Accumulated other comprehensive income consists of the following: As at December 31, 2019 2018 Foreign currency translation gains on investments in subsidiaries, net of related hedging activities and non-controlling (1) $ 159,499 $ 320,158 Fair value losses on derivatives designated as net investment hedges (43,309 ) (108,706 ) $ 116,190 $ 211,452 (1) Includes foreign currency translation gains and losses from non-derivative |
RENTAL REVENUE, RECOVERIES, COS
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES | 12 Months Ended |
Dec. 31, 2019 | |
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES | |
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES | 12. RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES (a) Rental revenue consists of: Years ended December 31, 2019 2018 Base rent $ 240,345 $ 221,114 Straight-line rent amortization 5,074 4,274 Tenant incentive amortization (5,122 ) (5,402 ) Property tax recoveries 22,280 19,344 Property insurance recoveries 2,161 2,174 Operating cost recoveries 8,085 4,983 $ 272,823 $ 246,487 (b) Property operating costs consist of: Years ended December 31, 2019 2018 Non-recoverable Property taxes and utilities $ 1,096 $ 1,077 Legal 189 436 Consulting 90 123 Environmental and appraisals 511 702 Repairs and maintenance 804 725 Ground rents — 664 Other 558 730 $ 3,248 $ 4,457 Recoverable from tenants: Property taxes and utilities $ 23,784 $ 20,127 Property insurance 2,391 2,138 Repairs and maintenance 2,733 2,069 Property management fees 2,001 1,470 Other 1,207 681 $ 32,116 $ 26,485 Property operating costs $ 35,364 $ 30,942 (c) General and administrative expenses consist of: Years ended December 31, 2019 2018 Salaries, incentives and benefits $ 13,753 $ 16,030 Audit, legal and consulting 4,268 3,972 Trustee/director fees including distributions and revaluations and expenses 1,976 1,285 RSU and PSU compensation expense including distributions and revaluations 5,839 2,996 Other public entity costs 2,096 1,651 Office rents including property taxes and common area maintenance costs 379 900 Other 3,108 2,570 $ 31,419 $ 29,404 (d) Interest expense and other financing costs consist of: Years ended December 31, 2019 2018 Interest and amortized issuance costs relating to debentures and term loans $ 26,632 $ 18,544 Amortization of deferred financing costs and other interest expense and charges 2,169 3,869 Interest expense related to lease obligations (note 2(o)) 1,300 — $ 30,101 $ 22,413 Less: Capitalized interest (160 ) — $ 29,941 $ 22,413 (e) For the year ended December 31, 2018, foreign exchange gains of $9.4 million included, among other, an $8.5 million foreign exchange gain due to the remeasurement of the US dollar proceeds from the sale of three investment properties in January 2018 and a $1.4 million foreign exchange gain from the settlement of two cross currency swaps during the 2018 year for which the Trust did not employ hedge accounting. (f) Fair value (gains) losses on financial instruments consist of: Years ended December 31, 2019 2018 Foreign exchange forward contracts, net $ 8 $ 562 Losses on term loan debt modifications (note 8(a)) 752 — Cross currency interest rate swap (note 8(b)) (1,952 ) — $ (1,192 ) $ 562 For the year ended December 31, 2019, the fair value gain of $2.0 million is associated with the fair value movement of the new 2024 Cross Currency Interest Rate Swap (note 8(b)). The Trust did not employ or partially employed hedge accounting for the derivative and therefore the change in fair value is recognized in fair value (gains) losses on financial instruments in the combined statement of net income (note 8(b)). (g) During the year ended December 31, 2019, Granite incurred $2.7 million of real estate land transfer tax associated with an internal reorganization. During the year ended December 31, 2018, Granite entered into a settlement agreement related to a land use matter for a property in Ontario, Canada and was awarded a settlement amount of $2.3 million. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
INCOME TAXES | 13. INCOME TAXES (a) The major components of the income tax expense are: Years ended December 31, 2019 2018 Current income tax: Current taxes $ 6,069 $ 7,902 Current taxes referring to previous periods (1,526 ) (973 ) Withholding taxes and other 528 702 $ 5,071 $ 7,631 Deferred income tax: Origination and reversal of temporary differences $ 41,140 $ 56,423 Impact of changes in tax rates (1,678 ) (4,637 ) Benefits arising from a previously unrecognized tax loss that reduced: — Current tax expense (12 ) (6,408 ) — Deferred tax expense (285 ) (200 ) Withholding taxes on profits of subsidiaries (388 ) 85 Other (1,181 ) (243 ) $ 37,596 $ 45,020 Income tax expense $ 42,667 $ 52,651 For the year ended December 31, 2019, there was no current tax expense associated with the disposition of properties. For the year ended December 31, 2018, $0.2 million of current tax expense related to the disposition of a property in Germany. (b) The effective income tax rate reported in the combined statements of net income varies from the Canadian statutory rate for the following reasons: Years ended December 31, 2019 2018 Income before income taxes $ 424,942 $ 518,008 Expected income taxes at the Canadian statutory tax rate of 26.5% (2018 — 26.5%) $ 112,610 $ 137,272 Income distributed and taxable to unitholders (59,966 ) (81,272 ) Net foreign rate differentials (7,526 ) (7,830 ) Net change in provisions for uncertain tax positions 72 810 Net permanent differences 519 7,261 Net effect of change in tax rates (1,678 ) (4,637 ) Withholding taxes and other (1,364 ) 1,047 Income tax expense $ 42,667 $ 52,651 (c) Deferred tax assets and liabilities consist of temporary differences related to the following: As at December 31, 2019 2018 Deferred tax assets: Investment properties $ 83 $ 769 Eligible capital expenditures 2,270 2,441 Other 1,704 2,091 Deferred tax assets $ 4,057 $ 5,301 Deferred tax liabilities: Investment properties $ 323,385 $ 304,593 Withholding tax on undistributed subsidiary profits 134 682 Other (2,547 ) (1,310 ) Deferred tax liabilities $ 320,972 $ 303,965 (d) Changes in the net deferred tax liabilities consist of the following: Years ended December 31, 2019 2018 Balance, beginning of year $ 298,664 $ 238,310 Deferred tax expense recognized in net income 37,596 45,020 Foreign currency translation of deferred tax balances (19,345 ) 15,334 Net deferred tax liabilities, end of year $ 316,915 $ 298,664 (e) Net cash payments of income taxes amounted to $3.0 million for the year ended December 31, 2019 (2018 — $10.3 million) which included $0.4 million of withholding taxes paid (2018 — $0.7 million). (f) The Trust conducts operations in a number of countries with varying statutory rates of taxation. Judgment is required in the estimation of income tax expense and deferred income tax assets and liabilities in each of the Trust’s operating jurisdictions. This process involves estimating actual current tax exposure, assessing temporary differences that result from the different treatments of items for tax and accounting purposes, assessing whether it is more likely than not that deferred income tax assets will be realized and, based on all the available evidence, determining if a provision is required on all or a portion of such deferred income tax assets. The Trust reports a liability for uncertain tax positions (“unrecognized tax benefits”) taken or expected to be taken in a tax return. The Trust recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. As at December 31, 2019, the Trust had $11.4 million (2018 — $13.2 million) of unrecognized income tax benefits, including $0.3 million (2018 — $0.3 million) related to accrued interest and penalties, all of which could ultimately reduce the Trust’s effective tax rate should these tax benefits become recognized. The Trust believes that it has adequately provided for reasonably foreseeable outcomes related to tax examinations and that any resolution will not have a material effect on the combined financial position, results of operations or cash flows. However, the Trust cannot predict with any level of certainty the exact nature of any future possible outcome. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows: As at December 31, 2019 2018 Unrecognized tax benefits balance, beginning of year $ 13,197 $ 12,035 Decreases for tax positions of prior years (3,056 ) (1,183 ) Increases for tax positions of current year 2,090 1,898 Foreign currency impact (809 ) 447 Unrecognized tax benefits balance, end of year $ 11,422 $ 13,197 It is reasonably possible that the gross unrecognized tax benefits, as of December 31, 2019, could decrease in the next 12 months. The quantum of the decrease could range between a nominal amount and $2.4 million (2018 — a nominal amount and $2.8 million) and relates primarily to tax years becoming statute barred for purposes of future tax examinations by local taxing authorities and the outcome of current tax examinations. For the year ended December 31, 2019, $0.1 million of interest and penalties was recorded (2018 — $0.1 million) in income tax expense in the combined statements of net income. As at December 31, 2019, the following tax years remained subject to examination: Major Jurisdictions Canada 2013 through 2019 United States 2016 through 2019 Austria 2014 through 2019 Germany 2014 through 2019 Netherlands 2014 through 2019 As at December 31, 2019, the Trust had approximately $280.0 million of Canadian capital loss carryforwards that do not expire and other losses and deductible temporary differences in various tax jurisdictions of approximately $36.7 million. The Trust believes it is not probable that these tax assets can be realized; and accordingly, no related deferred tax asset was recognized at December 31, 2019. |
SEGMENTED DISCLOSURE INFORMATIO
SEGMENTED DISCLOSURE INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
SEGMENTED DISCLOSURE INFORMATION | |
SEGMENTED DISCLOSURE INFORMATION | 14. SEGMENTED DISCLOSURE INFORMATION The Trust has one reportable segment — the ownership and rental of industrial real estate as determined by the information reviewed by the chief operating decision maker who is the President and Chief Executive Officer. The following tables present certain information with respect to geographic segmentation: Revenue Years ended December 31, 2019 2018 Canada $ 58,952 22 % $ 54,372 22 % United States 108,065 39 % 88,006 36 % Austria 63,724 23 % 65,523 26 % Germany 26,455 10 % 24,735 10 % Netherlands 10,250 4 % 8,621 3 % Other Europe 6,232 2 % 6,226 3 % $ 273,678 100 % $ 247,483 100 % For the year ended December 31, 2019, revenue from Magna comprised approximately 47% (2018 — 61%) of the Trust’s total revenue. Investment properties As at December 31, 2019 2018 Canada $ 979,290 22 % $ 708,645 21 % United States 2,014,489 45 % 1,261,183 37 % Austria 806,355 18 % 840,803 24 % Germany 389,077 9 % 385,703 11 % Netherlands 196,701 4 % 155,778 5 % Other Europe 71,987 2 % 72,866 2 % $ 4,457,899 100 % $ 3,424,978 100 % |
DETAILS OF CASH FLOWS
DETAILS OF CASH FLOWS | 12 Months Ended |
Dec. 31, 2019 | |
DETAILS OF CASH FLOWS | |
DETAILS OF CASH FLOWS | 15. DETAILS OF CASH FLOWS (a) Items not involving operating cash flows are shown in the following table: Years ended December 31, 2019 2018 Straight-line rent amortization $ (5,074 ) $ (4,274 ) Tenant incentive amortization 5,122 5,402 Unit-based compensation expense (note 11(b)) 7,484 3,944 Fair value gains on investment properties (245,442 ) (354,707 ) Depreciation and amortization 906 300 Fair value (gains) losses on financial instruments (1,192 ) 562 Loss on sale of investment properties 3,045 6,871 Amortization of issuance costs relating to debentures and term loans 855 555 Amortization of deferred financing costs 312 497 Deferred income taxes 37,596 45,020 Other (195 ) 1,040 $ (196,583 ) $ (294,790 ) (b) Changes in working capital balances are shown in the following table: Years ended December 31, 2019 2018 Accounts receivable $ (3,670 ) $ (1,626 ) Prepaid expenses and other (906 ) (475 ) Accounts payable and accrued liabilities (639 ) 5,788 Deferred revenue 1,800 (245 ) Restricted cash 470 335 $ (2,945 ) $ 3,777 (c) Non-cash The combined statement of cash flows for the year ended December 31, 2019 does not include the right-of-use non-controlling (d) Cash and cash equivalents consist of: Years ended December 31, 2019 2018 Cash $ 248,499 $ 534,975 Short-term deposits 50,178 123,271 $ 298,677 $ 658,246 |
FAIR VALUE AND RISK MANAGEMENT
FAIR VALUE AND RISK MANAGEMENT | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE AND RISK MANAGEMENT | |
FAIR VALUE AND RISK MANAGEMENT | 16. FAIR VALUE AND RISK MANAGEMENT (a) Fair Value of Financial Instruments The following table provides the measurement basis of financial assets and liabilities as at December 31, 2019 and 2018: As at December 31, 2019 2018 Carrying Fair Carrying Fair Financial assets Construction funds in escrow $ 16,767 $ 16,767 $ — $ — Other assets 388 (1) 388 12,253 (1) 12,253 Other receivable 11,650 11,650 — — Accounts receivable 7,812 7,812 4,316 4,316 Prepaid expenses and other 120 (2) 120 111 (2) 111 Restricted cash — — 470 470 Cash and cash equivalents 298,677 298,677 658,246 658,246 $ 335,414 $ 335,414 $ 675,396 $ 675,396 Financial liabilities Unsecured debentures, net $ 648,392 $ 669,090 $ 647,849 $ 654,365 Unsecured term loans, net 538,602 538,602 550,565 550,565 Cross currency interest rate swaps 30,365 30,365 104,757 104,757 Accounts payable and accrued liabilities 50,156 50,156 41,957 41,957 Accounts payable and accrued liabilities 27 (3) 27 10 (3) 10 Distributions payable 13,081 13,081 24,357 24,357 $ 1,280,623 $ 1,301,321 $ 1,369,495 $ 1,376,011 (1) Long-term receivables included in other assets (note 6). (2) Foreign exchange forward contracts included in prepaid expenses. (3) Foreign exchange forward contracts included in accounts payable and accrued liabilities. The fair values of the Trust’s construction funds in escrow, accounts receivable, restricted cash, cash and cash equivalents, accounts payable and accrued liabilities and distributions payable approximate their carrying amounts due to the relatively short periods to maturity of these financial instruments. The fair value of the long-term receivable included in other assets approximates its carrying amount as the receivable bears interest at rates comparable to current market rates. The fair value of the other receivable associated with proceeds from a 2018 property disposal approximates its carrying amount as the amount is revalued at each reporting period. The fair values of the unsecured debentures are determined using quoted market prices. The fair values of the term loans approximate their carrying amounts as the term loans bear interest at rates comparable to the current market rates. The fair values of the cross currency interest rate swaps are determined using market inputs quoted by their counterparties. The fair value of the foreign exchange forward contracts approximate their carrying value as the asset or liability is revalued at the reporting date. The Trust periodically purchases foreign exchange forward contracts to hedge specific anticipated foreign currency transactions and to mitigate its foreign exchange exposure on its net cash flows. At December 31, 2019, the Trust held seven outstanding foreign exchange forward contracts (2018 — three contracts outstanding). The foreign exchange contracts are comprised of contracts to purchase € € (b) Fair Value Hierarchy Fair value measurements are based on inputs of observable and unobservable market data that a market participant would use in pricing an asset or liability. IFRS establishes a fair value hierarchy which is summarized below: Level 1: Fair value determined using quoted prices in active markets for identical assets or liabilities. Level 2: Fair value determined using significant observable inputs, generally either quoted prices in active markets for similar assets or liabilities or quoted prices in markets that are not active. Level 3: Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows or similar techniques. The following tables represent information related to the Trust’s assets and liabilities measured or disclosed at fair value on a recurring and non-recurring As at December 31, 2019 Level 1 Level 2 Level 3 ASSETS AND LIABILITIES MEASURED OR DISCLOSED AT FAIR VALUE Assets measured at fair value Investment properties $ — $ — $ 4,457,899 Short-term proceeds receivable associated with a property disposal included in other receivable (note 7) — — 11,650 Foreign exchange forward contracts included in prepaid expenses and other — 120 — Liabilities measured or disclosed at fair value Unsecured debentures, net 669,090 — — Unsecured term loans, net — 538,602 — Cross currency interest rate swaps — 30,365 — Foreign exchange forward contracts included in accounts payable and accrued liabilities — 27 — Net assets (liabilities) measured or disclosed at fair value $ (669,090 ) $ (568,874 ) $ 4,469,549 As at December 31, 2018 Level 1 Level 2 Level 3 ASSETS AND LIABILITIES MEASURED OR DISCLOSED AT FAIR VALUE Assets measured at fair value Investment properties $ — $ — $ 3,424,978 Assets held for sale — — 44,238 Long-term proceeds receivable associated with a property disposal included in other assets (note 6) — — 11,805 Short-term proceeds receivable associated with a property disposal included in accounts receivable — — 231 Foreign exchange forward contracts included in prepaid expenses and other — 111 — Liabilities measured or disclosed at fair value Unsecured debentures, net 654,365 — — Unsecured term loans, net — 550,565 — Cross currency interest rate swaps — 104,757 — Foreign exchange forward contracts included in accounts payable and accrued liabilities — 10 — Net assets (liabilities) measured or disclosed at fair value $ (654,365 ) $ (655,221 ) $ 3,481,252 For assets and liabilities that are measured at fair value on a recurring basis, the Trust determines whether transfers between the levels of the fair value hierarchy have occurred by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. For the years ended December 31, 2019 and 2018, there were no transfers between the levels. Refer to note 4, Investment Properties, note 5, Assets Held for Sale and Dispositions and note 7, Current Assets, for a description of the valuation technique and inputs used in the fair value measurement and for a reconciliation of the fair value measurements of investment properties, assets held for sale and proceeds receivable associated with a property disposal which are recognized in Level 3 of the fair value hierarchy. (c) Risk Management The main risks arising from the Trust’s financial instruments are credit, interest rate, foreign exchange and liquidity risks. The Trust’s approach to managing these risks is summarized below: (i) Credit risk The Trust’s financial assets that are exposed to credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash and cash equivalents include short-term investments, such as term deposits, which are invested in governments and financial institutions with a minimum credit rating of BBB (based on Standard & Poor’s (“S&P”) rating scale) or Baa1 (based on Moody’s Investor Services’ (“Moody’s”) rating scale). Concentration of credit risk is further reduced by limiting the amount that is invested in any one government or financial institution according to its credit rating. Magna accounts for approximately 47% of the Trust’s rental revenue. Although its operating subsidiaries are not individually rated, Magna International Inc. has an investment grade credit rating from Moody’s, S&P and Dominion Bond Rating Service which mitigates the Trust’s credit risk. Substantially all of the Trust’s accounts receivable are collected within 30 days. The balance of accounts receivable past due is not significant. (ii) Interest rate risk As at December 31, 2019, the Trust’s exposure to interest rate risk is limited. Approximately 55% of the Trust’s interest bearing debt consists of fixed rate debt in the form of the 2021 Debentures and the 2023 Debentures. After taking into account the related cross currency interest rate swaps, the 2021 Debentures and the 2023 Debentures have effective fixed interest rates of 2.68% and 2.43%, respectively. The remaining 45% of the Trust’s interest bearing debt consists of variable rate debt in the form of the 2024 Term Loan and 2026 Term Loan. After taking into account the related cross currency interest rate swaps, the 2024 Term Loan and 2026 Term Loan have effective fixed interest rates of 0.522% and 1.355%, respectively. (iii) Foreign exchange risk As at December 31, 2019, the Trust is exposed to foreign exchange risk primarily in respect of movements in the Euro and the US dollar. The Trust is structured such that its foreign operations are primarily conducted by entities with a functional currency which is the same as the economic environment in which the operations take place. As a result, the net income impact of currency risk associated with financial instruments is limited as its financial assets and liabilities are generally denominated in the functional currency of the subsidiary that holds the financial instrument. However, the Trust is exposed to foreign currency risk on its net investment in its foreign currency denominated operations and certain Trust level foreign currency denominated assets and liabilities. At December 31, 2019, the Trust’s foreign currency denominated net assets are $3.2 billion primarily in US dollars and Euros. A 1% change in the US dollar and Euro exchange rates relative to the Canadian dollar would result in a gain or loss of approximately $19.1 million and $12.7 million, respectively, to comprehensive income. Granite generates rental income that is not all denominated in Canadian dollars. Since the financial results are reported in Canadian dollars, the Trust is subject to foreign currency fluctuations that could, from time to time, have an impact on the operating results. For the year ended December 31, 2019, a 1% change in the US dollar and Euro exchange rates relative to the Canadian dollar would have impacted revenue by approximately $1.1 million and $1.1 million, respectively. For the year ended December 31, 2019, the Trust has designated its cross currency interest rate swaps relating to the $650.0 million of unsecured debentures and $539.8 million of unsecured term loans as hedges of its net investment in the European operations (note 8(b)). In addition, the Trust has on occasion designated its US dollar draws from the credit facility as hedges of its net investment in the US operations. (iv) Liquidity risk Liquidity risk is the risk the Trust will encounter difficulties in meeting its financial obligations as they become due. The Trust may also be subject to the risks associated with debt financing, including the risks that the unsecured debentures, term loans and credit facility may not be able to be refinanced. The Trust’s objectives in minimizing liquidity risk are to maintain prudent levels of leverage on its investment properties, staggering its debt maturity profile and maintaining an investment grade credit rating. In addition, the Declaration of Trust establishes certain debt ratio limits. The estimated contractual maturities of the Trust’s financial liabilities are summarized below: Payments due by year As at December 31, 2019 Total 2020 2021 2022 2023 2024 Thereafter Unsecured debentures $ 650,000 $ — $ 250,000 $ — $ 400,000 $ — $ — Unsecured term loans 539,816 — — — — 239,816 300,000 Cross currency interest rate swaps 30,365 — 3,630 — 24,298 1,202 1,235 Interest payments (1) Unsecured debentures, net of cross currency interest rate swap savings 53,476 16,741 16,741 9,997 9,997 — — Unsecured term loans, net of cross currency interest rate swap savings 34,939 5,360 5,360 5,360 5,360 5,360 8,139 Accounts payable and accrued liabilities 50,183 48,075 1,482 626 — — — Distributions payable 13,081 13,081 — — — — — $ 1,371,860 $ 83,257 $ 277,213 $ 15,983 $ 439,655 $ 246,378 $ 309,374 (1) Represents aggregate interest expense expected to be paid over the term of the debt, on an undiscounted basis, based on actual current interest rates and average foreign exchange rates. |
CAPITAL MANAGEMENT
CAPITAL MANAGEMENT | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of objectives, policies and processes for managing capital [abstract] | |
CAPITAL MANAGEMENT | 17. CAPITAL MANAGEMENT The Trust’s capital structure comprises the total of the stapled unitholders’ equity and debt. The total managed capital of the Trust is summarized below: As at December 31, 2019 2018 Unsecured debentures, net $ 648,392 $ 647,849 Unsecured term loans, net 538,602 550,565 Cross currency interest rate swaps 30,365 104,757 Total debt 1,217,359 1,303,171 Stapled unitholders’ equity 3,146,143 2,495,518 Total managed capital $ 4,363,502 $ 3,798,689 The Trust manages, monitors and adjusts its capital balances in response to the availability of capital, economic conditions and investment opportunities with the following objectives in mind: • Compliance with investment and debt restrictions pursuant to the Amended and Restated Declaration of Trust; • Compliance with existing debt covenants; • Maintaining investment grade credit ratings; • Supporting the Trust’s business strategies including ongoing operations, property development and acquisitions; • Generating stable and growing cash distributions; and • Building long-term unitholder value. The Amended and Restated Declaration of Trust contains certain provisions with respect to capital management which include: • The Trust shall not incur or assume any indebtedness if, after giving effect to the incurring or assumption of the indebtedness, the total indebtedness of the Trust would be more than 65% of the Gross Book Value (as defined in the Amended and Restated Declaration of Trust); and • The Trust shall not invest in raw land for development, except for (i) existing properties with additional development, (ii) the purpose of renovating or expanding existing properties or (iii) the development of new properties, provided that the aggregate cost of the investments of the Trust in raw land, after giving effect to the proposed investment, will not exceed 15% of Gross Book Value. At December 31, 2019, the Trust’s combined debt consists of the unsecured debentures, the term loans and the credit facility when drawn, each of which have various financial covenants. These covenants are defined within the trust indenture, the term loan agreements and the credit facility agreement and, depending on the debt instrument, include a total indebtedness ratio, a secured indebtedness ratio, an interest coverage ratio, an unencumbered asset ratio and a minimum equity threshold. The Trust monitors these provisions and covenants and was in compliance with their respective requirements as at December 31, 2019 and 2018. Distributions are made at the discretion of the Board of Trustees (the “Board”) and Granite REIT intends to distribute each year all of its taxable income pursuant to its Amended and Restated Declaration of Trust as calculated in accordance with the Income Tax Act. For fiscal year 2019, the Trust declared a monthly distribution of $0.233 per stapled unit from January to November and a monthly distribution of $0.242 per stapled unit for the month of December. The Board determines monthly distribution levels having considered, among other factors, estimated 2019 and 2020 cash generated from operations and capital requirements, the alignment of its current and targeted payout ratios with the Trust’s strategic objectives and compliance with the above noted provisions and financial covenants. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 18. RELATED PARTY TRANSACTIONS For the year ended December 31, 2019, key management personnel include the Trustees/Directors, the President and Chief Executive Officer, the current Chief Financial Officer, the former Chief Financial Officer and the Executive Vice President, Head of Global Real Estate. For the year ended December 31, 2018, key management personnel included the Trustees/Directors, the current President and Chief Executive Officer, the former Chief Executive Officer, the former Chief Operating Officer, the former Chief Financial Officer and the Executive Vice President, Head of Global Real Estate. Information with respect to the Trustees’/Directors’ fees is included in notes 11(b) and 12(c). The compensation expense associated with the Trust’s key management personnel was as follows: Years ended December 31, 2019 2018 Salaries, incentives and short-term benefits $ 5 , $ 6,057 Unit-based compensation expense including fair value adjustments 3,980 2,380 $ 9,533 $ 8,437 Accounts payable and accrued liabilities at December 31, 2019 includes $1.1 million of compensation owing to the former Chief Financial Officer (2018 — $0.4 million of compensation owing to the former Chief Executive Officer). |
COMBINED FINANCIAL INFORMATION
COMBINED FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
COMBINED FINANCIAL INFORMATION | |
COMBINED FINANCIAL INFORMATION | 19. COMBINED FINANCIAL INFORMATION The combined financial statements include the financial position and results of operations and cash flows of each of Granite REIT and Granite Balance Sheet As at December 31, 2019 Granite REIT Granite GP Eliminations/ Granite REIT and ASSETS Non-current Investment properties $ 4,457,899 $ 4,457,899 Investment in Granite LP (1) — 21 (21 ) — Other non-current 24,216 24,216 4,482,115 21 (21 ) 4,482,115 Current assets: Other current assets 23,144 20 23,164 Intercompany receivable (2) — 11,828 (11,828 ) — Cash and cash equivalents 298,385 292 298,677 Total assets $ 4,803,644 12,161 (11,849 ) $ 4,803,956 LIABILITIES AND EQUITY Non-current Unsecured debt, net $ 1,186,994 $ 1,186,994 Other non-current 383,763 383,763 1,570,757 1,570,757 Current liabilities: Intercompany payable (2) 11,828 (11,828 ) — Other current liabilities 72,949 12,140 85,089 Total liabilities 1,655,534 12,140 (11,828 ) 1,655,846 Equity: Stapled unitholders’ equity 3,146,122 21 3,146,143 Non-controlling 1,988 (21 ) 1,967 Total liabilities and equity $ 4,803,644 12,161 (11,849 ) $ 4,803,956 (1) Granite LP is 100% owned by Granite REIT and Granite GP. (2) Represents employee and trustee/director compensation related amounts which will be reimbursed by Granite LP. Balance Sheet As at December 31, 2018 Granite REIT Granite GP Eliminations/ Granite REIT and ASSETS Non-current Investment properties $ 3,424,978 $ 3,424,978 Investment in Granite LP (1) — 17 (17 ) — Other non-current 53,785 53,785 3,478,763 17 (17 ) 3,478,763 Current assets: Assets held for sale 44,238 44,238 Other current assets 7,462 46 7,508 Intercompany receivable (2) — 7,130 (7,130 ) — Cash and cash equivalents 657,432 814 658,246 Total assets $ 4,187,895 8,007 (7,147 ) $ 4,188,755 LIABILITIES AND EQUITY Non-current Unsecured debt, net $ 1,198,414 $ 1,198,414 Other non-current 408,722 408,722 1,607,136 1,607,136 Current liabilities: Intercompany payable (2) 7,130 (7,130 ) — Other current liabilities 76,644 7,990 84,634 Total liabilities 1,690,910 7,990 (7,130 ) 1,691,770 Equity: Stapled unitholders’ equity 2,495,501 17 2,495,518 Non-controlling 1,484 (17 ) 1,467 Total liabilities and equity $ 4,187,895 8,007 (7,147 ) $ 4,188,755 (1) Granite LP is 100% owned by Granite REIT and Granite GP. (2) Represents employee and trustee/director compensation related amounts which will be reimbursed by Granite LP. Income Statement Year ended December 31, 2019 Granite REIT Granite GP Eliminations/ Granite REIT and Revenue $ 273,678 $ 273,678 General and administrative expenses 31,419 31,419 Interest expense and other financing costs 29,941 29,941 Other costs and expenses, net 30,965 30,965 Share of (income) loss of Granite LP — (4 ) 4 — Fair value gains on investment properties, net (245,442 ) (245,442 ) Fair value gains on financial instruments (1,192 ) (1,192 ) Loss on sale of investment properties 3,045 3,045 Income before income taxes 424,942 4 (4 ) 424,942 Income tax expense 42,667 42,667 Net income 382,275 4 (4 ) 382,275 Less net income attributable to non-controlling 200 (4 ) 196 Net income attributable to stapled unitholders $ 382,075 4 — $ 382,079 Income Statement Year ended December 31, 2018 Granite REIT Granite GP Eliminations/ Granite REIT and Revenue $ 247,483 $ 247,483 General and administrative expenses 29,404 29,404 Interest expense and other financing costs 22,413 22,413 Other costs and expenses, net 16,964 16,964 Share of (income) loss of Granite LP — (5 ) 5 — Fair value gains on investment properties, net (354,707 ) (354,707 ) Fair value loss on financial instruments 562 562 Acquisition transaction costs 7,968 7,968 Loss on sale of investment properties 6,871 6,871 Income before income taxes 518,008 5 (5 ) 518,008 Income tax expense 52,651 52,651 Net income 465,357 5 (5 ) 465,357 Less net income attributable to non-controlling 206 (5 ) 201 Net income attributable to stapled unitholders $ 465,151 5 — $ 465,156 Statement of Cash Flows Year ended December 31, 2019 Granite REIT Granite GP Eliminations/ Granite REIT and OPERATING ACTIVITIES Net income $ 382,275 4 (4 ) $ 382,275 Items not involving operating cash flows (196,583 ) (4 ) 4 (196,583 ) Changes in working capital balances (2,423 ) (522 ) (2,945 ) Other operating activities 684 684 Cash provided by operating activities 183,953 (522 ) — 183,431 INVESTING ACTIVITIES Property acquisitions (930,878 ) (930,878 ) Proceeds from disposals, net 85,536 85,536 Investment property capital additions — Maintenance or improvements (2,889 ) (2,889 ) — Developments or expansions (27,407 ) (27,407 ) Other investing activities (456 ) (456 ) Cash used in investing activities (876,094 ) — — (876,094 ) FINANCING ACTIVITIES Distributions paid (136,897 ) (136,897 ) Other financing activities 480,422 480,422 Cash provided by financing activities 343,525 — — 343,525 Effect of exchange rate changes (10,431 ) (10,431 ) Net decrease in cash and cash equivalents during the year $ (359,047 ) (522 ) — $ (359,569 ) Statement of Cash Flows Year ended December 31, 2018 Granite REIT Granite GP Eliminations/ Adjustments Granite REIT and OPERATING ACTIVITIES Net income $ 465,357 5 (5 ) $ 465,357 Items not involving operating cash flows (294,790 ) (5 ) 5 (294,790 ) Changes in working capital balances 3,410 367 3,777 Other operating activities (16,456 ) (16,456 ) Cash provided by operating activities 157,521 367 — 157,888 INVESTING ACTIVITIES Property acquisitions (549,120 ) (549,120 ) Proceeds from disposals, net 681,319 681,319 Investment property capital additions — Maintenance or improvements (17,799 ) (17,799 ) — Developments or expansions (15,378 ) (15,378 ) Acquisition deposits (33,086 ) (33,086 ) Other investing activities 29,925 29,925 Cash provided by investing activities 95,861 — — 95,861 FINANCING ACTIVITIES Distributions paid (125,131 ) (125,131 ) Other financing activities 449,314 449,314 Cash provided by financing activities 324,183 — — 324,183 Effect of exchange rate changes 11,295 11,295 Net increase in cash and cash equivalents during the year $ 588,860 367 — $ 589,227 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 20. COMMITMENTS AND CONTINGENCIES (a) The Trust is subject to various legal proceedings and claims that arise in the ordinary course of business. Management evaluates all claims with the advice of legal counsel. Management believes these claims are generally covered by Granite’s insurance policies and that any liability from remaining claims is not probable to occur and would not have a material adverse effect on the combined financial statements. However, actual outcomes may differ from management’s expectations. (b) At December 31, 2019, the Trust’s contractual commitments related to construction and development projects, amounted to approximately $63.8 million. In addition, Granite has agreed to acquire three state-of-the € The Trust is involved, in the normal course of business, in discussions, and has various letters of intent or conditional agreements, with respect to possible acquisitions of new properties and dispositions of existing properties in its portfolio. None of these commitments or contingencies, individually or in aggregate, would have a material impact on the combined financial statements. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Statement of Compliance | (a) Basis of Presentation and Statement of Compliance The combined financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). |
Combined Financial Statements and Basis of Consolidation | (b) Combined Financial Statements and Basis of Consolidation As a result of the REIT conversion described in note 1, the Trust does not have a single parent; however, each unit of Granite REIT and each share of Granite GP trade as a single stapled unit and accordingly, Granite REIT and Granite GP have identical ownership. Therefore, these financial statements have been prepared on a combined basis whereby the assets, liabilities and results of Granite GP and Granite REIT have been combined. The combined financial statements include the subsidiaries of Granite GP and Granite REIT. Subsidiaries are fully consolidated by Granite GP or Granite REIT from the date of acquisition, being the date on which control is obtained. The subsidiaries continue to be consolidated until the date that such control ceases. Control exists when Granite GP or Granite REIT have power, exposure or rights to variable returns and the ability to use their power over the entity to affect the amount of returns it generates. All intercompany balances, income and expenses and unrealized gains and losses resulting from intercompany transactions are eliminated. |
Trust Units | (c) Trust Units The stapled units are redeemable at the option of the holder and, therefore, are required to be accounted for as financial liabilities, except where certain exemption conditions are met, in which case redeemable instruments may be classified as equity. The attributes of the stapled units meet the exemption conditions set out in IAS 32, Financial Instruments: Presentation |
Investment Properties | (d) Investment Properties The Trust accounts for its investment properties, which include income-producing properties, properties under development and land held for development, in accordance with IAS 40, Investment Property Income-Producing Properties The carrying value of income-producing properties includes the impact of straight-line rental revenue (note 2(k)), tenant incentives and deferred leasing costs since these amounts are incorporated in the determination of the fair value of income-producing properties. When an income-producing property is disposed of, the gain or loss is determined as the difference between the disposal proceeds, net of selling costs, and the carrying amount of the property and is recognized in net income in the period of disposal. Properties Under Development The Trust’s development properties are classified as such until the property is substantially completed and available for occupancy. The initial cost of properties under development includes the acquisition cost of the land and direct development or expansion costs, including construction costs, borrowing costs and indirect costs wholly attributable to development. Borrowing costs are capitalized to projects under development or construction based on the average accumulated expenditures outstanding during the period multiplied by the Trust’s average borrowing rate on existing debt. Where borrowings are associated with specific developments, the amount capitalized is the gross borrowing cost incurred on such borrowings less any investment income arising on temporary investment of these borrowings. The capitalization of borrowing costs is suspended if there are prolonged periods that development activity is interrupted. The Trust capitalizes direct and indirect costs, including property taxes and insurance of the development property, if activities necessary to ready the development property for its intended use are in progress. Costs of internal personnel and other indirect costs that are wholly attributable to a project are capitalized as incurred. If considered reliably measurable, properties under development are carried at fair value. Properties under development are measured at cost if fair value is not reliably measurable. In determining the fair value of properties under development consideration is given to, among other things, remaining construction costs, development risk, the stage of project completion and the reliability of cash inflows after project completion. |
Business Combinations | (e) Business Combinations The Trust accounts for property acquisitions as a business combination if the particular assets and set of activities acquired can be operated and managed as a business in their current state for the purpose of providing a return to the unitholders. The Trust applies the acquisition method to account for business combinations. The consideration transferred for a business combination is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Trust. The total consideration includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired as well as liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date. The Trust recognizes any non-controlling acquisition-by-acquisition non-controlling Acquisition related costs are expensed as incurred. Any contingent consideration is recognized at fair value at the acquisition date. Subsequent changes to the fair value of contingent consideration that is recorded as an asset or liability is recognized in net income. Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling |
Assets Held for Sale | (f) Assets Held for Sale Non-current |
Foreign Currency Translation | (g) Foreign Currency Translation The assets and liabilities of the Trust’s foreign operations are translated into Canadian dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case, for material transactions, the exchange rates at the dates of those transactions are used. Exchange differences arising are recognized in other comprehensive income and accumulated in equity. In preparing the financial statements of each entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the average rates of exchange prevailing in the period. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary Non-monetary • The effective portion of exchange differences on transactions entered into in order to hedge certain foreign currency risks are recognized in other comprehensive income; • Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation) are recognized in other comprehensive income; and • Exchange differences on foreign currency borrowings related to capitalized interest for assets under construction are recognized in investment properties. |
Financial Instruments and Hedging | (h) Financial Instruments and Hedging Financial Assets and Financial Liabilities The following summarizes the Trust’s classification and measurement basis of its financial assets and liabilities: Classification and Financial assets Construction funds in escrow Amortized Cost Long-term receivables included in other assets Amortized Cost Other receivable (proceeds receivable associated with a property disposal) Fair Value Accounts receivable Amortized Cost Foreign exchange forward contracts included in prepaid expenses and other Fair Value Restricted cash Amortized Cost Cash and cash equivalents Amortized Cost Financial liabilities Unsecured debentures, net Amortized Cost Unsecured term loans, net Amortized Cost Cross currency interest rate swaps Fair Value Accounts payable and accrued liabilities Amortized Cost Foreign exchange forward contracts included in accounts payable and accrued liabilities Fair Value Distributions payable Amortized Cost The Trust recognizes an allowance for expected credit losses (“ECL”) for financial assets measured at amortized cost. The impact of the credit loss modeling process is summarized as follow: • The Trust did not record an ECL allowance against long-term receivables as historical experience of loss on these balances is insignificant and, based on the assessment of forward-looking information, no significant increases in losses are expected. The Trust will continue to assess the valuation of these instruments. • The Trust did not record an ECL allowance against accounts receivable and has determined that its internal processes of evaluating each receivable on a specific basis for collectability using historical experience and adjusted for forward-looking information, would appropriately allow the Trust to determine if there are significant increases in credit risk to then record a corresponding ECL allowance. For financial liabilities measured at amortized cost, the liability is amortized using the effective interest rate method. Under the effective interest rate method, any transaction fees, costs, discounts and premiums directly related to the financial liabilities are recognized in net income over the expected life of the obligation. In regards to term modifications for financial liabilities, when a financial liability measured at amortized cost is modified or exchanged, and such modification or exchange does not result in derecognition, the adjustment to the amortized cost of the financial liability as a result of the modification or exchange is recognized in net income. Derivatives and Hedging Derivative instruments, such as the cross currency interest rate swaps and the foreign exchange forward contracts, are recorded in the combined balance sheet at fair value, including those derivatives that are embedded in financial or non-financial The Trust applies hedge accounting to certain derivative and non-derivative |
Cash and Cash Equivalents and Restricted Cash | (i) Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents include cash and short-term investments with original maturities of three months or less. Restricted cash represents segregated cash accounts for a specific purpose and cannot be used for general corporate purposes. |
Fixed Assets | (j) Fixed Assets Fixed assets include computer hardware and software, furniture and fixtures and leasehold improvements, which are recorded at cost less accumulated depreciation. Depreciation expense is recorded on a straight-line basis over the estimated useful lives of the fixed assets, which typically range from 3 to 5 years for computer hardware and software and 5 to 7 years for other furniture and fixtures. Leasehold improvements are amortized over the term of the applicable lease. Fixed assets also include right-of-use Leases right-of-use |
Revenue Recognition | (k) Revenue Recognition Where Granite has retained substantially all the benefits and risks of ownership of its rental properties, leases with its tenants are accounted for as operating leases. Where substantially all the benefits and risks of ownership of the Trust’s rental properties have been transferred to its tenants, the Trust’s leases are accounted for as finance leases. All of the Trust’s current leases are operating leases. Revenue from investment properties include base rents earned from tenants under lease agreements, property tax and operating cost recoveries and other incidental income. Rents from tenants may contain rent escalation clauses or free rent periods which are recognized in revenue on a straight-line basis over the term of the lease. The difference between the revenue recognized and the contractual rent is included in investment properties as straight-line rents receivable. In addition, tenant incentives including cash allowances provided to tenants are recognized as a reduction in rental revenue on a straight-line basis over the term of the lease where it is determined that the tenant fixturing has no benefit to the property beyond the existing tenancy. Property tax and operating cost recoveries from tenants are recognized as revenue in the period in which applicable costs are incurred. |
Unit-Based Compensation Plans | (l) Unit-Based Compensation Plans Incentive Stock Option Plan Compensation expense for option grants is based on the fair value of the options at the grant date and is recognized over the period from the grant date to the date the award is vested. A liability is recognized for outstanding options based upon the fair value as the Trust is an open-ended trust making its units redeemable. During the period in which options are outstanding, the liability is adjusted for changes in the fair value with such adjustments being recognized as compensation expense in general and administrative expenses in the period in which they occur. The liability balance is reduced as options are exercised and recorded in equity as stapled units along with the proceeds received on exercise. Executive Deferred Stapled Unit Plan The executive deferred stapled unit plan is measured at fair value at the date of grant and amortized to compensation expense from the effective date of the grant to the final vesting date. Compensation expense is recognized on a proportionate basis consistent with the vesting features of each tranche of the grant. Compensation expense for executive deferred stapled units granted under the plan is recognized in general and administrative expenses with a corresponding liability recognized based upon the fair value of the Trust’s stapled units as the Trust is an open-ended trust making its units redeemable. During the period in which the executive deferred stapled units are outstanding, for grants with no performance criteria, the liability is adjusted for changes in the market value of the Trust’s stapled unit, and for grants with performance criteria the liability is measured at fair value using the Monte Carlo simulation model (note 11), with both such adjustments being recognized as compensation expense in general and administrative expenses in the period in which they occur. The liability balance is reduced as deferred stapled units are settled for stapled units and recorded in equity. Director/Trustee Deferred Share Unit Plan The compensation expense and a corresponding liability associated with the director/trustee deferred share unit plan is measured based on the market value of the underlying stapled units. During the period in which the awards are outstanding, the liability is adjusted for changes in the market value of the underlying stapled unit, with such positive or negative adjustments being recognized in general and administrative expenses in the period in which they occur. The liability balance is settled for cash when a director/trustee ceases to be a member of the Board. |
Income Taxes | (m) Income Taxes Operations in Canada Granite qualifies as a mutual fund trust under the Income Tax Act (Canada) (the “Act”) and as such the Trust itself will not be subject to income taxes provided it continues to qualify as a REIT for purposes of the Act. A REIT is not taxable and not considered to be a Specified Investment Flow-through Trust provided it complies with certain tests and it distributes all of its taxable income in a taxation year to its unitholders. The Trust’s qualification as a REIT results in no current or deferred income tax being recognized in the combined financial statements for income taxes related to the Canadian investment properties. Operations in the United States The Trust’s investment property operations in the United States are conducted in a qualifying United States REIT (“US REIT”) for purposes of the Internal Revenue Code of 1986, as amended. As a qualifying US REIT, it is not taxable provided it complies with certain tests in addition to the requirement to distribute substantially all of its taxable income. As a qualifying US REIT, current income taxes on U.S. taxable income have not been recorded in the combined financial statements. However, the Trust has recorded deferred income taxes that may arise on the disposition of its investment properties as the Trust will likely be subject to entity level income tax in connection with such transactions pursuant to the Foreign Investment in Real Property Tax Act. Operations in Europe The Trust consolidates certain entities that continue to be subject to income tax. Income taxes for taxable entities in Europe, as well as other entities in Canada or the United States subject to tax, are recorded as follows: Current Income Tax The current income tax expense is determined on the basis of enacted or substantively enacted tax rates and laws at each balance sheet date. Deferred Income Tax Deferred income tax is recorded, using the liability method, on temporary differences arising between the tax basis of assets and liabilities and the amounts reported on the combined financial statements. Deferred income tax assets and liabilities are measured at tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred income tax assets are recognized to the extent that it is probable that deductions, tax credits or tax losses will be utilized. Each of the current and deferred tax assets and liabilities are offset when they are levied by the same taxation authority in either the same taxable entity or different taxable entities within the same reporting group that settle on a net basis. |
Significant Accounting Judgments, Estimates and Assumptions | (n) Significant Accounting Judgments, Estimates and Assumptions The preparation of the combined financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts and disclosures made in the financial statements and accompanying notes. Management believes that the judgments, estimates and assumptions utilized in preparing the combined financial statements are reasonable and prudent; however, actual results could be materially different and require an adjustment to the reported results. Judgments The following are the critical judgments that have been made in applying the Trust’s accounting policies and that have the most significant effect on the amounts recognized in the combined financial statements: (i) Leases The Trust’s policy for revenue recognition is described in note 2(k). The Trust makes judgments in determining whether certain leases are operating or finance leases, in particular tenant leases with long contractual terms or leases where the property is a large square-footage and/or architecturally specialized. (ii) Investment properties The Trust’s policy relating to investment properties is described in note 2(d). In applying this policy, judgment is used in determining whether certain costs incurred for tenant improvements are additions to the carrying amount of the property or represent incentives, identifying the point at which practical completion of properties under development occurs and determining borrowing costs to be capitalized to the carrying value of properties under development. Judgment is also applied in determining the use, extent and frequency of independent appraisals. (iii) Income taxes The Trust applies judgment in determining whether it will continue to qualify as a REIT for both Canadian and U.S. tax purposes for the foreseeable future. However, should it at some point no longer qualify, it would be subject to income tax and would be required to recognize current and deferred income taxes. Estimates and Assumptions The key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities include the following: (i) Valuation of investment properties The fair value of investment properties is determined by management using primarily the discounted cash flow method in which the income and expenses are projected over the anticipated term of the investment plus a terminal value discounted using an appropriate discount rate. The Trust obtains, from time to time, appraisals from independent qualified real estate valuation experts. However, the Trust does not measure its investment properties based on these appraisals but uses them as data points, together with other external market information accumulated by management, in arriving at its own conclusions on values. Management uses valuation assumptions such as discount rates, terminal capitalization rates and market rental rates applied in external appraisals or sourced from valuation experts; however, the Trust also uses its historical renewal experience with tenants, its direct knowledge of the specialized nature of certain of Granite’s portfolio and tenant profile and the actual condition of the properties in making business judgments about lease renewal probabilities, renewal rents and capital expenditures. The critical assumptions relating to the Trust’s estimates of fair values of investment properties include the receipt of contractual rents, contractual renewal terms, expected future market rental rates, discount rates that reflect current market uncertainties, capitalization rates and recent investment property prices. If there is any change in these assumptions or regional, national or international economic conditions, the fair value of investment properties may change materially. Refer to note 4 for further information on the estimates and assumptions made by management. (ii) Fair value of financial instruments Where the fair value of financial assets or liabilities recorded on the balance sheet or disclosed in the notes cannot be derived from active markets, they are determined using valuation techniques including the discounted cash flow method. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as credit risk and volatility. Changes in assumptions about these factors could materially affect the reported fair value of financial instruments. (iii) Income taxes The Trust operates in a number of countries and is subject to the income tax laws and related tax treaties in each of its operating jurisdictions. These laws and treaties can be subject to different interpretations by relevant taxation authorities. Significant judgment is required in the estimation of Granite’s income tax expense, the interpretation and application of the relevant tax laws and treaties and the provision for any exposure that may arise from tax positions that are under audit by relevant taxation authorities. The recognition and measurement of deferred tax assets or liabilities is dependent on management’s estimate of future taxable profits and income tax rates that are expected to be in effect in the period the asset is realized or the liability is settled. Any changes in management’s estimate can result in changes in deferred tax assets or liabilities as reported in the combined balance sheets and also the deferred income tax expense in the combined statements of net income. |
Accounting Standards Adopted in 2019 | (o) Accounting Standards Adopted in 2019 The Trust applied new standards and interpretations in the annual combined financial statements for the year ended December 31, 2019. The nature and effect of the changes are disclosed below. Amendments to IFRS 3, Business Combinations The Trust adopted the amendments to IFRS 3, Business Combinations Following the adoption of the IFRS 3 Amendments, the Trust continues to account for business combinations in which control is acquired under the acquisition method. When a property acquisition is made, the Trust considers the inputs, processes and outputs of the acquiree in assessing whether it meets the definition of a business. When the acquired set of activities and assets lack a substantive process in place and will be integrated into the Trust’s existing operations, the acquisition does not meet the definition of a business and is accounted for as an asset acquisition. An asset acquisition is accounted for as an acquisition of a group of assets and liabilities. The cost of the acquisition, including transaction costs, is allocated to the assets and liabilities acquired based on their relative fair values, and no goodwill or deferred tax is recognized. Subsequently, where the acquired asset represents an investment property, it is measured at fair value in accordance with IAS 40, Investment Property As a result of the adoption of the IFRS 3 Amendments, Granite’s income-producing property acquisitions are considered asset acquisitions rather than business combinations. Accordingly, for the year ended December 31, 2019, acquisition transaction costs of $3.6 million were first capitalized to the cost of the property and then expensed to net fair value gains/losses on investment properties as a result of measuring the property at fair value instead of directly expensing these amounts to acquisition transaction costs in the combined statements of net income. There was no significant impact to net income, unitholders’ equity or cash flows from the adoption of the IFRS 3 Amendments as at December 31, 2019 and for the year then ended. For the year ended December 31, 2018, the income-producing properties acquired in the year were accounted as business combinations in accordance with the accounting policy followed by the Trust at that time and prior to the adoption and prospective application of the IFRS 3 Amendments effective January 1, 2019. IFRS 16, Leases In January 2016, the IASB issued IFRS 16, Leases Leases on-balance The Trust has applied IFRS 16 using the modified retrospective approach, and therefore the cumulative effect of initial application is recognized in retained earnings at January 1, 2019. Accordingly, the comparative information presented for 2018 has not been restated. As a lessee Definition of a lease Previously, the Trust determined at contract inception whether an arrangement was or contained a lease under IAS 17. The Trust now assesses whether a contract is or contains a lease based on the new definition of a lease. Under IFRS 16, a contract is or contains a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. On transition to IFRS 16, the Trust applied IFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as leases under IAS 17 and associated interpretative guidance were not reassessed as the practical expedient offered under the standard was applied. Therefore, the new definition of a lease under IFRS 16 has been applied only to contracts entered into or changed on or after January 1, 2019. In accordance with IFRS 16, at inception or on modification of a contract that contains a lease component, the Trust allocates the consideration in the contract to each lease and non-lease Accounting policy The Trust recognizes a right-of-use right-of-use right-of-use right-of-use right-of-use The lease liability is initially measured at the present value of the lease payments at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, at the Trust’s incremental borrowing rate. Generally, the Trust uses its incremental borrowing rate as the discount rate. The Trust presents lease liabilities in “lease obligations” on the combined balance sheet. The lease obligation is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee or, as appropriate, a change in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. The Trust has applied judgment to determine the lease term for some lease contracts in which it is a lessee that include renewal or termination options. The assessment of whether the Trust is reasonably certain to exercise such options impacts the lease term which, in turn, significantly affects the amount of lease obligations and right-of-use Transition In accordance with IFRS 16, the Trust recognized right-of-use low-value right-of-use low-value The Trust leases assets related to ground leases, office space and equipment. Lease obligations were measured at the present value of the remaining lease payments, discounted at the Trust’s incremental borrowing rate as at January 1, 2019. Right-of-use • Their carrying amount as if IFRS 16 had been applied since the commencement date, discounted using the lessee’s incremental borrowing rate at the date of initial application; or • An amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments. The Trust recognized a right-of-use The Trust used the following additional practical expedients when applying IFRS 16 to leases previously classified as operating leases under IAS 17: • Applied the exemption not to recognize right-of-use • Applied the exemption not to allocate the consideration in a contract to each lease and non-lease • Excluded initial direct costs from measuring the right-of-use • Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease. Impact on transition As at December 31, 2019, the Trust had leases for the use of office space, office and other equipment and ground leases for the land upon which four income-producing properties in Europe and Canada are situated. In accordance with IFRS 16, the Trust recognized these operating leases as right-of-use Fixed assets Investment Lease Office Equipment Total Ground Balance at January 1, 2019 $ 1,780 $ 46 $ 1,826 $ 11,801 $ 13,627 Balance at December 31, 2019 $ 1,429 $ 102 $ 1,531 $ 31,523 $ 33,045 When measuring lease liabilities for leases that were classified as operating leases, the Trust discounted lease payments using its incremental borrowing rate at January 1, 2019. The weighted average rate applied is 4.4%. During the year ended December 31, 2019, the Trust recorded an additional right-of-use right-of-use In accordance with IFRS 16, the Trust has recognized depreciation and interest costs, instead of operating lease expense. During the year ended December 31, 2019, the Trust recognized $0.6 million of depreciation and amortization expense, and $1.3 million of interest expense from these leases. No depreciation is recognized for the right-of-use Future minimum lease payments relating to the right-of-use 2020 $ 619 2021 719 2022 417 2023 137 2024 119 2025 and thereafter 31,034 $ 33,045 The lease commitments as at December 31, 2018 comprised $27.2 million related to two ground leases in Europe with annual payments of $0.5 million and $0.1 million expiring in 2049 and 2096, respectively, and $1.6 million related to certain other operating leases. On January 1, 2019, the Trust recognized lease obligations on the combined balance sheet of $13.6 million for these aforementioned lease commitments which include the impact from present value discounting of $15.4 million and certain other adjustments of $0.2 million. As a lessor In contrast to lessee accounting, the requirements for lessor accounting have remained largely unchanged with the distinction between operating leases and finance leases being retained. The Trust leases its investment properties, including right-of-use in-place IFRIC 23, Uncertainty Over Income Tax Treatments In June 2017, the IFRS Interpretations Committee issued IFRIC 23, Uncertainty Over Income Tax Treatments Income Taxes |
Future Accounting Policy Changes | (p) Future Accounting Policy Changes As at December 31, 2019, there are no new accounting standards issued but not yet applicable to the combined financial statements except for the following: Agenda Decision — IFRS 16, Leases In December 2019, the IFRS Interpretations Committee issued a final agenda decision in regards to the determination of the lease term for cancellable or renewable leases under IFRS 16, Leases |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of lease liability obligations | In accordance with IFRS 16, the Trust recognized these operating leases as right-of-use Fixed assets Investment Lease Office Equipment Total Ground Balance at January 1, 2019 $ 1,780 $ 46 $ 1,826 $ 11,801 $ 13,627 Balance at December 31, 2019 $ 1,429 $ 102 $ 1,531 $ 31,523 $ 33,045 |
Schedule of future minimum lease payments | Future minimum lease payments relating to the right-of-use 2020 $ 619 2021 719 2022 417 2023 137 2024 119 2025 and thereafter 31,034 $ 33,045 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACQUISITIONS | |
Schedule of business combination, income producing properties | 2019 Acquisitions Property Location Date acquired Property Transaction costs Total Income-producing properties (1) 201 Sunridge Boulevard Wilmer, TX March 1, 2019 $ 58,087 $ 141 $ 58,228 3501 North Lancaster Hutchins Road Lancaster, TX March 1, 2019 106,120 168 106,288 2020 & 2095 Logistics Drive (2) Mississauga, ON April 9, 2019 174,106 146 174,252 1901 Beggrow Street Columbus, OH May 23, 2019 71,607 289 71,896 Heirweg 3 Born, Netherlands July 8, 2019 25,704 1,640 27,344 1222 Commerce Parkway Horn Lake, MS August 1, 2019 24,492 231 24,723 831 North Graham Road Greenwood, IN October 4, 2019 39,581 40 39,621 100 Clyde Alexander Lane (3) Pooler, GA October 18, 2019 62,657 614 63,271 1301 Chalk Hill (4) Dallas, TX November 19, 2019 269,764 247 270,011 330-366 Southaven, MS December 19, 2019 63,717 38 63,755 440-480 Southaven, MS December 19, 2019 51,643 33 51,676 $ 947,478 $ 3,587 $ 951,065 Development land: 6701, 6702 Purple Sage Road Houston, TX July 1, 2019 33,361 510 33,871 $ 980,839 $ 4,097 $ 984,936 (1) The income-producing properties acquired in 2019 have been accounted for as asset acquisitions reflecting the adoption of the IFRS 3 Amendments effective January 1, 2019 (note 2(o)). (2) Includes a right-of-use (3) The Trust acquired the leasehold interest in this property which resulted in the recognition of a right-of-use asset, including transaction costs, of $63,271. The Trust will acquire freehold title to the property on December 31, 2022. (4) Excludes cash held in escrow at December 31, 2019 to complete construction. 2018 Acquisitions Property Location Date acquired Property Income-producing properties (1) 3870 Ronald Reagan Parkway Plainfield, IN March 23, 2018 $ 50,835 181 Antrim Commons Drive Greencastle, PA April 4, 2018 44,323 Ohio portfolio (four properties): 10, 100 and 115 Enterprise Parkway West Jefferson, OH May 23, 2018 299,297 Joseph-Meyer-Straße 3 Erfurt, Germany July 12, 2018 82,677 120 Velocity Way Shepherdsville, KY December 3, 2018 65,866 542,998 Development land: Lot 18, Park 70 West Jefferson, OH November 1, 2018 1,232 $ 544,230 (1) The income-producing properties acquired in 2018 were accounted for as business combinations (note 2(o)) in accordance with the accounting policy followed by the Trust during the 2018 year and prior to the adoption and prospective application of the IFRS 3 Amendments effective January 1, 2019. |
Schedule of consideration paid for the acquisition and fair values of assets and liabilities | The following table summarizes the total consideration paid for the income-producing property acquisitions and the fair value of the total identifiable net assets acquired at the acquisition dates: Acquisitions During the Year Ended December 31, 2018 Purchase consideration Cash on hand $ 380,206 Cash sourced from credit facility 167,689 Total cash consideration paid $ 547,895 Recognized amounts of identifiable net assets acquired measured at their respective fair values: Investment properties $ 542,998 Working capital 4,897 Total identifiable net assets $ 547,895 |
INVESTMENT PROPERTIES (Tables)
INVESTMENT PROPERTIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INVESTMENT PROPERTIES | |
Schedule of investment property summary | As at December 31, 2019 2018 Income-producing properties $ 4,377,623 $ 3,403,985 Properties under development 51,310 17,009 Land held for development 28,966 3,984 $ 4,457,899 $ 3,424,978 |
Schedule of changes in investment properties | Years ended December 31, 2019 2018 Income- producing Properties Land held for Income- producing Properties under Land held for Balance, beginning of year $ 3,403,985 $ 17,009 $ 3,984 $ 2,714,684 $ — $ 18,884 Ground leases (1) 11,801 — — — — — Adjusted balance, beginning of year $ 3,415,786 $ 17,009 $ 3,984 $ 2,714,684 $ — $ 18,884 Additions — Capital expenditures: Maintenance or improvements 3,272 — — 8,164 — — Developments or expansions 3,641 27,250 — 19,986 287 66 — Acquisitions (note 3) 951,065 8,932 24,939 542,998 — 1,232 — Leasing commissions 1,079 — — 3,340 — — — Tenant incentives 515 — — 816 — — Transfers to properties under development — — — (12,206 ) 16,473 (4,267 ) Fair value gains (losses), net 243,351 (135 ) 557 353,258 — 1,253 Foreign currency translation, net (180,107 ) (1,746 ) (514 ) 147,336 249 196 Amortization of straight-line rent 5,074 — — 4,274 — — Amortization of tenant incentives (5,122 ) — — (5,402 ) — — Other changes 189 — — (972 ) — — Classified as assets held for sale (note 5) (61,120 ) — — (372,291 ) — (13,380 ) Balance, end of year $ 4,377,623 $ 51,310 $ 28,966 $ 3,403,985 $ 17,009 $ 3,984 (1) Impact of adoption of IFRS 16, Leases |
Schedule of minimum rental commitments payable on non-cancellable operating leases | 2020 $ 267,967 2021 262,063 2022 247,796 2023 218,757 2024 148,423 2025 and thereafter 818,685 $ 1,963,691 |
Schedule of the key valuation metrics for income-producing properties by country | Valuations are most sensitive to changes in discount rates and terminal capitalization rates. The key valuation metrics for income-producing properties by country are set out below: As at December 31, 2019 2018 (1) Weighted (2) Maximum Minimum Weighted (2) Maximum Minimum Canada Discount rate 5.90% 8.75% 5.25% 5.63% 7.75% 5.00% Terminal capitalization rate 5.55% 8.00% 5.00% 6.01% 7.00% 5.00% United States Discount rate 6.41% 9.50% 5.00% 6.68% 10.00% 5.75% Terminal capitalization rate 6.23% 8.75% 5.25% 6.46% 9.75% 5.25% Germany Discount rate 6.83% 8.25% 5.70% 6.89% 8.25% 5.70% Terminal capitalization rate 6.31% 8.75% 5.00% 6.89% 8.75% 5.25% Austria Discount rate 7.96% 10.00% 7.00% 8.37% 10.00% 8.00% Terminal capitalization rate 7.34% 9.75% 6.75% 7.88% 10.00% 7.00% Netherlands Discount rate 5.24% 6.00% 4.70% 5.93% 6.50% 5.70% Terminal capitalization rate 6.14% 7.55% 5.60% 6.48% 7.45% 6.00% Other Discount rate 8.25% 10.00% 7.25% 8.23% 9.50% 6.75% Terminal capitalization rate 8.20% 9.75% 6.25% 8.48% 10.00% 6.75% Total Discount rate 6.60% 10.00% 4.70% 6.90% 10.00% 5.00% Terminal capitalization rate 6.32% 9.75% 5.00% 6.81% 10.00% 5.00% (1) Excludes assets held for sale (note 5). (2) Weighted based on income-producing property fair value. |
Schedule of sensitivity of the fair value of income-producing properties to changes in either the discount rate or terminal capitalization rate | Discount Rate Terminal Capitalization Rate Rate sensitivity Fair value Change in fair value Fair value Change in fair value +50 basis points $ 4,214,326 $ (163,297 ) $ 4,183,724 $ (193,899 ) +25 basis points 4,292,338 (85,285 ) 4,276,122 (101,501 ) Base rate 4,377,623 — 4,377,623 — -25 basis points 4,460,971 83,348 4,487,427 109,804 -50 basis points $ 4,546,335 $ 168,712 $ 4,607,420 $ 229,797 |
ASSETS HELD FOR SALE AND DISP_2
ASSETS HELD FOR SALE AND DISPOSITIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ASSETS HELD FOR SALE AND DISPOSITIONS | |
Schedule of properties disposed | During the year ended December 31, 2019, 13 properties located in Canada and the United States previously classified as assets held for sale were disposed. The properties consist of the following: Property Location Date disposed Sale price 3 Walker Drive Brampton, ON January 15, 2019 $ 13,380 Iowa properties (four properties): 403 S 8th Street Montezuma, IA 1951 A Avenue Victor, IA 408 N Maplewood Avenue Williamsburg, IA 411 N Maplewood Avenue Williamsburg, IA February 25, 2019 22,323 375 Edward Street Richmond Hill, ON February 27, 2019 8,050 330 Finchdene Square Toronto, ON September 20, 2019 13,150 200 Industrial Parkway Aurora, ON November 4, 2019 10,010 Michigan properties (five properties): 1800 Hayes Street Grand Haven, MI 3501 John F Donnelly Drive Holland, MI 3601 John F Donnelly Drive Holland, MI 3575 128th Avenue North Holland, MI 6151 Bancroft Avenue Alto, MI December 4, 2019 38,852 $ 105,765 |
Schedule of fair value changes in properties classified as assets held for sale | The following table summarizes the fair value changes in properties classified as assets held for sale: Years ended December 31, 2019 2018 Balance, beginning of year $ 44,238 $ 391,453 Fair value gains, net 1,669 196 Foreign currency translation, net (1,262 ) (3,466 ) Disposals (105,765 ) (729,608 ) Classified as assets held for sale from investment properties (note 4) 61,120 385,671 Other — (8 ) Balance, end of year $ — $ 44,238 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
OTHER ASSETS | |
Schedule of other assets | As at December 31, 2019 2018 Deferred financing costs associated with the revolving credit facility $ 885 $ 1,172 Long-term receivables 388 448 Long-term proceeds receivable associated with a property disposal (note 7) — 11,805 $ 1,273 $ 13,425 |
CURRENT ASSETS (Tables)
CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
CURRENT ASSETS | |
Schedule of proceeds receivable | Balance, December 31, 2018 $ 11,805 Change in consumer price index inflation factor 441 Foreign currency translation (596 ) Balance, December 31, 2019 $ 11,650 |
UNSECURED DEBT AND CROSS CURR_2
UNSECURED DEBT AND CROSS CURRENCY INTEREST RATE SWAPS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Borrowings [abstract] | |
Schedule of unsecured debentures and term loans, net | As at December 31, 2019 2018 Maturity Date Amortized (1) Principal issued and Amortized (1) Principal issued and 2021 Debentures July 5, 2021 $ 249,646 $ 250,000 $ 249,424 $ 250,000 2023 Debentures November 30, 2023 398,746 400,000 398,425 400,000 2024 Term Loan December 19, 2024 239,153 239,816 251,853 252,414 2026 Term Loan December 11, 2026 299,449 300,000 298,712 300,000 $ 1,186,994 $ 1,189,816 $ 1,198,414 $ 1,202,414 |
Schedule of cross currency interest rate swaps | As at December 31, 2019 2018 Financial liabilities at fair value 2021 Cross Currency Interest Rate Swap $ 3,630 $ 26,877 2023 Cross Currency Interest Rate Swap 24,298 56,922 2022 Cross Currency Interest Rate Swap — 3,826 2024 Cross Currency Interest Rate Swap 1,202 — 2025 Cross Currency Interest Rate Swap — 17,132 2026 Cross Currency Interest Rate Swap 1,235 — $ 30,365 $ 104,757 |
CURRENT LIABILITIES (Tables)
CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
CURRENT LIABILITIES | |
Schedule of accounts payable and accrued liabilities | As at December 31, 2019 2018 Accounts payable $ 6,840 $ 5,352 Accrued salaries, incentives and benefits 5,416 5,364 Accrued interest payable 6,507 6,606 Accrued construction payable 5,933 2,429 Accrued professional fees 3,822 2,910 Accrued employee unit-based compensation 5,586 3,193 Accrued trustee/director unit-based compensation 3,301 2,330 Accrued property operating costs 6,376 2,013 Accrued land transfer tax in connection with an acquisition — 5,499 Accrued leasing commissions 177 407 Accrual associated with a property disposal (note 7) 1,944 2,047 Other accrued liabilities 4,281 3,817 $ 50,183 $ 41,967 |
DISTRIBUTIONS TO STAPLED UNIT_2
DISTRIBUTIONS TO STAPLED UNITHOLDERS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
DISTRIBUTIONS TO STAPLED UNITHOLDERS | |
Schedule of distributions declared | Years ended December 31, 2019 2018 Total distributions Distributions Total distributions Distributions Monthly cash distributions declared $ 139,331 $ 2.81 $ 125,131 $ 2.73 Special distribution payable in cash — — 13,710 $ 0.30 Special distribution payable in stapled units — — 41,128 $ 0.90 $ 139,331 $ 179,969 |
STAPLED UNITHOLDERS' EQUITY (Ta
STAPLED UNITHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Unit-based Compensation | |
Disclosure Of Assumptions Used For Fair Value Calculation Of Performance Stock Units | Grant Date January 1, August 12, September 24, 2019 and November 16, 2018 PSUs granted 28,317 Term to expiry 2.0 years Average volatility rate 15.1% Risk free interest rate 1.72% |
Schedule of unit-based compensation expense recognized in general and administrative expenses | The Trust’s unit-based compensation expense recognized in general and administrative expenses was: Years ended December 31, 2019 2018 DSPs for trustees/directors (1) $ 1,645 $ 948 Restricted Stapled Unit Plan for executives and employees 5,839 2,996 Unit-based compensation expense $ 7,484 $ 3,944 Fair value remeasurement expense included in the above: • DSPs for trustees/directors $ 568 $ 122 • Restricted Stapled Unit Plan for executives and employees 1,321 378 Total fair value remeasurement expense $ 1,889 $ 500 (1) In respect of fees mandated and elected to be taken as DSUs. |
Schedule of accumulated other comprehensive income | Accumulated other comprehensive income consists of the following: As at December 31, 2019 2018 Foreign currency translation gains on investments in subsidiaries, net of related hedging activities and non-controlling (1) $ 159,499 $ 320,158 Fair value losses on derivatives designated as net investment hedges (43,309 ) (108,706 ) $ 116,190 $ 211,452 (1) Includes foreign currency translation gains and losses from non-derivative |
Director/Trustee Deferred Share Unit Plan | |
Unit-based Compensation | |
Summary of reconciliation of the changes in unit-based compensation | A reconciliation of the changes in the notional DSUs outstanding is presented below: 2019 2018 Number Weighted Average Number Weighted Average DSUs outstanding, January 1 44 $ 46.01 28 $ 41.88 Granted 17 55.59 16 53.11 Settled (11 ) 51.57 — — DSUs outstanding, December 31 50 $ 48.01 44 $ 46.01 |
Executive Deferred Stapled Unit Plan | |
Unit-based Compensation | |
Summary of reconciliation of the changes in unit-based compensation | A reconciliation of the changes in stapled units outstanding under the Restricted Stapled Unit Plan is presented below: 2019 2018 Number Weighted Average Number Weighted Average Restricted stapled units outstanding, January 1 117 $ 50.34 106 $ 43.32 New grants — RSUs and PSUs (1) 85 61.90 75 53.29 Forfeited (2 ) 64.16 — — Settled in cash (35 ) 52.91 — — Settled in stapled units (20 ) 52.91 (64 ) 42.14 Restricted stapled units outstanding, December 31 (1) 145 $ 55.93 117 $ 50.34 (1) New grants include 24,587 PSUs granted during the year ended December 31, 2019 (2018 — 3,730 PSUs). Total restricted stapled units outstanding at December 31, 2019 include a total of 28,317 PSUs granted (2018 — 3,730 PSUs). |
RENTAL REVENUE, RECOVERIES, C_2
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES | |
Schedule of rental revenue | Years ended December 31, 2019 2018 Base rent $ 240,345 $ 221,114 Straight-line rent amortization 5,074 4,274 Tenant incentive amortization (5,122 ) (5,402 ) Property tax recoveries 22,280 19,344 Property insurance recoveries 2,161 2,174 Operating cost recoveries 8,085 4,983 $ 272,823 $ 246,487 |
Schedule of property operating costs | Years ended December 31, 2019 2018 Non-recoverable Property taxes and utilities $ 1,096 $ 1,077 Legal 189 436 Consulting 90 123 Environmental and appraisals 511 702 Repairs and maintenance 804 725 Ground rents — 664 Other 558 730 $ 3,248 $ 4,457 Recoverable from tenants: Property taxes and utilities $ 23,784 $ 20,127 Property insurance 2,391 2,138 Repairs and maintenance 2,733 2,069 Property management fees 2,001 1,470 Other 1,207 681 $ 32,116 $ 26,485 Property operating costs $ 35,364 $ 30,942 |
Schedule of general and administrative expenses | Years ended December 31, 2019 2018 Salaries, incentives and benefits $ 13,753 $ 16,030 Audit, legal and consulting 4,268 3,972 Trustee/director fees including distributions and revaluations and expenses 1,976 1,285 RSU and PSU compensation expense including distributions and revaluations 5,839 2,996 Other public entity costs 2,096 1,651 Office rents including property taxes and common area maintenance costs 379 900 Other 3,108 2,570 $ 31,419 $ 29,404 |
Schedule of interest expense and other financing costs | Years ended December 31, 2019 2018 Interest and amortized issuance costs relating to debentures and term loans $ 26,632 $ 18,544 Amortization of deferred financing costs and other interest expense and charges 2,169 3,869 Interest expense related to lease obligations (note 2(o)) 1,300 — $ 30,101 $ 22,413 Less: Capitalized interest (160 ) — $ 29,941 $ 22,413 |
Schedule of fair value losses on financial instruments | Years ended December 31, 2019 2018 Foreign exchange forward contracts, net $ 8 $ 562 Losses on term loan debt modifications (note 8(a)) 752 — Cross currency interest rate swap (note 8(b)) (1,952 ) — $ (1,192 ) $ 562 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
Schedule of major components of the income tax expense | Years ended December 31, 2019 2018 Current income tax: Current taxes $ 6,069 $ 7,902 Current taxes referring to previous periods (1,526 ) (973 ) Withholding taxes and other 528 702 $ 5,071 $ 7,631 Deferred income tax: Origination and reversal of temporary differences $ 41,140 $ 56,423 Impact of changes in tax rates (1,678 ) (4,637 ) Benefits arising from a previously unrecognized tax loss that reduced: — Current tax expense (12 ) (6,408 ) — Deferred tax expense (285 ) (200 ) Withholding taxes on profits of subsidiaries (388 ) 85 Other (1,181 ) (243 ) $ 37,596 $ 45,020 Income tax expense $ 42,667 $ 52,651 |
Schedule of effective income tax rate reported in the combined statements of income reconciled to the Canadian statutory rate | Years ended December 31, 2019 2018 Income before income taxes $ 424,942 $ 518,008 Expected income taxes at the Canadian statutory tax rate of 26.5% (2018 — 26.5%) $ 112,610 $ 137,272 Income distributed and taxable to unitholders (59,966 ) (81,272 ) Net foreign rate differentials (7,526 ) (7,830 ) Net change in provisions for uncertain tax positions 72 810 Net permanent differences 519 7,261 Net effect of change in tax rates (1,678 ) (4,637 ) Withholding taxes and other (1,364 ) 1,047 Income tax expense $ 42,667 $ 52,651 |
Schedule of temporary differences in deferred tax assets and liabilities | As at December 31, 2019 2018 Deferred tax assets: Investment properties $ 83 $ 769 Eligible capital expenditures 2,270 2,441 Other 1,704 2,091 Deferred tax assets $ 4,057 $ 5,301 Deferred tax liabilities: Investment properties $ 323,385 $ 304,593 Withholding tax on undistributed subsidiary profits 134 682 Other (2,547 ) (1,310 ) Deferred tax liabilities $ 320,972 $ 303,965 |
Schedule of changes in the net deferred tax liabilities | Years ended December 31, 2019 2018 Balance, beginning of year $ 298,664 $ 238,310 Deferred tax expense recognized in net income 37,596 45,020 Foreign currency translation of deferred tax balances (19,345 ) 15,334 Net deferred tax liabilities, end of year $ 316,915 $ 298,664 |
Schedule of reconciliation of the beginning and ending amounts of unrecognized tax benefits | As at December 31, 2019 2018 Unrecognized tax benefits balance, beginning of year $ 13,197 $ 12,035 Decreases for tax positions of prior years (3,056 ) (1,183 ) Increases for tax positions of current year 2,090 1,898 Foreign currency impact (809 ) 447 Unrecognized tax benefits balance, end of year $ 11,422 $ 13,197 |
Schedule of tax years subject to examination | Major Jurisdictions Canada 2013 through 2019 United States 2016 through 2019 Austria 2014 through 2019 Germany 2014 through 2019 Netherlands 2014 through 2019 |
SEGMENTED DISCLOSURE INFORMAT_2
SEGMENTED DISCLOSURE INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SEGMENTED DISCLOSURE INFORMATION | |
Schedule of revenue by geographic segmentation | Revenue Years ended December 31, 2019 2018 Canada $ 58,952 22 % $ 54,372 22 % United States 108,065 39 % 88,006 36 % Austria 63,724 23 % 65,523 26 % Germany 26,455 10 % 24,735 10 % Netherlands 10,250 4 % 8,621 3 % Other Europe 6,232 2 % 6,226 3 % $ 273,678 100 % $ 247,483 100 % |
Schedule of investment properties by geographic segmentation | Investment properties As at December 31, 2019 2018 Canada $ 979,290 22 % $ 708,645 21 % United States 2,014,489 45 % 1,261,183 37 % Austria 806,355 18 % 840,803 24 % Germany 389,077 9 % 385,703 11 % Netherlands 196,701 4 % 155,778 5 % Other Europe 71,987 2 % 72,866 2 % $ 4,457,899 100 % $ 3,424,978 100 % |
DETAILS OF CASH FLOWS (Tables)
DETAILS OF CASH FLOWS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
DETAILS OF CASH FLOWS | |
Schedule of items not involving current cash flows | Years ended December 31, 2019 2018 Straight-line rent amortization $ (5,074 ) $ (4,274 ) Tenant incentive amortization 5,122 5,402 Unit-based compensation expense (note 11(b)) 7,484 3,944 Fair value gains on investment properties (245,442 ) (354,707 ) Depreciation and amortization 906 300 Fair value (gains) losses on financial instruments (1,192 ) 562 Loss on sale of investment properties 3,045 6,871 Amortization of issuance costs relating to debentures and term loans 855 555 Amortization of deferred financing costs 312 497 Deferred income taxes 37,596 45,020 Other (195 ) 1,040 $ (196,583 ) $ (294,790 ) |
Schedule of changes in working capital balances | Years ended December 31, 2019 2018 Accounts receivable $ (3,670 ) $ (1,626 ) Prepaid expenses and other (906 ) (475 ) Accounts payable and accrued liabilities (639 ) 5,788 Deferred revenue 1,800 (245 ) Restricted cash 470 335 $ (2,945 ) $ 3,777 |
Schedule of cash and cash equivalents | Years ended December 31, 2019 2018 Cash $ 248,499 $ 534,975 Short-term deposits 50,178 123,271 $ 298,677 $ 658,246 |
FAIR VALUE AND RISK MANAGEMENT
FAIR VALUE AND RISK MANAGEMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE AND RISK MANAGEMENT | |
Schedule of measurement of financial assets and liabilities | As at December 31, 2019 2018 Carrying Fair Carrying Fair Financial assets Construction funds in escrow $ 16,767 $ 16,767 $ — $ — Other assets 388 (1) 388 12,253 (1) 12,253 Other receivable 11,650 11,650 — — Accounts receivable 7,812 7,812 4,316 4,316 Prepaid expenses and other 120 (2) 120 111 (2) 111 Restricted cash — — 470 470 Cash and cash equivalents 298,677 298,677 658,246 658,246 $ 335,414 $ 335,414 $ 675,396 $ 675,396 Financial liabilities Unsecured debentures, net $ 648,392 $ 669,090 $ 647,849 $ 654,365 Unsecured term loans, net 538,602 538,602 550,565 550,565 Cross currency interest rate swaps 30,365 30,365 104,757 104,757 Accounts payable and accrued liabilities 50,156 50,156 41,957 41,957 Accounts payable and accrued liabilities 27 (3) 27 10 (3) 10 Distributions payable 13,081 13,081 24,357 24,357 $ 1,280,623 $ 1,301,321 $ 1,369,495 $ 1,376,011 |
Schedule of assets and liabilities measured or disclosed at fair value on a recurring and non-recurring basis and the level within the fair value hierarchy in which the fair value measurements fall | As at December 31, 2019 Level 1 Level 2 Level 3 ASSETS AND LIABILITIES MEASURED OR DISCLOSED AT FAIR VALUE Assets measured at fair value Investment properties $ — $ — $ 4,457,899 Short-term proceeds receivable associated with a property disposal included in other receivable (note 7) — — 11,650 Foreign exchange forward contracts included in prepaid expenses and other — 120 — Liabilities measured or disclosed at fair value Unsecured debentures, net 669,090 — — Unsecured term loans, net — 538,602 — Cross currency interest rate swaps — 30,365 — Foreign exchange forward contracts included in accounts payable and accrued liabilities — 27 — Net assets (liabilities) measured or disclosed at fair value $ (669,090 ) $ (568,874 ) $ 4,469,549 As at December 31, 2018 Level 1 Level 2 Level 3 ASSETS AND LIABILITIES MEASURED OR DISCLOSED AT FAIR VALUE Assets measured at fair value Investment properties $ — $ — $ 3,424,978 Assets held for sale — — 44,238 Long-term proceeds receivable associated with a property disposal included in other assets (note 6) — — 11,805 Short-term proceeds receivable associated with a property disposal included in accounts receivable — — 231 Foreign exchange forward contracts included in prepaid expenses and other — 111 — Liabilities measured or disclosed at fair value Unsecured debentures, net 654,365 — — Unsecured term loans, net — 550,565 — Cross currency interest rate swaps — 104,757 — Foreign exchange forward contracts included in accounts payable and accrued liabilities — 10 — Net assets (liabilities) measured or disclosed at fair value $ (654,365 ) $ (655,221 ) $ 3,481,252 |
Schedule of contractual maturities of financial liabilities |
CAPITAL MANAGEMENT (Tables)
CAPITAL MANAGEMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of objectives, policies and processes for managing capital [abstract] | |
Schedule of total managed capital structure of the Trust | As at December 31, 2019 2018 Unsecured debentures, net $ 648,392 $ 647,849 Unsecured term loans, net 538,602 550,565 Cross currency interest rate swaps 30,365 104,757 Total debt 1,217,359 1,303,171 Stapled unitholders’ equity 3,146,143 2,495,518 Total managed capital $ 4,363,502 $ 3,798,689 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS | |
Schedule of transactions with related parties | Years ended December 31, 2019 2018 Salaries, incentives and short-term benefits $ 5 , $ 6,057 Unit-based compensation expense including fair value adjustments 3,980 2,380 $ 9,533 $ 8,437 |
COMBINED FINANCIAL INFORMATION
COMBINED FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
COMBINED FINANCIAL INFORMATION | |
Schedule of Balance Sheet | Balance Sheet As at December 31, 2019 Granite REIT Granite GP Eliminations/ Granite REIT and ASSETS Non-current Investment properties $ 4,457,899 $ 4,457,899 Investment in Granite LP (1) — 21 (21 ) — Other non-current 24,216 24,216 4,482,115 21 (21 ) 4,482,115 Current assets: Other current assets 23,144 20 23,164 Intercompany receivable (2) — 11,828 (11,828 ) — Cash and cash equivalents 298,385 292 298,677 Total assets $ 4,803,644 12,161 (11,849 ) $ 4,803,956 LIABILITIES AND EQUITY Non-current Unsecured debt, net $ 1,186,994 $ 1,186,994 Other non-current 383,763 383,763 1,570,757 1,570,757 Current liabilities: Intercompany payable (2) 11,828 (11,828 ) — Other current liabilities 72,949 12,140 85,089 Total liabilities 1,655,534 12,140 (11,828 ) 1,655,846 Equity: Stapled unitholders’ equity 3,146,122 21 3,146,143 Non-controlling 1,988 (21 ) 1,967 Total liabilities and equity $ 4,803,644 12,161 (11,849 ) $ 4,803,956 (1) Granite LP is 100% owned by Granite REIT and Granite GP. (2) Represents employee and trustee/director compensation related amounts which will be reimbursed by Granite LP. Balance Sheet As at December 31, 2018 Granite REIT Granite GP Eliminations/ Granite REIT and ASSETS Non-current Investment properties $ 3,424,978 $ 3,424,978 Investment in Granite LP (1) — 17 (17 ) — Other non-current 53,785 53,785 3,478,763 17 (17 ) 3,478,763 Current assets: Assets held for sale 44,238 44,238 Other current assets 7,462 46 7,508 Intercompany receivable (2) — 7,130 (7,130 ) — Cash and cash equivalents 657,432 814 658,246 Total assets $ 4,187,895 8,007 (7,147 ) $ 4,188,755 LIABILITIES AND EQUITY Non-current Unsecured debt, net $ 1,198,414 $ 1,198,414 Other non-current 408,722 408,722 1,607,136 1,607,136 Current liabilities: Intercompany payable (2) 7,130 (7,130 ) — Other current liabilities 76,644 7,990 84,634 Total liabilities 1,690,910 7,990 (7,130 ) 1,691,770 Equity: Stapled unitholders’ equity 2,495,501 17 2,495,518 Non-controlling 1,484 (17 ) 1,467 Total liabilities and equity $ 4,187,895 8,007 (7,147 ) $ 4,188,755 (1) Granite LP is 100% owned by Granite REIT and Granite GP. (2) Represents employee and trustee/director compensation related amounts which will be reimbursed by Granite LP. |
Schedule of Income Statement | Income Statement Year ended December 31, 2019 Granite REIT Granite GP Eliminations/ Granite REIT and Revenue $ 273,678 $ 273,678 General and administrative expenses 31,419 31,419 Interest expense and other financing costs 29,941 29,941 Other costs and expenses, net 30,965 30,965 Share of (income) loss of Granite LP — (4 ) 4 — Fair value gains on investment properties, net (245,442 ) (245,442 ) Fair value gains on financial instruments (1,192 ) (1,192 ) Loss on sale of investment properties 3,045 3,045 Income before income taxes 424,942 4 (4 ) 424,942 Income tax expense 42,667 42,667 Net income 382,275 4 (4 ) 382,275 Less net income attributable to non-controlling 200 (4 ) 196 Net income attributable to stapled unitholders $ 382,075 4 — $ 382,079 Income Statement Year ended December 31, 2018 Granite REIT Granite GP Eliminations/ Granite REIT and Revenue $ 247,483 $ 247,483 General and administrative expenses 29,404 29,404 Interest expense and other financing costs 22,413 22,413 Other costs and expenses, net 16,964 16,964 Share of (income) loss of Granite LP — (5 ) 5 — Fair value gains on investment properties, net (354,707 ) (354,707 ) Fair value loss on financial instruments 562 562 Acquisition transaction costs 7,968 7,968 Loss on sale of investment properties 6,871 6,871 Income before income taxes 518,008 5 (5 ) 518,008 Income tax expense 52,651 52,651 Net income 465,357 5 (5 ) 465,357 Less net income attributable to non-controlling 206 (5 ) 201 Net income attributable to stapled unitholders $ 465,151 5 — $ 465,156 |
Schedule of Statement of Cash Flows | Statement of Cash Flows Year ended December 31, 2019 Granite REIT Granite GP Eliminations/ Granite REIT and OPERATING ACTIVITIES Net income $ 382,275 4 (4 ) $ 382,275 Items not involving operating cash flows (196,583 ) (4 ) 4 (196,583 ) Changes in working capital balances (2,423 ) (522 ) (2,945 ) Other operating activities 684 684 Cash provided by operating activities 183,953 (522 ) — 183,431 INVESTING ACTIVITIES Property acquisitions (930,878 ) (930,878 ) Proceeds from disposals, net 85,536 85,536 Investment property capital additions — Maintenance or improvements (2,889 ) (2,889 ) — Developments or expansions (27,407 ) (27,407 ) Other investing activities (456 ) (456 ) Cash used in investing activities (876,094 ) — — (876,094 ) FINANCING ACTIVITIES Distributions paid (136,897 ) (136,897 ) Other financing activities 480,422 480,422 Cash provided by financing activities 343,525 — — 343,525 Effect of exchange rate changes (10,431 ) (10,431 ) Net decrease in cash and cash equivalents during the year $ (359,047 ) (522 ) — $ (359,569 ) Statement of Cash Flows Year ended December 31, 2018 Granite REIT Granite GP Eliminations/ Adjustments Granite REIT and OPERATING ACTIVITIES Net income $ 465,357 5 (5 ) $ 465,357 Items not involving operating cash flows (294,790 ) (5 ) 5 (294,790 ) Changes in working capital balances 3,410 367 3,777 Other operating activities (16,456 ) (16,456 ) Cash provided by operating activities 157,521 367 — 157,888 INVESTING ACTIVITIES Property acquisitions (549,120 ) (549,120 ) Proceeds from disposals, net 681,319 681,319 Investment property capital additions — Maintenance or improvements (17,799 ) (17,799 ) — Developments or expansions (15,378 ) (15,378 ) Acquisition deposits (33,086 ) (33,086 ) Other investing activities 29,925 29,925 Cash provided by investing activities 95,861 — — 95,861 FINANCING ACTIVITIES Distributions paid (125,131 ) (125,131 ) Other financing activities 449,314 449,314 Cash provided by financing activities 324,183 — — 324,183 Effect of exchange rate changes 11,295 11,295 Net increase in cash and cash equivalents during the year $ 588,860 367 — $ 589,227 |
NATURE AND DESCRIPTION OF THE_2
NATURE AND DESCRIPTION OF THE TRUST (Details) | Jan. 03, 2013shares |
Nature and description of the Trust | |
Common shares exchange ratio for stapled units | 1 |
Granite REIT | |
Nature and description of the Trust | |
Number of units included in one stapled unit (in units) | 1 |
Granite GP | |
Nature and description of the Trust | |
Number of common shares included in one stapled unit (in shares) | 1 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Fixed Assets (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Computer hardware and software | Minimum | |
Fixed Assets | |
Useful Lives of Fixed Assets | 3 years |
Computer hardware and software | Maximum | |
Fixed Assets | |
Useful Lives of Fixed Assets | 5 years |
Other furniture and fixtures | Minimum | |
Fixed Assets | |
Useful Lives of Fixed Assets | 5 years |
Other furniture and fixtures | Maximum | |
Fixed Assets | |
Useful Lives of Fixed Assets | 7 years |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Investment Properties: | ||
Current and deferred income tax expense | $ 42,667 | $ 52,651 |
Canada | ||
Investment Properties: | ||
Current and deferred income tax expense | $ 0 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Accounting Standards Adopted in 2018 (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019CAD ($) | |
IFRS 03, Revenue from Contracts with Customers | |
Disclosure of initial application of standards or interpretations [line items] | |
Acquisition transaction costs | $ 3.6 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Right of use Assets (Details) - IFRS Sixteen [Member] - CAD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
Disclosure of quantitative information about right-of-use assets [line items] | ||
Right-of-use assets | $ 1,531 | $ 1,826 |
Lease obligations | 33,045 | 13,627 |
Investment property completed [member] | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Right-of-use assets | 31,523 | 11,801 |
Office Space [Member] | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Right-of-use assets | 1,429 | 1,780 |
Office equipment [member] | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Right-of-use assets | $ 102 | $ 46 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Future Accounting Policy Changes (Details) - property | Dec. 31, 2019 | Dec. 31, 2018 |
Leased land | ||
Future Accounting Policy Changes IFRS 16, Leases | ||
Number of properties | 2 | 2 |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019CAD ($) | Dec. 31, 2019USD ($) | Jan. 01, 2019CAD ($) | Dec. 31, 2018CAD ($) | |
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Interest expenses on leases | $ 1,300 | |||
IFRS Sixteen [Member] | ||||
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Operating lease weighted average incremental borrowing rate | 4.40% | |||
Lease obligations | 33,045 | $ 13,627 | ||
Gross lease liabilities | 15,400 | |||
Lease other adjustments | $ 200 | |||
IFRS Sixteen [Member] | Europe Member [Member] | ||||
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Operating lease other lease commitements | $ 1,600 | |||
IFRS Sixteen [Member] | Office equipment [member] | ||||
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Additions to right of use assets | 74 | |||
Lease liabilities additional right of use assets | 74 | |||
IFRS Sixteen [Member] | Office Space [Member] | ||||
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Additions to right of use assets | 293 | |||
Lease liabilities additional right of use assets | 293 | |||
IFRS Sixteen [Member] | Property Plant And Equipments [Member] | ||||
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Right of use assets depreciation | 600 | |||
Interest expenses on leases | $ 1.3 | |||
IFRS Sixteen [Member] | Investment property completed [member] | ||||
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Additions to right of use assets | 20,500 | |||
Lease liabilities additional right of use assets | $ 20,500 | |||
Lease commitements | 27,200 | |||
IFRS Sixteen [Member] | Investment property completed [member] | Year Two Thousand And Fourty Nine Member [Member] | ||||
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Operating lease future annual payment | 500 | |||
IFRS Sixteen [Member] | Investment property completed [member] | Year Two Thousand And Ninety Six Member [Member] | ||||
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Operating lease future annual payment | $ 100 |
SIGNIFICANT ACCOUNTING POLIC_10
SIGNIFICANT ACCOUNTING POLICIES - Future Minimum Lease Payments (Detail) $ in Thousands | Dec. 31, 2019CAD ($) |
Future Minimum Lease Payments Line Items [Line Items] | |
Future minimum lease payments due | $ 33,045 |
2020 | |
Future Minimum Lease Payments Line Items [Line Items] | |
Future minimum lease payments due | 619 |
2021 | |
Future Minimum Lease Payments Line Items [Line Items] | |
Future minimum lease payments due | 719 |
2022 | |
Future Minimum Lease Payments Line Items [Line Items] | |
Future minimum lease payments due | 417 |
2023 | |
Future Minimum Lease Payments Line Items [Line Items] | |
Future minimum lease payments due | 137 |
2024 | |
Future Minimum Lease Payments Line Items [Line Items] | |
Future minimum lease payments due | 119 |
2025 and thereafter | |
Future Minimum Lease Payments Line Items [Line Items] | |
Future minimum lease payments due | $ 31,034 |
ACQUISITIONS - Income-Producing
ACQUISITIONS - Income-Producing Properties (Details) $ in Thousands | Dec. 19, 2019CAD ($) | Nov. 19, 2019CAD ($) | Oct. 18, 2019CAD ($) | Oct. 04, 2019CAD ($) | Aug. 01, 2019CAD ($) | Jul. 08, 2019CAD ($) | Jul. 01, 2019CAD ($) | May 23, 2019CAD ($) | Apr. 09, 2019CAD ($) | Mar. 01, 2019CAD ($) | Dec. 31, 2019CAD ($)property | Dec. 31, 2018CAD ($) | Dec. 03, 2018CAD ($) | Nov. 01, 2018CAD ($) | Jul. 12, 2018CAD ($) | May 23, 2018CAD ($) | Apr. 04, 2018CAD ($) | Mar. 23, 2018CAD ($) |
Income-producing properties | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 947,478 | $ 542,998 | ||||||||||||||||
Transaction costs | 3,587 | |||||||||||||||||
Total acquisition cost | 951,065 | |||||||||||||||||
Wilmer TX | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 58,087 | |||||||||||||||||
Transaction costs | 141 | |||||||||||||||||
Total acquisition cost | 58,228 | |||||||||||||||||
Lancaster,TX | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | 106,120 | |||||||||||||||||
Transaction costs | 168 | |||||||||||||||||
Total acquisition cost | $ 106,288 | |||||||||||||||||
Mississauga, ON | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 174,106 | |||||||||||||||||
Transaction costs | 146 | |||||||||||||||||
Total acquisition cost | $ 174,252 | |||||||||||||||||
Columbus,OH | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 71,607 | |||||||||||||||||
Transaction costs | 289 | |||||||||||||||||
Total acquisition cost | $ 71,896 | |||||||||||||||||
Bom, Netherlands | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 25,704 | |||||||||||||||||
Transaction costs | 1,640 | |||||||||||||||||
Total acquisition cost | $ 27,344 | |||||||||||||||||
Horn Lake MS | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 24,492 | |||||||||||||||||
Transaction costs | 231 | |||||||||||||||||
Total acquisition cost | $ 24,723 | |||||||||||||||||
GreenWood IN | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 39,581 | |||||||||||||||||
Transaction costs | 40 | |||||||||||||||||
Total acquisition cost | $ 39,621 | |||||||||||||||||
Pooler GA | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 62,657 | |||||||||||||||||
Transaction costs | 614 | |||||||||||||||||
Total acquisition cost | $ 63,271 | $ 63,271 | ||||||||||||||||
Dallas, TX | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 269,764 | |||||||||||||||||
Transaction costs | 247 | |||||||||||||||||
Total acquisition cost | 270,011 | |||||||||||||||||
Southaven, MS | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 63,717 | |||||||||||||||||
Transaction costs | 38 | |||||||||||||||||
Total acquisition cost | 63,755 | |||||||||||||||||
Southaven, MS | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | 51,643 | |||||||||||||||||
Transaction costs | 33 | $ 247 | ||||||||||||||||
Total acquisition cost | $ 51,676 | |||||||||||||||||
HoustonTX | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 33,361 | |||||||||||||||||
Transaction costs | 510 | |||||||||||||||||
Total acquisition cost | $ 33,871 | |||||||||||||||||
Plainfield, Indiana | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 50,835 | |||||||||||||||||
Greencastle, Pennsylvania | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 44,323 | |||||||||||||||||
West Jefferson, Ohio | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Number of properties | property | 4 | |||||||||||||||||
Erfurt, Germany | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 82,677 | |||||||||||||||||
Shepherdsville, Kentucky | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 65,866 | |||||||||||||||||
West Jefferson,OH | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 1,232 | $ 299,297 | ||||||||||||||||
Total Property | ||||||||||||||||||
Disclosure of detailed information about business combination [line items] | ||||||||||||||||||
Investment properties | $ 980,839 | $ 544,230 | ||||||||||||||||
Transaction costs | 4,097 | |||||||||||||||||
Total acquisition cost | $ 984,936 |
ACQUISITIONS - Income Producing
ACQUISITIONS - Income Producing Properties - Additional Information (Details) - CAD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Oct. 18, 2019 | |
Disclosure of detailed information about business combination [line items] | |||
Revenue | $ 273,678 | $ 247,483 | |
Net income | 382,275 | 465,357 | |
Investment Properties Transaction Costs Recognised As on Acquisition Date | 7,968 | ||
Income-producing properties | |||
Disclosure of detailed information about business combination [line items] | |||
Revenue | 20,100 | ||
Net income | 33,200 | ||
Revenue of combined entity as if combination occurred at beginning of period | 35,400 | ||
Net income of combined entity as if combination occurred at beginning of period | 56,700 | ||
Investment Properties Transaction Costs Recognised As on Acquisition Date | 4,100 | $ 7,400 | |
Right-of-use assets | 20,500 | ||
Total acquisition cost | 951,065 | ||
Pooler GA | |||
Disclosure of detailed information about business combination [line items] | |||
Total acquisition cost | $ 63,271 | $ 63,271 |
ACQUISITIONS - Consideration (D
ACQUISITIONS - Consideration (Details) - Income-producing properties - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Purchase consideration: | ||
Cash on hand | $ 380,206 | |
Cash sourced from credit facility | 167,689 | |
Total cash consideration paid | 547,895 | |
Recognized amounts of identifiable net assets acquired measured at their respective fair values: | ||
Investment properties | $ 947,478 | 542,998 |
Working capital | 4,897 | |
Total identifiable net assets | $ 547,895 |
ACQUISITIONS - Consideration -
ACQUISITIONS - Consideration - Additional Information (Details) $ in Thousands, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2019CAD ($) | Dec. 31, 2018CAD ($) | Dec. 31, 2019USD ($) | Nov. 19, 2019CAD ($) | Jul. 12, 2018CAD ($) | |
Disclosure of detailed information about business combination [line items] | |||||
Acquisition transaction costs | $ 7,968 | ||||
Cash held in escrow | $ 16,767 | ||||
Income-producing properties | |||||
Disclosure of detailed information about business combination [line items] | |||||
Acquisition transaction costs | 4,100 | 7,400 | |||
Investment properties | 947,478 | 542,998 | |||
Erfurt, Germany | |||||
Disclosure of detailed information about business combination [line items] | |||||
Acquisition transaction costs | 5,400 | ||||
Investment properties | $ 82,677 | ||||
Pursuing other acquisition opportunities | |||||
Disclosure of detailed information about business combination [line items] | |||||
Acquisition transaction costs | $ 600 | ||||
Dallas, TX | |||||
Disclosure of detailed information about business combination [line items] | |||||
Cash held in escrow | 16,800 | $ 12.9 | |||
Investment properties | $ 269,764 | ||||
Dallas, TX | Purchase Price Investment Propery Placed In Escrow Account | |||||
Disclosure of detailed information about business combination [line items] | |||||
Investment properties | $ 20,500 | $ 15.5 |
ACQUISITIONS - Acquisition Depo
ACQUISITIONS - Acquisition Deposits (Details) $ in Thousands, $ in Millions | Dec. 31, 2018CAD ($)property | Dec. 31, 2018USD ($)property |
Disclosure of detailed information about business combination [line items] | ||
Acquisition deposits | $ 34,288 | |
Mississauga, Ontario | ||
Disclosure of detailed information about business combination [line items] | ||
Acquisition deposits | $ 7,000 | |
Number of properties | property | 2 | 2 |
Texas | ||
Disclosure of detailed information about business combination [line items] | ||
Acquisition deposits | $ 27,300 | $ 20 |
INVESTMENT PROPERTIES - Compone
INVESTMENT PROPERTIES - Components of investment properties (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Investment Properties: | |||
Investment properties | $ 4,457,899 | $ 3,424,978 | |
Income-producing properties | |||
Investment Properties: | |||
Investment properties | 4,377,623 | 3,403,985 | $ 2,714,684 |
Properties under development | |||
Investment Properties: | |||
Investment properties | 51,310 | 17,009 | |
Land held for development | |||
Investment Properties: | |||
Investment properties | $ 28,966 | $ 3,984 | $ 18,884 |
INVESTMENT PROPERTIES - Changes
INVESTMENT PROPERTIES - Changes in investment properties (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Investment Properties: | ||
Balance, beginning of year | $ 3,424,978 | |
Fair value gains(losses), net | 245,442 | $ 354,707 |
Amortization of straight- line rent | (5,074) | (4,274) |
Amortization of tenant incentives | (5,122) | (5,402) |
Balance, end of year | 4,457,899 | 3,424,978 |
Income-producing properties | ||
Investment Properties: | ||
Balance, beginning of year | 3,403,985 | 2,714,684 |
Capital expenditures: Maintenance or improvements | 3,272 | 8,164 |
Capital expenditures: Developments or expansions | 3,641 | 19,986 |
Acquisitions | 951,065 | 542,998 |
Leasing commissions | 1,079 | 3,340 |
Tenant incentives | 515 | 816 |
Transfers to properties under development | (12,206) | |
Fair value gains(losses), net | 243,351 | 353,258 |
Foreign currency translation, net | (180,107) | 147,336 |
Amortization of straight- line rent | 5,074 | 4,274 |
Amortization of tenant incentives | (5,122) | (5,402) |
Other changes | 189 | (972) |
Classified as assets held for sale | (61,120) | (372,291) |
Balance, end of year | 4,377,623 | 3,403,985 |
Income-producing properties | As Restated | ||
Investment Properties: | ||
Balance, beginning of year | 3,415,786 | 2,714,684 |
Ground leases | 11,801 | |
Balance, end of year | 3,415,786 | |
Properties under development | ||
Investment Properties: | ||
Balance, beginning of year | 17,009 | |
Capital expenditures: Developments or expansions | 27,250 | 287 |
Acquisitions | 8,932 | |
Transfers to properties under development | 16,473 | |
Fair value gains(losses), net | (135) | |
Foreign currency translation, net | (1,746) | 249 |
Balance, end of year | 51,310 | 17,009 |
Properties under development | As Restated | ||
Investment Properties: | ||
Balance, beginning of year | 17,009 | |
Balance, end of year | 17,009 | |
Land held for development | ||
Investment Properties: | ||
Balance, beginning of year | 3,984 | 18,884 |
Capital expenditures: Developments or expansions | 66 | |
Acquisitions | 24,939 | 1,232 |
Transfers to properties under development | (4,267) | |
Fair value gains(losses), net | 557 | 1,253 |
Foreign currency translation, net | (514) | 196 |
Classified as assets held for sale | (13,380) | |
Balance, end of year | 28,966 | 3,984 |
Land held for development | As Restated | ||
Investment Properties: | ||
Balance, beginning of year | $ 3,984 | 18,884 |
Balance, end of year | $ 3,984 |
INVESTMENT PROPERTIES - Disposi
INVESTMENT PROPERTIES - Dispositions (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019CAD ($)property | Dec. 31, 2018property | |
Fair value | ||
Number of properties disposed | property | 13 | |
Gross proceeds | $ | $ 105,765 | |
At fair value [member] | ||
Fair value | ||
Number of properties disposed | property | 13 | 16 |
Gross proceeds | $ | $ 105,800 | |
Fair value gains excluding properties sold | $ | $ 243,800 | |
Assets held for sale | At fair value [member] | ||
Fair value | ||
Number of investment properties | property | 0 |
INVESTMENT PROPERTIES - Fair va
INVESTMENT PROPERTIES - Fair value methodology (Details) | 12 Months Ended |
Dec. 31, 2019yr | |
INVESTMENT PROPERTIES | |
General period of discounting the expected future cash flows | 10 years |
Year of application of capitalization rate to the estimated cash flows in that year | 11 |
INVESTMENT PROPERTIES - Net str
INVESTMENT PROPERTIES - Net straight-line rent receivable (Details) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
INVESTMENT PROPERTIES | ||
Net straight-line rent receivable | $ 18.9 | $ 14.8 |
INVESTMENT PROPERTIES - Minimum
INVESTMENT PROPERTIES - Minimum rental commitments payable on non-cancellable operating leases (Details) $ in Thousands | Dec. 31, 2019CAD ($) |
Investment Properties: | |
Minimum rental commitments on non-cancellable tenant operating leases | $ 1,963,691 |
2020 | |
Investment Properties: | |
Minimum rental commitments on non-cancellable tenant operating leases | 267,967 |
2021 | |
Investment Properties: | |
Minimum rental commitments on non-cancellable tenant operating leases | 262,063 |
2022 | |
Investment Properties: | |
Minimum rental commitments on non-cancellable tenant operating leases | 247,796 |
2023 | |
Investment Properties: | |
Minimum rental commitments on non-cancellable tenant operating leases | 218,757 |
2024 | |
Investment Properties: | |
Minimum rental commitments on non-cancellable tenant operating leases | 148,423 |
2025 and thereafter | |
Investment Properties: | |
Minimum rental commitments on non-cancellable tenant operating leases | $ 818,685 |
INVESTMENT PROPERTIES - Key val
INVESTMENT PROPERTIES - Key valuation metrics by country (Details) - Income-producing properties | Dec. 31, 2019 | Dec. 31, 2018 |
Maximum | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 10.00% | 10.00% |
Maximum | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 9.75% | 10.00% |
Minimum | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 4.70% | 5.00% |
Minimum | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 5.00% | 5.00% |
Weighted average | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 6.60% | 6.90% |
Weighted average | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 6.32% | 6.81% |
Canada | Maximum | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 8.75% | 7.75% |
Canada | Maximum | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 8.00% | 7.00% |
Canada | Minimum | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 5.25% | 5.00% |
Canada | Minimum | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 5.00% | 5.00% |
Canada | Weighted average | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 5.90% | 5.63% |
Canada | Weighted average | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 5.55% | 6.01% |
United States | Maximum | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 9.50% | 10.00% |
United States | Maximum | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 8.75% | 9.75% |
United States | Minimum | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 5.00% | 5.75% |
United States | Minimum | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 5.25% | 5.25% |
United States | Weighted average | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 6.41% | 6.68% |
United States | Weighted average | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 6.23% | 6.46% |
Germany | Maximum | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 8.25% | 8.25% |
Germany | Maximum | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 8.75% | 8.75% |
Germany | Minimum | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 5.70% | 5.70% |
Germany | Minimum | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 5.00% | 5.25% |
Germany | Weighted average | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 6.83% | 6.89% |
Germany | Weighted average | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 6.31% | 6.89% |
Austria | Maximum | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 10.00% | 10.00% |
Austria | Maximum | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 9.75% | 10.00% |
Austria | Minimum | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 7.00% | 8.00% |
Austria | Minimum | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 6.75% | 7.00% |
Austria | Weighted average | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 7.96% | 8.37% |
Austria | Weighted average | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 7.34% | 7.88% |
Netherlands | Maximum | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 6.00% | 6.50% |
Netherlands | Maximum | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 7.55% | 7.45% |
Netherlands | Minimum | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 4.70% | 5.70% |
Netherlands | Minimum | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 5.60% | 6.00% |
Netherlands | Weighted average | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 5.24% | 5.93% |
Netherlands | Weighted average | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 6.14% | 6.48% |
Other | Maximum | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 10.00% | 9.50% |
Other | Maximum | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 9.75% | 10.00% |
Other | Minimum | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 7.25% | 6.75% |
Other | Minimum | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 6.25% | 6.75% |
Other | Weighted average | Discount rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 8.25% | 8.23% |
Other | Weighted average | Terminal capitalization rate | ||
Investment Properties: | ||
Key valuation metrics (as a percent) | 8.20% | 8.48% |
INVESTMENT PROPERTIES - Sensiti
INVESTMENT PROPERTIES - Sensitivity (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Discount rate | |
Investment Properties: | |
Fair value at +50 basis points | $ 4,214,326 |
Fair value at +25 basis points | 4,292,338 |
Fair value at base rate | 4,377,623 |
Fair value at -25 basis points | 4,460,971 |
Fair value at -50 basis points | 4,546,335 |
Change in fair value at +50 basis points | (163,297) |
Change in fair value at +25 basis points | (85,285) |
Change in fair value at -25 basis points | 83,348 |
Change in fair value at -50 basis points | 168,712 |
Terminal capitalization rate | |
Investment Properties: | |
Fair value at +50 basis points | 4,183,724 |
Fair value at +25 basis points | 4,276,122 |
Fair value at base rate | 4,377,623 |
Fair value at -25 basis points | 4,487,427 |
Fair value at -50 basis points | 4,607,420 |
Change in fair value at +50 basis points | (193,899) |
Change in fair value at +25 basis points | (101,501) |
Change in fair value at -25 basis points | 109,804 |
Change in fair value at -50 basis points | $ 229,797 |
ASSETS HELD FOR SALE AND DISP_3
ASSETS HELD FOR SALE AND DISPOSITIONS - Assets held for sale (Details) - CAD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS HELD FOR SALE AND DISPOSITIONS | ||
Fair value | $ 44,238 | $ 391,453 |
Assets held for sale | ||
ASSETS HELD FOR SALE AND DISPOSITIONS | ||
Fair value | $ 44,200 |
ASSETS HELD FOR SALE AND DISP_4
ASSETS HELD FOR SALE AND DISPOSITIONS - Disposals (Details) $ in Thousands, $ in Millions | Dec. 04, 2019CAD ($) | Nov. 04, 2019CAD ($) | Sep. 20, 2019CAD ($) | Feb. 27, 2019CAD ($) | Feb. 25, 2019CAD ($)property | Feb. 25, 2019USD ($)property | Jan. 15, 2019CAD ($) | Dec. 31, 2019CAD ($)property |
ASSETS HELD FOR SALE AND DISPOSITIONS | ||||||||
Number of properties disposed | property | 13 | |||||||
Sale price | $ 105,765 | |||||||
Brampton, ON | ||||||||
ASSETS HELD FOR SALE AND DISPOSITIONS | ||||||||
Sale price | $ 13,380 | |||||||
Iowa properties | ||||||||
ASSETS HELD FOR SALE AND DISPOSITIONS | ||||||||
Number of properties disposed | property | 4 | 4 | ||||||
Sale price | $ 22,300 | $ 16.9 | ||||||
Williamsburg, IA | ||||||||
ASSETS HELD FOR SALE AND DISPOSITIONS | ||||||||
Sale price | $ 22,323 | |||||||
Richmond Hill, ON | ||||||||
ASSETS HELD FOR SALE AND DISPOSITIONS | ||||||||
Sale price | $ 8,050 | |||||||
Toronto, ON | ||||||||
ASSETS HELD FOR SALE AND DISPOSITIONS | ||||||||
Sale price | $ 13,150 | |||||||
Aurora, ON | ||||||||
ASSETS HELD FOR SALE AND DISPOSITIONS | ||||||||
Sale price | $ 10,010 | |||||||
Alto, MI | ||||||||
ASSETS HELD FOR SALE AND DISPOSITIONS | ||||||||
Sale price | $ 38,852 |
ASSETS HELD FOR SALE AND DISP_5
ASSETS HELD FOR SALE AND DISPOSITIONS - Disposals - Additional Information (Details) $ in Thousands, $ in Millions | Feb. 25, 2019CAD ($)property | Feb. 25, 2019USD ($)property | Dec. 31, 2019CAD ($)property | Dec. 31, 2018CAD ($) |
ASSETS HELD FOR SALE AND DISPOSITIONS | ||||
Gross proceeds | $ | $ 105,765 | |||
Number of properties disposed | property | 13 | |||
Mortgage receivable proceeds | $ | $ 16,845 | $ 30,000 | ||
Iowa properties | ||||
ASSETS HELD FOR SALE AND DISPOSITIONS | ||||
Gross proceeds | $ 22,300 | $ 16.9 | ||
Number of properties disposed | property | 4 | 4 | ||
Mortgage receivable proceeds | $ 16,800 | $ 12.7 | ||
Interest rate | 5.25% | 5.25% |
ASSETS HELD FOR SALE AND DISP_6
ASSETS HELD FOR SALE AND DISPOSITIONS - Fair value changes (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of fair value changes in properties classified as assets held for sale | ||
Balance, beginning of year | $ 44,238 | $ 391,453 |
Fair value gains, net | 1,669 | 196 |
Foreign currency translation, net | (1,262) | (3,466) |
Disposals | (105,765) | (729,608) |
Classified as assets held for sale from investment properties (note 4) | $ 61,120 | 385,671 |
Other | (8) | |
Balance, end of year | $ 44,238 |
ASSETS HELD FOR SALE AND DISP_7
ASSETS HELD FOR SALE AND DISPOSITIONS - Fair value changes - Additional Information (Details) - CAD ($) $ in Thousands | 4 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
ASSETS HELD FOR SALE AND DISPOSITIONS | |||
Broker commissions, legal and advisory costs | $ 3,000 | $ 6,900 | |
Loss on sale of investment properties | 3,045 | 6,871 | |
Change in consumer price index inflation factor | $ (1,400) | $ 441 | $ 400 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
OTHER ASSETS | ||
Deferred financing costs associated with the revolving credit facility | $ 885 | $ 1,172 |
Long-term receivables | 388 | 448 |
Long-term proceeds receivable associated with a property disposal | 11,805 | |
Other assets | $ 1,273 | $ 13,425 |
CURRENT ASSETS - Additional Inf
CURRENT ASSETS - Additional Information (Details) $ in Thousands, $ in Millions | Dec. 31, 2019CAD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018CAD ($) | Dec. 31, 2018USD ($) |
Disclosure of detailed information about borrowings [line items] | ||||
Long-term proceeds receivable associated with a property disposal | $ 11,805 | |||
Accounts receivable | 11,805 | |||
Property at 120 moon acres road | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Long-term proceeds receivable associated with a property disposal | $ 11,700 | $ 9 | 11,800 | $ 8.7 |
Accounts receivable | $ 11,700 | $ 9 | $ 11,800 | $ 8.7 |
CURRENT ASSETS - Changes in pro
CURRENT ASSETS - Changes in proceeds receivable (Details) - CAD ($) $ in Thousands | 4 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
CURRENT ASSETS | |||
Balance, December 31, 2018 | $ 11,805 | ||
Change in consumer price index inflation factor | $ (1,400) | 441 | $ 400 |
Foreign currency translation | (596) | ||
Balance, December 31, 2019 | $ 11,805 | $ 11,650 | $ 11,805 |
UNSECURED DEBT AND CROSS CURR_3
UNSECURED DEBT AND CROSS CURRENCY INTEREST RATE SWAPS (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Unsecured debentures and term loans, net | ||
Amortized Cost | $ 1,186,994 | $ 1,198,414 |
Principal issued and outstanding | 1,189,816 | 1,202,414 |
2021 Debentures | ||
Unsecured debentures and term loans, net | ||
Amortized Cost | 249,646 | 249,424 |
Principal issued and outstanding | 250,000 | 250,000 |
2023 Debentures | ||
Unsecured debentures and term loans, net | ||
Amortized Cost | 398,746 | 398,425 |
Principal issued and outstanding | 400,000 | 400,000 |
2024 Term Loan | ||
Unsecured debentures and term loans, net | ||
Amortized Cost | 239,153 | 251,853 |
Principal issued and outstanding | 239,816 | 252,414 |
2026 Term Loan | ||
Unsecured debentures and term loans, net | ||
Amortized Cost | 299,449 | 298,712 |
Principal issued and outstanding | $ 300,000 | $ 300,000 |
UNSECURED DEBT AND CROSS CURR_4
UNSECURED DEBT AND CROSS CURRENCY INTEREST RATE SWAPS - 2021 Debentures (Details) - CAD ($) $ in Thousands | Jul. 03, 2014 | Dec. 31, 2019 | Dec. 31, 2018 |
Unsecured debentures and term loans, net | |||
Principal issued and outstanding | $ 1,189,816 | $ 1,202,414 | |
2021 Debentures | |||
Unsecured debentures and term loans, net | |||
Principal issued and outstanding | $ 250,000 | $ 250,000 | |
2021 Debentures | Granite LP | |||
Unsecured debentures and term loans, net | |||
Principal issued and outstanding | $ 250,000 | ||
Interest rate | 3.788% | ||
Deferred financing costs | $ 1,600 | ||
Redemption percentage | 100.00% | ||
Redemption spread (in percent) | 0.46% | ||
Redemption period of debentures | 30 days |
UNSECURED DEBT AND CROSS CURR_5
UNSECURED DEBT AND CROSS CURRENCY INTEREST RATE SWAPS - 2023 Debentures (Details) - CAD ($) $ in Thousands | Dec. 20, 2016 | Dec. 31, 2019 | Dec. 31, 2018 |
Unsecured debentures and term loans, net | |||
Principal issued and outstanding | $ 1,189,816 | $ 1,202,414 | |
2023 Debentures | |||
Unsecured debentures and term loans, net | |||
Principal issued and outstanding | $ 400,000 | $ 400,000 | |
2023 Debentures | Granite LP | |||
Unsecured debentures and term loans, net | |||
Principal issued and outstanding | $ 400,000 | ||
Interest rate | 3.873% | ||
Deferred financing costs | $ 2,200 | ||
Redemption percentage | 100.00% | ||
Redemption spread (in percent) | 0.625% | ||
Redemption period of debentures | 30 days |
UNSECURED DEBT AND CROSS CURR_6
UNSECURED DEBT AND CROSS CURRENCY INTEREST RATE SWAPS - 2024 Term Loan (Details) $ in Thousands, $ in Millions | Dec. 19, 2018USD ($) | Dec. 31, 2019CAD ($) | Oct. 10, 2019USD ($) | Dec. 31, 2018CAD ($) | Dec. 19, 2018CAD ($) |
Unsecured debentures and term loans, net | |||||
Principal issued and outstanding | $ 1,189,816 | $ 1,202,414 | |||
2024 Term Loan | |||||
Unsecured debentures and term loans, net | |||||
Principal issued and outstanding | $ 239,816 | $ 252,414 | |||
2024 Term Loan | Granite LP | |||||
Unsecured debentures and term loans, net | |||||
Principal issued and outstanding | $ 185 | ||||
Proceeds from term loan | $ 185 | ||||
Deferred financing costs | $ 800 |
UNSECURED DEBT AND CROSS CURR_7
UNSECURED DEBT AND CROSS CURRENCY INTEREST RATE SWAPS - 2026 Term Loan (Details) - CAD ($) $ in Thousands | Dec. 12, 2018 | Dec. 31, 2019 | Nov. 27, 2019 | Dec. 31, 2018 |
Unsecured debentures and term loans, net | ||||
Principal issued and outstanding | $ 1,189,816 | $ 1,202,414 | ||
2026 Term Loan | ||||
Unsecured debentures and term loans, net | ||||
Principal issued and outstanding | 300,000 | $ 300,000 | ||
2026 Term Loan | Granite LP | ||||
Unsecured debentures and term loans, net | ||||
Principal issued and outstanding | $ 300,000 | |||
Proceeds from term loan | $ 300,000 | |||
Deferred financing costs | $ 1,500 | |||
Gain (loss) on debt modification | $ (700) |
UNSECURED DEBT AND CROSS CURR_8
UNSECURED DEBT AND CROSS CURRENCY INTEREST RATE SWAPS - Cross Currency Interest Rate Swaps (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure of detailed information about borrowings [line items] | ||
Cross Currency Interest Rate Swap - fair value | $ 30,365 | $ 104,757 |
2021 Cross Currency Interest Rate Swap | 2021 Debentures | ||
Disclosure of detailed information about borrowings [line items] | ||
Cross Currency Interest Rate Swap - fair value | 3,630 | 26,877 |
2022 Cross Currency Interest Rate Swap | 2022 Term Loan | ||
Disclosure of detailed information about borrowings [line items] | ||
Cross Currency Interest Rate Swap - fair value | 3,826 | |
2023 Cross Currency Interest Rate Swap | 2023 Debentures | ||
Disclosure of detailed information about borrowings [line items] | ||
Cross Currency Interest Rate Swap - fair value | 24,298 | 56,922 |
2024 Cross Currency Interest Rate Swap | 2024 Term Loan | ||
Disclosure of detailed information about borrowings [line items] | ||
Cross Currency Interest Rate Swap - fair value | 1,202 | |
2025 Cross Currency Interest Rate Swap | 2025 Term Loan | ||
Disclosure of detailed information about borrowings [line items] | ||
Cross Currency Interest Rate Swap - fair value | $ 17,132 | |
2026 Cross Currency Interest Rate Swap | 2026 Term Loan | ||
Disclosure of detailed information about borrowings [line items] | ||
Cross Currency Interest Rate Swap - fair value | $ 1,235 |
UNSECURED DEBT AND CROSS CURR_9
UNSECURED DEBT AND CROSS CURRENCY INTEREST RATE SWAPS - Cross Currency Interest Rate Swaps - Additional information (Details) $ in Thousands, € in Millions, $ in Millions | Dec. 12, 2018CAD ($) | Dec. 31, 2019CAD ($) | Dec. 31, 2018CAD ($) | Dec. 19, 2018 | Dec. 12, 2018USD ($) | Dec. 12, 2018EUR (€) | Dec. 20, 2016CAD ($) | Dec. 20, 2016EUR (€) | Jul. 03, 2014CAD ($) | Jul. 03, 2014EUR (€) |
Disclosure of detailed information about borrowings [line items] | ||||||||||
Principal issued and outstanding | $ 1,189,816 | $ 1,202,414 | ||||||||
Gain loss on debt modification | 1,192 | (562) | ||||||||
Payments towards settlement of cross currency swaps | 6,825 | |||||||||
2021 Debentures | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Principal issued and outstanding | 250,000 | 250,000 | ||||||||
2023 Debentures | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Principal issued and outstanding | 400,000 | 400,000 | ||||||||
2024 Term Loan | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Principal issued and outstanding | 239,816 | 252,414 | ||||||||
2026 Term Loan | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Principal issued and outstanding | 300,000 | $ 300,000 | ||||||||
2021 Cross Currency Interest Rate Swap | 2021 Debentures | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Interest rate on CAD | 3.788% | 3.788% | ||||||||
Fixed interest rate on EUR | 2.68% | 2.68% | ||||||||
2021 Cross Currency Interest Rate Swap | 2021 Debentures | July 5 2021 | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Exchange of principal proceeds | € | € 171.9 | |||||||||
Principal issued and outstanding | $ 250,000 | |||||||||
2022 Cross Currency Interest Rate Swap | 2022 Term Loan | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Fixed interest rate on EUR | 1.225% | |||||||||
2023 Cross Currency Interest Rate Swap | 2023 Debentures | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Interest rate on CAD | 3.873% | 3.873% | ||||||||
Fixed interest rate on EUR | 2.43% | 2.43% | ||||||||
2023 Cross Currency Interest Rate Swap | 2023 Debentures | November 30, 2023 | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Exchange of principal proceeds | € | € 281.1 | |||||||||
Principal issued and outstanding | $ 400,000 | |||||||||
2024 Cross Currency Interest Rate Swap | 2024 Term Loan | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Fixed interest rate on EUR | 0.522% | |||||||||
Gain loss on debt modification | $ 2,000 | |||||||||
2024 Cross Currency Interest Rate Swap | 2024 Term Loan | December 19, 2024 | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Exchange of principal proceeds | € | € 168.2 | |||||||||
Principal issued and outstanding | $ 185 | |||||||||
2025 Cross Currency Interest Rate Swap | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Payments towards settlement of cross currency swaps | $ 6,800 | |||||||||
2025 Cross Currency Interest Rate Swap | 2025 Term Loan | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Fixed interest rate on EUR | 2.202% | 2.202% | 2.202% | |||||||
2026 Cross Currency Interest Rate Swap | 2026 Term Loan | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Fixed interest rate on EUR | 1.355% | 1.355% | 1.355% | |||||||
2026 Cross Currency Interest Rate Swap | 2026 Term Loan | December 11, 2026 | ||||||||||
Disclosure of detailed information about borrowings [line items] | ||||||||||
Exchange of principal proceeds | € | € 205.5 | |||||||||
Principal issued and outstanding | $ 300,000 |
CURRENT LIABILITIES - Bank Inde
CURRENT LIABILITIES - Bank Indebtedness (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 01, 2018 |
CURRENT LIABILITIES | |||
Outstanding borrowings | $ 1,217,359 | $ 1,303,171 | |
Credit Facility | |||
CURRENT LIABILITIES | |||
Borrowing capacity | $ 500,000 | ||
Percentage of minimum aggregate amount | 66.66% | ||
Additional borrowing capacity | $ 100,000 | ||
Drawn from credit facility | 0 | 0 | |
Letters of credit | |||
CURRENT LIABILITIES | |||
Outstanding borrowings | $ 1,000 | $ 100 |
CURRENT LIABILITIES - Accounts
CURRENT LIABILITIES - Accounts Payable and Accrued Liabilities (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Payable and Accrued Liabilities | ||
Accounts payable | $ 6,840 | $ 5,352 |
Accrued salaries, incentives and benefits | 5,416 | 5,364 |
Accrued interest payable | 6,507 | 6,606 |
Accrued construction payable | 5,933 | 2,429 |
Accrued professional fees | 3,822 | 2,910 |
Accrued employee unit-based compensation | 5,586 | 3,193 |
Accrued trustee/director unit-based compensation | 3,301 | 2,330 |
Accrued property operating costs | 6,376 | 2,013 |
Accrued land transfer tax in connection with an acquisition | 5,499 | |
Accrued leasing commissions | 177 | 407 |
Accrual associated with a property disposal | 1,944 | 2,047 |
Other accrued liabilities | 4,281 | 3,817 |
Total accounts payable and accrued liabilities | $ 50,183 | $ 41,967 |
CURRENT LIABILITIES - Disposal
CURRENT LIABILITIES - Disposal of a property (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current liabilities | ||
Accrual associated with a property disposal | $ 1,944 | $ 2,047 |
Property At120 Moon Acres Road [Member] | ||
Current liabilities | ||
Accrual associated with a property disposal | $ 1,900 | $ 2,000 |
DISTRIBUTIONS TO STAPLED UNIT_3
DISTRIBUTIONS TO STAPLED UNITHOLDERS (Details) - CAD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Feb. 29, 2020 | Jan. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Distributions to stapled unitholders | ||||||
Distributions payable | $ 13,081 | $ 24,357 | $ 13,081 | $ 24,357 | ||
Monthly distributions paid and payable in cash | 136,897 | 125,131 | ||||
Distributions paid | 139,481 | $ 138,861 | ||||
Special distribution payable in cash and stapled units per stapled units | $ 1.20 | |||||
Normal Course Issuer Bid | ||||||
Distributions to stapled unitholders | ||||||
Increase Decrease In Contributed Surplus | 41,100 | |||||
Distributions | ||||||
Distributions to stapled unitholders | ||||||
Distributions payable | $ 13,100 | $ 13,100 | 10,600 | $ 10,600 | ||
Distributions declared per stapled unit | $ 24.2 | $ 24.2 | $ 24.2 | |||
Special distribution | ||||||
Distributions to stapled unitholders | ||||||
Distributions declared per stapled unit | $ 0.90 | |||||
Distributions paid | $ 41,128 | |||||
Stapled Unitholders' Equity | ||||||
Distributions to stapled unitholders | ||||||
Monthly distributions paid and payable in cash | $ 139,331 | $ 125,131 | ||||
Distributions declared per stapled unit | $ 2.81 | $ 2.73 | ||||
Distributions paid | $ 139,331 | $ 138,841 | ||||
Stapled Unitholders' Equity | Special distribution | ||||||
Distributions to stapled unitholders | ||||||
Distributions payable | $ 13,710 | $ 13,710 | ||||
Distributions declared per stapled unit | $ 30 | $ 0.30 | ||||
Distributions payable | $ 13,700 | $ 13,700 |
STAPLED UNITHOLDERS' EQUITY - S
STAPLED UNITHOLDERS' EQUITY - Stapled Units (Details) | Jan. 03, 2013shares |
Granite REIT | |
Disclosure of detailed information about business combination [line items] | |
Number of Units per Stapled Unit (in units) | 1 |
Granite GP | |
Disclosure of detailed information about business combination [line items] | |
Number of Common Shares per Stapled Unit (in shares) | 1 |
STAPLED UNITHOLDERS' EQUITY - I
STAPLED UNITHOLDERS' EQUITY - Incentive Stock Option Plan (Details) - Option | Dec. 31, 2019 | Dec. 31, 2018 |
Incentive Stock Option Plan | ||
Unit-based Compensation | ||
Options outstanding | 0 | 0 |
STAPLED UNITHOLDERS' EQUITY - D
STAPLED UNITHOLDERS' EQUITY - Director/Trustee Deferred Share Unit Plan (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Director/Trustee Deferred Share Unit Plan | |
Executive Deferred Stapled Unit Plan | |
Maximum percent of deferral of each non-employee director's total annual remuneration | 100.00% |
STAPLED UNITHOLDERS' EQUITY -_2
STAPLED UNITHOLDERS' EQUITY - Director/Trustee Deferred Share Unit Plan - Reconciliation of the changes (Details) - Director/Trustee Deferred Share Unit Plan EquityInstruments in Thousands | 12 Months Ended | |
Dec. 31, 2019EquityInstruments$ / shares | Dec. 31, 2018EquityInstruments$ / shares | |
Executive Deferred Stapled Unit Plan | ||
Outstanding, Number, beginning balance | EquityInstruments | 44 | 28 |
Granted, Number | EquityInstruments | 17 | 16 |
Settled, Number | EquityInstruments | (11) | |
Outstanding, Number, ending balance | EquityInstruments | 50 | 44 |
Outstanding, Weighted Average Grant Date Fair Value, beginning balance | $ / shares | $ 46.01 | $ 41.88 |
New Grants, Weighted Average Grant Date Fair Value | $ / shares | 55.59 | 53.11 |
Settled, Weighted Average Grant Date Fair Value | $ / shares | 51.57 | |
Outstanding, Weighted Average Grant Date Fair Value, ending balance | $ / shares | $ 48.01 | $ 46.01 |
STAPLED UNITHOLDERS' EQUITY - E
STAPLED UNITHOLDERS' EQUITY - Executive Deferred Stapled Unit Plan (Details) - Executive Deferred Stapled Unit Plan shares in Millions | 12 Months Ended |
Dec. 31, 2019shares | |
Disclosure of terms and conditions of share-based payment arrangement | |
Number of preceding trading days in Toronto Stock Exchange or New York Stock Exchange | 5 days |
Percentage of vesting of the number of stapled units | 100.00% |
Maximum | |
Disclosure of terms and conditions of share-based payment arrangement | |
Number of stapled units which may be issued | 1 |
Settlement period | 60 days |
STAPLED UNITHOLDERS' EQUITY -_3
STAPLED UNITHOLDERS' EQUITY - Executive Deferred Stapled Unit Plan - Reconciliation of the changes (Details) | 12 Months Ended | |
Dec. 31, 2019EquityInstruments$ / shares | Dec. 31, 2018EquityInstruments$ / shares | |
Executive Deferred Stapled Unit Plan | ||
Executive Deferred Stapled Unit Plan | ||
Outstanding, Number, beginning balance | 117,000 | 106,000 |
New grants — RSUs and PSUs | 85,000 | 75,000 |
Forfeited, Number | (2,000) | |
Outstanding, Number, ending balance | 145,000 | 117,000 |
Outstanding, Weighted Average Grant Date Fair Value, beginning balance | $ / shares | $ 50.34 | $ 43.32 |
New grants — RSUs and PSUs , Weighted Average Grant Date Fair Value | $ / shares | 61.90 | 53.29 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 64.16 | |
Outstanding, Weighted Average Grant Date Fair Value, ending balance | $ / shares | $ 55.93 | $ 50.34 |
Executive Deferred Stapled Unit Plan | Cash settlement | ||
Executive Deferred Stapled Unit Plan | ||
Settled, Number | (35,000) | |
Settled, Weighted Average Grant Date Fair Value | $ / shares | $ 52.91 | |
Executive Deferred Stapled Unit Plan | Settled in shares stapled units | ||
Executive Deferred Stapled Unit Plan | ||
Settled, Number | (20,000) | (64,000) |
Settled, Weighted Average Grant Date Fair Value | $ / shares | $ 52.91 | $ 42.14 |
Performance based units | ||
Executive Deferred Stapled Unit Plan | ||
Outstanding, Number, beginning balance | 3,730 | |
New grants — RSUs and PSUs | 24,587 | 3,730 |
Outstanding, Number, ending balance | 28,317 | 3,730 |
STAPLED UNITHOLDERS' EQUITY -_4
STAPLED UNITHOLDERS' EQUITY - Disclosure Of Assumptions Used For Fair Value Calculation Of Performance Stock Units (Details) - Stapled Units Performance Stock 2019 | 9 Months Ended | 12 Months Ended |
Dec. 31, 2019yr | Dec. 31, 2019shares | |
Disclosure Of Assumptions Used For Fair Value Calculation Of Performance Stock Units [Line Items] | ||
Grant Date | January 1, August 12, September 24, 2019 and November 16, 2018 | |
PSUs granted | shares | 28,317 | |
Term to expiry | yr | 2 | |
Weighted average volatility rate | 14.80% | |
Average volatility rate | 15.10% | |
Risk free interest rate | 1.72% |
STAPLED UNITHOLDERS' EQUITY -_5
STAPLED UNITHOLDERS' EQUITY - Disclosure Of Assumptions Used For Fair Value Calculation Of Performance Stock Units (Details) - Fair Value Of The PSU Granded (Details) $ in Millions | Dec. 31, 2019CAD ($) |
Performance based units | Stapled Units Performance Stock 2019 | |
Disclosure Of Assumptions Used For Fair Value Calculation Of Performance Stock Units [Line Items] | |
Weighted average fair value at measurement date, other equity instruments granted | $ 1.9 |
STAPLED UNITHOLDERS' EQUITY - T
STAPLED UNITHOLDERS' EQUITY - Trust's unit-based compensation expense (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Unit-based Compensation | ||
Unit-based compensation expense | $ 7,484 | $ 3,944 |
Total fair value remeasurement expense | 1,889 | 500 |
Director/Trustee Deferred Share Unit Plan | ||
Unit-based Compensation | ||
Unit-based compensation expense | 1,645 | 948 |
Total fair value remeasurement expense | 568 | 122 |
Executive Deferred Stapled Unit Plan | ||
Unit-based Compensation | ||
Unit-based compensation expense | 5,839 | 2,996 |
Restricted Stapled Units Plan For Exceutive And Employees | ||
Unit-based Compensation | ||
Total fair value remeasurement expense | $ 1,321 | $ 378 |
STAPLED UNITHOLDERS' EQUITY - N
STAPLED UNITHOLDERS' EQUITY - Normal Course Issuer Bid (Details) - CAD ($) $ in Millions | May 14, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Normal Course Issuer Bid | |||
Maximum number of stapled units issued and outstanding that may be repurchased pursuant to the normal course issuer bid | 4,853,666 | ||
Maximum daily purchases that may be made by Granite | 41,484 | ||
Units repurchased for cancellation | $ 0.1 | $ 63.5 | |
Normal Course Issuer Bid | |||
Normal Course Issuer Bid | |||
Units repurchased (in units) | 1,282,171 | ||
Difference between the repurchase price and the average cost | $ 0.1 | $ 5.6 |
STAPLED UNITHOLDERS' EQUITY -_6
STAPLED UNITHOLDERS' EQUITY - Stapled Unit Offerings (Details) - Issued capital - CAD ($) $ / shares in Units, $ in Millions | Oct. 31, 2019 | Apr. 30, 2019 | Dec. 31, 2019 |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Stappled units offering units | 4,600,000 | 3,749,000 | 8,349,000 |
Price per unit issued | $ 64 | $ 61.50 | |
Proceeds from units issue | $ 294.4 | $ 230.6 | |
Issuance costs of units | $ 12.8 | $ 10.2 | |
Underwriter over allotment option | |||
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Stappled units offering units | 600,000 | 489,000 |
STAPLED UNITHOLDERS' EQUITY - A
STAPLED UNITHOLDERS' EQUITY - Accumulated Other Comprehensive Income (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
STAPLED UNITHOLDERS' EQUITY | ||
Foreign currency translation gains on investments in subsidiaries, net of related hedging activities and non-controlling interests | $ 159,499 | $ 320,158 |
Fair value losses on derivatives designated as net investment hedges | (43,309) | (108,706) |
Accumulated Other Comprehensive Income | $ 116,190 | $ 211,452 |
RENTAL REVENUE, RECOVERIES, C_3
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES - Tenant recoveries revenue (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Rental revenue [Abstract] | ||
Base rent | $ 240,345 | $ 221,114 |
Straight-line rent amortization | 5,074 | 4,274 |
Tenant incentive amortization | (5,122) | (5,402) |
Property tax recoveries | 22,280 | 19,344 |
Property insurance recoveries | 2,161 | 2,174 |
Operating cost recoveries | 8,085 | 4,983 |
Total rental revenue | $ 272,823 | $ 246,487 |
RENTAL REVENUE, RECOVERIES, C_4
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES - Property operating costs (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property operating costs | ||
Property operating costs | $ 35,364 | $ 30,942 |
Non-recoverable from tenants: | ||
Property operating costs | ||
Property taxes and utilities | 1,096 | 1,077 |
Legal | 189 | 436 |
Consulting | 90 | 123 |
Environmental and appraisals | 511 | 702 |
Repairs and maintenance | 804 | 725 |
Ground rents | 664 | |
Other | 558 | 730 |
Property operating costs | 3,248 | 4,457 |
Recoverable from tenants: | ||
Property operating costs | ||
Property taxes and utilities | 23,784 | 20,127 |
Property insurance | 2,391 | 2,138 |
Repairs and maintenance | 2,733 | 2,069 |
Property management fees | 2,001 | 1,470 |
Other | 1,207 | 681 |
Property operating costs | $ 32,116 | $ 26,485 |
RENTAL REVENUE, RECOVERIES, C_5
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES - General and administrative expenses (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES | ||
Salaries, incentives and benefits | $ 13,753 | $ 16,030 |
Audit, legal and consulting | 4,268 | 3,972 |
Trustee/director fees including distributions and revaluations and expenses | 1,976 | 1,285 |
RSU and PSU compensation expense including distributions and revaluations | 5,839 | 2,996 |
Other public entity costs | 2,096 | 1,651 |
Office rents including property taxes and common area maintenance costs | 379 | 900 |
Other | 3,108 | 2,570 |
General and administrative expenses | $ 31,419 | $ 29,404 |
RENTAL REVENUE, RECOVERIES, C_6
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES - Interest expense and other financing costs (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES | ||
Interest and amortized issuance costs relating to debentures and term loans | $ 26,632 | $ 18,544 |
Amortization of deferred financing costs and other interest expense and accretion charges | 2,169 | 3,869 |
Interest expense related to lease obligations | 1,300 | |
Interest expense and other finance costs | 30,101 | 22,413 |
Less: Capitalized interest | (160) | |
Interest expense and other finance costs | $ 29,941 | $ 22,413 |
RENTAL REVENUE, RECOVERIES, C_7
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES - Foreign exchange (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2018CAD ($)property | Dec. 31, 2019CAD ($)property | Dec. 31, 2018CAD ($)contract | |
Disclosure of detailed information about financial instruments | |||
Foreign exchange gain (loss) | $ (1,633) | $ 9,390 | |
Number of properties disposed | property | 13 | ||
Investment properties sold in January 2018 | |||
Disclosure of detailed information about financial instruments | |||
Foreign exchange gain (loss) | $ 8,500 | ||
Number of properties disposed | property | 3 | ||
Interest rate swap contract | |||
Disclosure of detailed information about financial instruments | |||
Foreign exchange gain (loss) | $ 1,400 | ||
Number of cross currency swaps settled | contract | 2 |
RENTAL REVENUE, RECOVERIES, C_8
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES - Fair value (gains) losses (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair value losses (gains) on financial instruments | ||
Fair value losses on financial instruments | $ (1,192) | $ 562 |
Cross currency interest rate swaps | 1,192 | (562) |
Foreign exchange forward contracts | ||
Fair value losses (gains) on financial instruments | ||
Fair value losses on financial instruments | 8 | 562 |
Cross currency interest rate swaps | (8) | $ (562) |
Losses on term loan debt modifications | ||
Fair value losses (gains) on financial instruments | ||
Fair value losses on financial instruments | 752 | |
Cross currency interest rate swaps | (752) | |
Cross currency interest rate swaps | ||
Fair value losses (gains) on financial instruments | ||
Fair value losses on financial instruments | 1,952 | |
Cross currency interest rate swaps | $ (1,952) |
RENTAL REVENUE, RECOVERIES, C_9
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES - Settlement agreement (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Settlement agreement | ||
Real estate land transfer tax incurred | $ 2.7 | |
Ontario, Canada | ||
Settlement agreement | ||
Other income | $ 2.3 |
RENTAL REVENUE, RECOVERIES, _10
RENTAL REVENUE, RECOVERIES, COSTS AND EXPENSES - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019CAD ($) | |
Term loan due 2024 | Cross currency interest swaps 2024 | |
Statement [Line Items] | |
Gain Loss On Hedges | $ 2 |
INCOME TAXES - Major components
INCOME TAXES - Major components (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Current income tax: | ||
Current taxes | $ 6,069 | $ 7,902 |
Current taxes referring to previous periods | (1,526) | (973) |
Withholding taxes and other | 528 | 702 |
Total current income tax | 5,071 | 7,631 |
Deferred income tax: | ||
Origination and reversal of temporary differences | 41,140 | 56,423 |
Impact of changes in tax rates | (1,678) | (4,637) |
- Current tax expense | (12) | (6,408) |
- Deferred tax expense | (285) | (200) |
Withholding taxes on profits of subsidiaries | (388) | 85 |
Other | (1,181) | (243) |
Total deferred income tax | 37,596 | 45,020 |
Total income tax expense | $ 42,667 | 52,651 |
Schleiz, Germany | ||
Current income tax: | ||
Total current income tax | $ 200 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Canadian statutory rate and the effective income tax rate (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of accounting profit multiplied by applicable tax rates | ||
Income before income taxes | $ 424,942 | $ 518,008 |
Tax rate (in percent) | 26.50% | 26.50% |
Expected income taxes at the Canadian statutory tax rate of 26.5% (2018 - 26.5%) | $ 112,610 | $ 137,272 |
Income distributed and taxable to unitholders | (59,966) | (81,272) |
Net foreign rate differentials | (7,526) | (7,830) |
Net change in provisions for uncertain tax positions | 72 | 810 |
Net permanent differences | 519 | 7,261 |
Net effect of change in tax rates | (1,678) | (4,637) |
Withholding taxes and other | (1,364) | 1,047 |
Total income tax expense | $ 42,667 | $ 52,651 |
INCOME TAXES - Deferred tax ass
INCOME TAXES - Deferred tax assets and liabilities (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Temporary differences | ||
Deferred tax assets | $ 4,057 | $ 5,301 |
Deferred tax liabilities | 320,972 | 303,965 |
Investment properties | ||
Temporary differences | ||
Deferred tax assets | 83 | 769 |
Deferred tax liabilities | 323,385 | 304,593 |
Eligible capital expenditures | ||
Temporary differences | ||
Deferred tax assets | 2,270 | 2,441 |
Withholding tax on undistributed subsidiary profits | ||
Temporary differences | ||
Deferred tax liabilities | 134 | 682 |
Other | ||
Temporary differences | ||
Deferred tax assets | 1,704 | 2,091 |
Deferred tax liabilities | $ (2,547) | $ (1,310) |
INCOME TAXES - Changes in net d
INCOME TAXES - Changes in net deferred tax liabilities (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in the net deferred tax liabilities: | ||
Balance, beginning of year | $ 298,664 | $ 238,310 |
Deferred tax expense recognized in net income | 37,596 | 45,020 |
Foreign currency translation of deferred tax balances | (19,345) | 15,334 |
Net deferred tax liabilities, end of year | $ 316,915 | $ 298,664 |
INCOME TAXES - Income tax paid
INCOME TAXES - Income tax paid - (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income tax paid | ||
Income tax paid | $ 3 | $ 10.3 |
Withholding taxes | ||
Income tax paid | ||
Income tax paid | $ 0.4 | $ 0.7 |
INCOME TAXES - Unrecognized tax
INCOME TAXES - Unrecognized tax benefits (Details) - CAD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Unrecognized tax benefits | ||
Unrecognized tax benefits that could impact effective tax rate | $ 11.4 | $ 13.2 |
Unrecognized tax benefits related to accrued interest and penalties | $ 0.3 | $ 0.3 |
INCOME TAXES - Reconciliation_2
INCOME TAXES - Reconciliation of unrecognized tax benefits (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
INCOME TAXES | ||
Unrecognized tax benefits balance, beginning of year | $ 13,197 | $ 12,035 |
Decreases for tax positions of prior years | (3,056) | (1,183) |
Increases for tax positions of current year | 2,090 | 1,898 |
Foreign currency impact | (809) | 447 |
Unrecognized tax benefits balance, end of year | 11,422 | 13,197 |
Maximum possible decrease in unrecognized tax benefits | 2,400 | 2,800 |
Interest and penalties | 100 | $ 100 |
Carryforwards of Canadian capital loss | 36,700 | |
Other losses and deductible temporary differences in various tax jurisdictions | $ 280,000 |
SEGMENTED DISCLOSURE INFORMAT_3
SEGMENTED DISCLOSURE INFORMATION - Revenues (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019CAD ($)segment | Dec. 31, 2018CAD ($)segment | |
Geographic segmentation: | ||
Reportable segments | segment | 1 | 1 |
Revenue | $ 273,678 | $ 247,483 |
Trust's total revenue (in percent) | 100.00% | 100.00% |
Canada | ||
Geographic segmentation: | ||
Revenue | $ 58,952 | $ 54,372 |
Trust's total revenue (in percent) | 22.00% | 22.00% |
United States | ||
Geographic segmentation: | ||
Revenue | $ 108,065 | $ 88,006 |
Trust's total revenue (in percent) | 39.00% | 36.00% |
Austria | ||
Geographic segmentation: | ||
Revenue | $ 63,724 | $ 65,523 |
Trust's total revenue (in percent) | 23.00% | 26.00% |
Germany | ||
Geographic segmentation: | ||
Revenue | $ 26,455 | $ 24,735 |
Trust's total revenue (in percent) | 10.00% | 10.00% |
Netherlands | ||
Geographic segmentation: | ||
Revenue | $ 10,250 | $ 8,621 |
Trust's total revenue (in percent) | 4.00% | 3.00% |
Other Europe | ||
Geographic segmentation: | ||
Revenue | $ 6,232 | $ 6,226 |
Trust's total revenue (in percent) | 2.00% | 3.00% |
SEGMENTED DISCLOSURE INFORMAT_4
SEGMENTED DISCLOSURE INFORMATION - Magna (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of major tenant | ||
Trust's total revenue (in percent) | 100.00% | 100.00% |
Magna | Credit risk | ||
Disclosure of major tenant | ||
Trust's total revenue (in percent) | 47.00% | 61.00% |
SEGMENTED DISCLOSURE INFORMAT_5
SEGMENTED DISCLOSURE INFORMATION - Investment Properties (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Geographic segmentation: | ||
Investment properties | $ 4,457,899 | $ 3,424,978 |
Percentage of investment property | 100.00% | 100.00% |
Canada | ||
Geographic segmentation: | ||
Investment properties | $ 979,290 | $ 708,645 |
Percentage of investment property | 22.00% | 21.00% |
United States | ||
Geographic segmentation: | ||
Investment properties | $ 2,014,489 | $ 1,261,183 |
Percentage of investment property | 45.00% | 37.00% |
Austria | ||
Geographic segmentation: | ||
Investment properties | $ 806,355 | $ 840,803 |
Percentage of investment property | 18.00% | 24.00% |
Germany | ||
Geographic segmentation: | ||
Investment properties | $ 389,077 | $ 385,703 |
Percentage of investment property | 9.00% | 11.00% |
Netherlands | ||
Geographic segmentation: | ||
Investment properties | $ 196,701 | $ 155,778 |
Percentage of investment property | 4.00% | 5.00% |
Other Europe | ||
Geographic segmentation: | ||
Investment properties | $ 71,987 | $ 72,866 |
Percentage of investment property | 2.00% | 2.00% |
DETAILS OF CASH FLOWS - Items n
DETAILS OF CASH FLOWS - Items not involving current cash flows (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
DETAILS OF CASH FLOWS | ||
Straight-line rent amortization | $ (5,074) | $ (4,274) |
Tenant incentive amortization | 5,122 | 5,402 |
Unit-based compensation expense | 7,484 | 3,944 |
Fair value gains on investment properties, net | (245,442) | (354,707) |
Depreciation and amortization | 906 | 300 |
Fair value (gains) losses on financial instruments | (1,192) | 562 |
Loss on sale of investment properties | 3,045 | 6,871 |
Amortization of issuance costs relating to debentures and term loans | 855 | 555 |
Amortization of deferred financing costs | 312 | 497 |
Deferred income taxes | 37,596 | 45,020 |
Other | (195) | 1,040 |
Items not involving current cash flows | $ (196,583) | $ (294,790) |
DETAILS OF CASH FLOWS - Changes
DETAILS OF CASH FLOWS - Changes in working capital balances (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
DETAILS OF CASH FLOWS | ||
Accounts receivable | $ (3,670) | $ (1,626) |
Prepaid expenses and other | (906) | (475) |
Accounts payable and accrued liabilities | (639) | 5,788 |
Deferred revenue | 1,800 | (245) |
Restricted cash | 470 | 335 |
Changes in working capital balances | $ (2,945) | $ 3,777 |
DETAILS OF CASH FLOWS - Non-cas
DETAILS OF CASH FLOWS - Non-cash investing and financing activities (Details) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019CAD ($)propertyshares | Dec. 31, 2018CAD ($)shares | |
Non cash capital contribution by non controlling interest | $ 537 | |
Canada | Investment property completed | ||
Additions to right of use assets | 20,500 | |
Lease liabilities additional right of use assets | $ 20,500 | |
Number of properties acquired during the year on lease | property | 2 | |
Stapled Units | ||
Distributions declared | $ 41,100 | |
Units issued under the stapled unit plan (in units) (note 11 (b)) | shares | 20 | 64 |
Value of stapled units issued | $ 1,200 | $ 3,200 |
Non Cash Contribution | ||
Non cash capital contribution by non controlling interest | $ 400 |
DETAILS OF CASH FLOWS - Cash an
DETAILS OF CASH FLOWS - Cash and cash equivalents (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
DETAILS OF CASH FLOWS | |||
Cash | $ 248,499 | $ 534,975 | |
Short-term deposits | 50,178 | 123,271 | |
Total cash and cash equivalents | $ 298,677 | $ 658,246 | $ 69,019 |
FAIR VALUE AND RISK MANAGEMEN_2
FAIR VALUE AND RISK MANAGEMENT - Fair Value of Financial Instruments (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Carrying value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | $ 335,414 | $ 675,396 |
Financial liabilities | 1,280,623 | 1,369,495 |
Fair value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | 335,414 | 675,396 |
Financial liabilities | 1,301,321 | 1,376,011 |
Unsecured debentures, net | Carrying value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial liabilities | 648,392 | 647,849 |
Unsecured debentures, net | Fair value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial liabilities | 669,090 | 654,365 |
Unsecured term loans, net | Carrying value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial liabilities | 538,602 | 550,565 |
Unsecured term loans, net | Fair value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial liabilities | 538,602 | 550,565 |
Cross currency interest rate swaps | Carrying value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial liabilities | 30,365 | 104,757 |
Cross currency interest rate swaps | Fair value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial liabilities | 30,365 | 104,757 |
Accounts payable and accrued liabilities | Carrying value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial liabilities | 50,156 | 41,957 |
Accounts payable and accrued liabilities | Fair value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial liabilities | 50,156 | 41,957 |
Foreign exchange forward contracts included in accounts payable and accrued liabilities | Carrying value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial liabilities | 27 | 10 |
Foreign exchange forward contracts included in accounts payable and accrued liabilities | Fair value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial liabilities | 27 | 10 |
Distributions payable | Carrying value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial liabilities | 13,081 | 24,357 |
Distributions payable | Fair value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial liabilities | 13,081 | 24,357 |
Other assets | Carrying value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | 388 | 12,253 |
Other assets | Fair value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | 388 | 12,253 |
Other receivable | Carrying value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | 11,650 | |
Other receivable | Fair value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | 11,650 | |
Accounts receivable | Carrying value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | 7,812 | 4,316 |
Accounts receivable | Fair value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | 7,812 | 4,316 |
Prepaid expenses and other | Carrying value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | 120 | 111 |
Prepaid expenses and other | Fair value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | 120 | 111 |
Restricted cash | Carrying value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | 470 | |
Restricted cash | Fair value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | 470 | |
Cash and cash equivalents | Carrying value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | 298,677 | 658,246 |
Cash and cash equivalents | Fair value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | 298,677 | $ 658,246 |
Construction funds in escrow | Carrying value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | 16,767 | |
Construction funds in escrow | Fair value | ||
Disclosure of fair value measurements of assets and liabilities | ||
Financial assets | $ 16,767 |
FAIR VALUE AND RISK MANAGEMEN_3
FAIR VALUE AND RISK MANAGEMENT - Foreign Exchange Forward Contracts (Details) $ in Thousands, € in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2019CAD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2018CAD ($)contract | |
Foreign exchange forward contracts | ||||
Sale of foreign currency | $ 13.6 | € 12 | ||
Fair value (gains) losses on financial instruments | $ (1,192) | $ 562 | ||
Foreign exchange forward contracts | ||||
Foreign exchange forward contracts | ||||
Number of contracts outstanding | contract | 3 | |||
Purchase of functional currency | 4,000 | |||
Sale of foreign currency | 5,800 | |||
Fair value (gains) losses on financial instruments | $ 8 | $ 562 |
FAIR VALUE AND RISK MANAGEMEN_4
FAIR VALUE AND RISK MANAGEMENT - Fair Value Hierarchy (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Level 1 | ||
Disclosure of detailed information about financial instruments | ||
Financial liabilities | $ (669,090) | |
Net assets (liabilities) measured or disclosed at fair value | $ (654,365) | |
Level 2 | ||
Disclosure of detailed information about financial instruments | ||
Financial liabilities | (568,874) | |
Net assets (liabilities) measured or disclosed at fair value | (655,221) | |
Level 3 | ||
Disclosure of detailed information about financial instruments | ||
Financial liabilities | 4,469,549 | |
Net assets (liabilities) measured or disclosed at fair value | 3,481,252 | |
Unsecured debentures, net | Level 1 | ||
Disclosure of detailed information about financial instruments | ||
Financial liabilities | 669,090 | 654,365 |
Unsecured term loans, net | Level 2 | ||
Disclosure of detailed information about financial instruments | ||
Financial liabilities | 538,602 | 550,565 |
Cross currency interest rate swaps | Level 2 | ||
Disclosure of detailed information about financial instruments | ||
Financial liabilities | 30,365 | 104,757 |
Foreign exchange forward contracts included in accounts payable and accrued liabilities | Level 2 | ||
Disclosure of detailed information about financial instruments | ||
Financial liabilities | 27 | 10 |
Investment properties | Level 3 | ||
Disclosure of detailed information about financial instruments | ||
Financial assets | 4,457,899 | 3,424,978 |
Assets held for sale | Level 3 | ||
Disclosure of detailed information about financial instruments | ||
Financial assets | 44,238 | |
Long-term proceeds receivable associated with a property disposal included in other assets | Level 3 | ||
Disclosure of detailed information about financial instruments | ||
Financial assets | 11,805 | |
Short-term proceeds receivable associated with a property disposal included in accounts receivable | Level 3 | ||
Disclosure of detailed information about financial instruments | ||
Financial assets | 11,650 | 231 |
Foreign exchange forward contracts included in prepaid expenses and other | Level 2 | ||
Disclosure of detailed information about financial instruments | ||
Financial assets | $ 120 | $ 111 |
FAIR VALUE AND RISK MANAGEMEN_5
FAIR VALUE AND RISK MANAGEMENT - Risk Management - Credit risk (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Risk Management | ||
Percentage of trust's rental revenue | 100.00% | 100.00% |
Magna | Credit risk | ||
Risk Management | ||
Percentage of trust's rental revenue | 47.00% | 61.00% |
FAIR VALUE AND RISK MANAGEMEN_6
FAIR VALUE AND RISK MANAGEMENT - Risk Management - Interest rate risk (Details) - Interest rate risk | 12 Months Ended |
Dec. 31, 2019 | |
Fixed interest rate | |
Risk Management | |
Percentage of debt | 55.00% |
Variable interest rate | |
Risk Management | |
Percentage of debt | 45.00% |
2021 Debentures | Fixed interest rate | |
Risk Management | |
Effective interest rate (in percent) | 2.68% |
2023 Debentures | Fixed interest rate | |
Risk Management | |
Effective interest rate (in percent) | 2.43% |
2024 Term Loan | Variable interest rate | |
Risk Management | |
Effective interest rate (in percent) | 0.522% |
2026 Term Loan | Variable interest rate | |
Risk Management | |
Effective interest rate (in percent) | 1.355% |
FAIR VALUE AND RISK MANAGEMEN_7
FAIR VALUE AND RISK MANAGEMENT - Risk Management - Foreign exchange risk (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019CAD ($) | |
Risk Management | |
Unsecured Debentures | $ 650,000 |
Unsecured term loans | 539,800 |
Foreign exchange risk | |
Risk Management | |
Foreign currency denominated net assets | $ 3,200,000 |
Change in foreign currency rate (in percent) | 1.00% |
US dollar exchange risk | |
Risk Management | |
Gain or Loss on change in value of foreign currency exchange rate | $ 19,100 |
Effect of exchange rate changes on revenue | 1,100 |
Euro exchange risk | |
Risk Management | |
Gain or Loss on change in value of foreign currency exchange rate | 12,700 |
Effect of exchange rate changes on revenue | $ 1,100 |
FAIR VALUE AND RISK MANAGEMEN_8
FAIR VALUE AND RISK MANAGEMENT - Contractual Maturities (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Contractual maturities | ||
Unsecured debentures | $ 650,000 | |
Unsecured term loans | 539,800 | |
Cross currency interest rate swaps | 30,365 | $ 104,757 |
Unsecured debentures, net of cross currency interest rate swap savings | 53,476 | |
Unsecured term loans, net of cross currency interest rate swap savings | 34,939 | |
Accounts payable and accrued liabilities | 50,183 | 41,967 |
Distributions payable | 13,081 | $ 24,357 |
Total payments | 1,371,860 | |
Not later than 1 year | ||
Contractual maturities | ||
Unsecured debentures, net of cross currency interest rate swap savings | 16,741 | |
Unsecured term loans, net of cross currency interest rate swap savings | 5,360 | |
Accounts payable and accrued liabilities | 48,075 | |
Distributions payable | 13,081 | |
Total payments | 83,257 | |
2021 | ||
Contractual maturities | ||
Unsecured debentures | 250,000 | |
Cross currency interest rate swaps | 3,630 | |
Unsecured debentures, net of cross currency interest rate swap savings | 16,741 | |
Unsecured term loans, net of cross currency interest rate swap savings | 5,360 | |
Accounts payable and accrued liabilities | 1,482 | |
Total payments | 277,213 | |
2022 | ||
Contractual maturities | ||
Unsecured debentures, net of cross currency interest rate swap savings | 9,997 | |
Unsecured term loans, net of cross currency interest rate swap savings | 5,360 | |
Accounts payable and accrued liabilities | 626 | |
Total payments | 15,983 | |
2023 | ||
Contractual maturities | ||
Unsecured debentures | 400,000 | |
Cross currency interest rate swaps | 24,298 | |
Unsecured debentures, net of cross currency interest rate swap savings | 9,997 | |
Unsecured term loans, net of cross currency interest rate swap savings | 5,360 | |
Total payments | 439,655 | |
2024 | ||
Contractual maturities | ||
Unsecured term loans | 239,816 | |
Cross currency interest rate swaps | 1,202 | |
Unsecured term loans, net of cross currency interest rate swap savings | 5,360 | |
Total payments | 246,378 | |
Later than 5 years | ||
Contractual maturities | ||
Unsecured term loans | 300,000 | |
Cross currency interest rate swaps | 1,235 | |
Unsecured term loans, net of cross currency interest rate swap savings | 8,139 | |
Total payments | $ 309,374 |
CAPITAL MANAGEMENT (Details)
CAPITAL MANAGEMENT (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure of objectives, policies and processes for managing capital [abstract] | ||
Unsecured debentures, net | $ 648,392 | $ 647,849 |
Unsecured term loans, net | 538,602 | 550,565 |
Cross currency interest rate swaps | 30,365 | 104,757 |
Total debt | 1,217,359 | 1,303,171 |
Stapled unitholders' equity | 3,146,143 | 2,495,518 |
Total managed capital | $ 4,363,502 | $ 3,798,689 |
CAPITAL MANAGEMENT - Declaratio
CAPITAL MANAGEMENT - Declaration of Trust (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of objectives, policies and processes for managing capital [abstract] | |
Maximum percentage of total indebtedness on Gross Book Value | 65.00% |
Maximum percentage of proposed investment on Gross Book Value | 15.00% |
CAPITAL MANAGEMENT - Distributi
CAPITAL MANAGEMENT - Distributions (Details) - $ / shares | 1 Months Ended | 12 Months Ended | ||||||||||
Nov. 30, 2019 | Oct. 31, 2019 | Sep. 30, 2019 | Aug. 31, 2019 | Jul. 31, 2019 | Jun. 30, 2019 | May 31, 2019 | Apr. 30, 2019 | Mar. 31, 2019 | Feb. 28, 2019 | Jan. 31, 2019 | Dec. 31, 2019 | |
Disclosure of objectives, policies and processes for managing capital [abstract] | ||||||||||||
Distribution (per stapled unit) | $ 0.233 | $ 0.233 | $ 0.233 | $ 0.233 | $ 0.233 | $ 0.233 | $ 0.233 | $ 0.233 | $ 0.233 | $ 0.233 | $ 0.233 | $ 0.242 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of transactions between related parties | ||
Salaries, incentives and short-term benefits | $ 5,553 | $ 6,057 |
Unit-based compensation expense including fair value adjustments | 3,980 | 2,380 |
Total compensation paid or payable to key management personnel | 9,533 | 8,437 |
Accounts payable and accrued liabilities | 50,183 | 41,967 |
Former Chief Executive Officer | ||
Disclosure of transactions between related parties | ||
Accounts payable and accrued liabilities | $ 1,100 | $ 400 |
COMBINED FINANCIAL INFORMATIO_2
COMBINED FINANCIAL INFORMATION - Balance Sheet (Details) - CAD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Non-current assets: | |||
Investment properties | $ 4,457,899 | $ 3,424,978 | |
Other non-current assets | 24,216 | 53,785 | |
Total non-current assets | 4,482,115 | 3,478,763 | |
Current assets: | |||
Assets held for sale | 44,238 | $ 391,453 | |
Other current assets | 23,164 | 7,508 | |
Cash and cash equivalents | 298,677 | 658,246 | $ 69,019 |
Total assets | 4,803,956 | 4,188,755 | |
Non-current liabilities: | |||
Unsecured debt, net | 1,186,994 | 1,198,414 | |
Other non-current liabilities | 383,763 | 408,722 | |
Total non-current liabilities | 1,570,757 | 1,607,136 | |
Current liabilities: | |||
Other current liabilities | 85,089 | 84,634 | |
Total liabilities | 1,655,846 | 1,691,770 | |
Equity: | |||
Stapled unitholders' equity | 3,146,143 | 2,495,518 | |
Non-controlling interests | 1,967 | 1,467 | |
Total liabilities and equity | 4,803,956 | 4,188,755 | |
Granite REIT | |||
Non-current assets: | |||
Investment properties | 4,457,899 | 3,424,978 | |
Other non-current assets | 24,216 | 53,785 | |
Total non-current assets | 4,482,115 | 3,478,763 | |
Current assets: | |||
Assets held for sale | 44,238 | ||
Other current assets | 23,144 | 7,462 | |
Cash and cash equivalents | 298,385 | 657,432 | |
Total assets | 4,803,644 | 4,187,895 | |
Non-current liabilities: | |||
Unsecured debt, net | 1,186,994 | 1,198,414 | |
Other non-current liabilities | 383,763 | 408,722 | |
Total non-current liabilities | 1,570,757 | 1,607,136 | |
Current liabilities: | |||
Intercompany payable | 11,828 | 7,130 | |
Other current liabilities | 72,949 | 76,644 | |
Total liabilities | 1,655,534 | 1,690,910 | |
Equity: | |||
Stapled unitholders' equity | 3,146,122 | 2,495,501 | |
Non-controlling interests | 1,988 | 1,484 | |
Total liabilities and equity | 4,803,644 | 4,187,895 | |
Granite GP | |||
Non-current assets: | |||
Investment in Granite LP | 21 | 17 | |
Total non-current assets | 21 | 17 | |
Current assets: | |||
Other current assets | 20 | 46 | |
Intercompany receivable | 11,828 | 7,130 | |
Cash and cash equivalents | 292 | 814 | |
Total assets | 12,161 | 8,007 | |
Current liabilities: | |||
Other current liabilities | 12,140 | 7,990 | |
Total liabilities | 12,140 | 7,990 | |
Equity: | |||
Stapled unitholders' equity | 21 | 17 | |
Total liabilities and equity | 12,161 | 8,007 | |
Eliminations/Adjustments | |||
Non-current assets: | |||
Investment in Granite LP | (21) | (17) | |
Total non-current assets | (21) | (17) | |
Current assets: | |||
Intercompany receivable | (11,828) | (7,130) | |
Total assets | (11,849) | (7,147) | |
Current liabilities: | |||
Intercompany payable | (11,828) | (7,130) | |
Total liabilities | (11,828) | (7,130) | |
Equity: | |||
Non-controlling interests | (21) | (17) | |
Total liabilities and equity | $ (11,849) | $ (7,147) |
COMBINED FINANCIAL INFORMATIO_3
COMBINED FINANCIAL INFORMATION - Income Statement (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
COMBINED FINANCIAL INFORMATION - Income Statement | ||
Revenue | $ 273,678 | $ 247,483 |
General and administrative expenses | 31,419 | 29,404 |
Interest expense and other financing costs | 29,941 | 22,413 |
Other costs and expenses, net | 30,965 | 16,964 |
Fair value gains on investment properties, net | (245,442) | (354,707) |
Fair value (gains) losses on financial instruments | (1,192) | 562 |
Acquisition transaction costs | 7,968 | |
Loss on sale of investment properties | 3,045 | 6,871 |
Income before income taxes | 424,942 | 518,008 |
Income tax expense | 42,667 | 52,651 |
Net income | 382,275 | 465,357 |
Less net income attributable to non-controlling interests | 196 | 201 |
Net income attributable to stapled unitholders | 382,079 | 465,156 |
Granite REIT | ||
COMBINED FINANCIAL INFORMATION - Income Statement | ||
Revenue | 273,678 | 247,483 |
General and administrative expenses | 31,419 | 29,404 |
Interest expense and other financing costs | 29,941 | 22,413 |
Other costs and expenses, net | 30,965 | 16,964 |
Fair value gains on investment properties, net | (245,442) | (354,707) |
Fair value (gains) losses on financial instruments | (1,192) | 562 |
Acquisition transaction costs | 7,968 | |
Loss on sale of investment properties | 3,045 | 6,871 |
Income before income taxes | 424,942 | 518,008 |
Income tax expense | 42,667 | 52,651 |
Net income | 382,275 | 465,357 |
Less net income attributable to non-controlling interests | 200 | 206 |
Net income attributable to stapled unitholders | 382,075 | 465,151 |
Granite GP | ||
COMBINED FINANCIAL INFORMATION - Income Statement | ||
Share of (income) loss of Granite LP | (4) | (5) |
Income before income taxes | 4 | 5 |
Net income | 4 | 5 |
Net income attributable to stapled unitholders | 4 | 5 |
Eliminations/Adjustments | ||
COMBINED FINANCIAL INFORMATION - Income Statement | ||
Share of (income) loss of Granite LP | 4 | 5 |
Income before income taxes | (4) | (5) |
Net income | (4) | (5) |
Less net income attributable to non-controlling interests | $ (4) | $ (5) |
COMBINED FINANCIAL INFORMATIO_4
COMBINED FINANCIAL INFORMATION - Cash Flows (Details) - CAD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
OPERATING ACTIVITIES | ||
Net income | $ 382,275 | $ 465,357 |
Items not involving current cash flows | (196,583) | (294,790) |
Changes in working capital balances | (2,945) | 3,777 |
Other operating activities | 684 | (16,456) |
Cash provided by operating activities | 183,431 | 157,888 |
INVESTING ACTIVITIES | ||
Property acquisitions | (930,878) | (549,120) |
Proceeds from disposals, net | 85,536 | 681,319 |
Investment property capital additions - Maintenance or improvements | (2,889) | (17,799) |
Investment property capital additions - Developments or expansions | (27,407) | (15,378) |
Acquisition deposits | (33,086) | |
Other investing activities | (456) | 29,925 |
Cash provided by (used in) investing activities | (876,094) | 95,861 |
FINANCING ACTIVITIES | ||
Distributions paid | (136,897) | (125,131) |
Other financing activities | 480,422 | 449,314 |
Cash provided by (used in) financing activities | 343,525 | 324,183 |
Effect of exchange rate changes | (10,431) | 11,295 |
Net (decrease) increase in cash and cash equivalents during the year | (359,569) | 589,227 |
Granite REIT | ||
OPERATING ACTIVITIES | ||
Net income | 382,275 | 465,357 |
Items not involving current cash flows | (196,583) | (294,790) |
Changes in working capital balances | (2,423) | 3,410 |
Other operating activities | 684 | (16,456) |
Cash provided by operating activities | 183,953 | 157,521 |
INVESTING ACTIVITIES | ||
Property acquisitions | (930,878) | (549,120) |
Proceeds from disposals, net | 85,536 | 681,319 |
Investment property capital additions - Maintenance or improvements | (2,889) | (17,799) |
Investment property capital additions - Developments or expansions | (27,407) | (15,378) |
Acquisition deposits | (33,086) | |
Other investing activities | (456) | 29,925 |
Cash provided by (used in) investing activities | (876,094) | 95,861 |
FINANCING ACTIVITIES | ||
Distributions paid | (136,897) | (125,131) |
Other financing activities | 480,422 | 449,314 |
Cash provided by (used in) financing activities | 343,525 | 324,183 |
Effect of exchange rate changes | (10,431) | 11,295 |
Net (decrease) increase in cash and cash equivalents during the year | (359,047) | 588,860 |
Granite GP | ||
OPERATING ACTIVITIES | ||
Net income | 4 | 5 |
Items not involving current cash flows | (4) | (5) |
Changes in working capital balances | (522) | 367 |
Cash provided by operating activities | (522) | 367 |
FINANCING ACTIVITIES | ||
Net (decrease) increase in cash and cash equivalents during the year | (522) | 367 |
Eliminations/Adjustments | ||
OPERATING ACTIVITIES | ||
Net income | (4) | (5) |
Items not involving current cash flows | $ 4 | $ 5 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) € in Millions, ft² in Millions, $ in Millions | Dec. 31, 2019CAD ($)ft² | Dec. 31, 2019EUR (€)ft² |
Disclosure of commitments and contingencies | ||
Contractual commitments related to construction and development projects, the purchase of property in the United States and the leasehold interest in two properties in Canada | $ | $ 63.8 | |
Value of acquisition | $ 129.5 | € 89 |
Number of square foot | ft² | 0.1 | 0.1 |