Q3 2019 Earnings Call
Property partners third quarter 2019 financial results Conference call. As a reminder, today's call me is being recorded it is now my pleasure to turn the call over to Mr., Matt Gerry Senior Vice President Investor Relations. Please go ahead Sir.
Thank you and good morning, before we begin our presentation. Let me caution you that our discussion will include forward looking statements. These statements that relate to future results and events are based on our current expectations. Our actual results in future periods may differ materially from those currently expected because of a number of risks uncertainties and assumption.
The risks uncertainties and assumptions that we believe our material are outlined in our press release issued this morning with that I'll turn the call over to Chief Executive Officer, Brian Kingston thinking about and good morning, everyone and thank you for joining our call.
With me on the call today are required the chairman of BP, why Brian Davis, our CFO and Sandeep mathrani or global head of retail real estate.
In my prepared remarks, I'll recap, our operating performance from the quarter as well as provide an update on our various ongoing strategic initiatives. Brian will then provide a detailed update on our quarterly financial results and after that we'd be happy to take questions from any of our analysts on the call today.
So as you may have seen in our disclosure. This morning, the third quarter 2019 was highlighted by the recent completion several of our development projects.
Putting two murky buildings for Brookfield in New York in London, delivering over 3 million square feet of modern office space, that's approximately 85% leased upon opening.
These buildings demonstrate the strong demand we continue to see for a premier well located office assets.
Despite a strong asset performance BP why shares currently trade at a discount. We therefore continued on the path of repurchasing shares this quarter. Since we believe it represents an attractive investment opportunity for us.
As a result total purchases for this year now total over $500 million.
Gross dispositions totaled 3.7 million $3.7 billion in the third quarter.
1.4 billion at our share at prices that were 4% above our IRS carrying values.
These sales generated $723 million of net proceeds to BP why bringing our year to date total to $1.2 billion.
With expected sales in the fourth quarter. This year, we expect to achieve our goal for the full year 2019.
Asset sales completed during this quarter included office buildings in Sydney in Boston, and multifamily development in Brooklyn, Brooklyn, and a newly developed mall in Norwalk, Connecticut.
The typical real estate cycle movements in cap rates tend to move in lock step with interest rates over the last 12 months, what we've seen a dramatic decline and interest rates in both the U.S. and in Europe . This is yet to be reflected in the valuation of our assets to put this into perspective 100 basis point reduction in cap rates adds almost $20 to our net asset value.
Brianna.
Continued low interest rate environment should translate into higher demand for real assets, which will increase the value of our portfolio of properties.
It also assists us and continuing to monetize matured de risked assets at great prices and reallocating that capital to development and other higher returning investment opportunities.
Moving to our core business operations, our global office business completed over 1.9 million square feet of leasing in the third quarter at rents that were more than 30% higher than leases expire during the period.
The significant mark to market on Rins drove same store growth of 2.5% over the prior year.
Strong leasing results coupled with increased fee income led to a 10% increase in company AFFO in this segment this quarter.
Our development program has begun to deliver brand new Premier office buildings in our strategic operating markets in October we completed three of our largest office development projects today.
Two office towers in London, and one in New York totaling nearly 4 million square feet.
These projects cost $3.6 billion to build and will be worth approximately $5.5 billion at stabilization.
More importantly, they will add approximately $150 million of net operating income to our operations.
We also signed our first Lisa to Manhattan, West with law firm provide agreeing to a lease for 481000 square feet or approximately 25% to building.
Manhattan West campus is state of the our office environment gauging amenities and direct access to transportation continue to attract leading companies to relocate there.
Overall, the pre let commitment on our entire 8 million square foot active development pipeline has increased 800 basis points to 60%.
As these projects complete and stabilize over the next four years collectively they will contribute an additional $300 million of net operating income.
In our core retail business over 10 million square feet of leases have commenced in 2019 with rent spreads on a suite to suite basis growing at 5.4%.
At quarter end, the portfolio was 95% leased and we expect to be at 96% by the end of year.
Comparing to the prior year period.
In place rents increased 2.4% and why weighted tenant sales increased 5.4% to $787 per square foot another new high for the portfolio.
Less than a month ago, we opened the doors to our new 700000 square foot mall. So no collection in Norwalk, Connecticut. The for several weeks of operations have been extremely successful with consumer traffic in the tens of thousands and several of our retailers reporting sales above their expectations.
This type of productivity should only increase as we enter the holiday shopping season.
We continue to see a backlog of digitally native retailers, who wish to open stores within our malls.
Our biggest issue today is deciding which retailers to lease space too in the limited vacancy we have available for them. We believe this will increasingly be a focus where our business as online in store based retail coverage converge.
Looking forward to 2020, we've established a leasing goal of over 8 million square feet in our retail business, which almost half is already completed.
We continue to focus on opportunities to redevelop reposition and densify, our retail centers at Investor Day in September we described nine near term and six long term projects, which in aggregate will create approximately $1.2 billion of asset value over the next several years. This represents a unique organic investment opportunity for.
For us to drive meaningful growth in our retail business.
Before I turn the call over to Brian to discuss our quarterly financial results I wanted to briefly update you on our latest financing financing initiatives.
Capital markets continue to be very conducive for well capitalized property owners to finance high quality Rhys real estate at attractive on attractive terms.
Consistent with our strategy of placing non recourse investment grade debt on each of our assets during and subsequent to the quarter, we executed the following transactions.
We refinanced the recently completed 100 Bishopsgate office tower in London for approximately $1.1 billion, returning 100% of our equity in this development generating net proceeds to BP why of approximately $450 million.
A new mortgage has a five year term at a floating interest rate of approximately 2.5% and going forward. This property will produce approximately $40 million of annual EPS AFFO to BP why with zero capital invested in.
In core retail, we completed an aggregate of $1.3 billion of asset level financings generating net proceeds to BP why approximately $343 million. These new mortgages are all floating rate with an average term of approximately five years.
And finally, we issued $250 million of perpetual preferred green units the first to their kind in the industry.
With that I'll now turn the call over to Brian for a detailed review the operating financial operating report. Thank you Brian during the third quarter of 2019, BP why earns company FFO unrealized gains of $324 million.
Paired with $302 million for the same period in 2018.
This increase is due to a combination of the additional capital raised and invested in our core retail business.
Same property growth and higher fees earned in our core office business.
In the prior year, we also benefited from $53 million of realized gains from the sale of a portfolio of self storage properties in our best Rep to investment, we did not or in any realized gains in the current quarter from our LP investments, but do expect aren't gains in the fourth quarter related to the sale of our Manhattan multifamily portfolio.
Referenced in our press release.
On a per unit basis company FFO unrealized gains for the quarter was 34 cents per unit compared with 38 cents per unit earned in the prior year.
Net income attributable to unit holders for the quarter was $474 million or 49 cents per unit compared with net income of $380 million or 47 cents per unit earned in the prior year.
In the current quarter, we recorded unrealized net fair value gains of $322 million, which included $518 million and gains from our investment properties, primarily related to higher cash flow estimates for our core properties and improved valuation metrics in our LP investment properties and then.
Addition to that we had gains in our active developments as we progressed construction and leasing and reduced overall risk.
Our core office business earned $150 million of company FFO compared with $136 million in the prior year.
The current quarter benefited from 2.5% same property NOI growth on a natural currency basis, and an increase in fee income as this quarter. In addition to higher property management fees, we benefited from an additional $13 million performance based fee on a property that we had sold back in 2015.
Yeah.
This increase was in addition to the $38 million earned in the prior quarter related to the same fee.
These increases in earnings were partially offset by the impact of asset sales over the past 12 months, where proceeds were either reinvested into another business segment or used to reduce leverage.
Or were invested into our development and redevelopment projects that are not yet generating similar level of current earnings.
In addition, the strong U.S. dollar continue to have a negative impact on earnings.
In our core retail business, we earned $201 million a company FFO compared with $146 million earned in the prior year.
For additional investment in this portfolio contributed to this increase we also benefited from the sale at one of our prop.
The sale of land at one of our properties and from the gain on the sale of part of an investment we had made and an operating company.
In aggregate these two transactions contributed $28 million to our results.
Results this quarter continue to be impacted by bankruptcies that took place since the beginning of 2018.
These bankruptcies, which it aggregate 3 million square feet put pressure on our same property NOI results, which were flat on a period over period basis.
At a significant progress has been made and releasing 75% of that space at higher rental rates. We expect this impact to only be temporary.
In addition, we did have an incremental $7 million in general and administrative expenses this quarter compared to last.
As a result of the requirement to expense internal leasing costs that were previously capitalized.
Our LP investments earned $74 million of company FFO and realized gains compared with 127 million earned in the prior year.
The decrease a $53 million was entirely due to the realized gain I previously mentioned.
Absent that gain company FFO was flat with the prior period.
The benefits of increased earnings in our best Rep three investment.
Yes, and build income in our multifamily fund investments were offset by realizations and our first and second opportunity fund investments and the impact of Hurricane Dorian on our property in the Bahamas, which sustain no damage, but was impacted by cancellations.
In the prior quarter, we earned company FFO unrealized gains of $362 million or 38 cents per unit.
The prior quarter benefited from the $38 million performance fee earned in our office business and from 27 million in realized gains earn from the sale of an office complex in California.
Our proportionate balance sheet ended the quarter with equity attributable to unit holders of 27, and a half billion dollars or $28.61 per unit.
Our overall assets were largely unchanged at $85 billion.
Assets held for sale. This quarter included an office property in Sydney, Australia.
Five properties in our Manhattan multifamily investment in best Rep, One which were sold subsequent to quarter end and in that case, where we realized a 19% gross IR are in a 2.2 times multiple of capital.
Although we completed construction of three office developments this quarter that Brian referenced they'll remain classified as developments until the tenants make further progress in building out and occupying their space.
We also added to our development listing on page 29 of the supplemental 784 unit multifamily high rise at 75 five figure in downtown outlay that was highlighted at our Investor day. This past September .
We expect this development to cost about $540 million in total and be built to yield on cost in excess of 7%.
Lastly, as a reminder, we did adopt the new leasing standard IRS 16, which resulted in an increase in our proportionate assets and liabilities by a little over $630 million to reflect land lease liabilities in an offsetting right of use asset.
The impact to the piano is an increase in net operating income of $10 million and a corresponding increased interest expense to reflect a re characterization of the land lease payments to principal and an associated interest charge.
Now with those as my planned remarks, operator, we're pleased to open up the line for questions certainly ladies and gentlemen, if you have a question at this time. Please press Star then one under Touchtone telephone. If your question has been answered and you'd like to remove yourself from the Q. Please press the pound key our first question comes on the line of Sheila Mcgrath from Evercore.
For your question please.
I guess I had a question on that.
Retail asset sale in Connecticut.
The I guess you are selling an interest in that prior to stabilization what was the philosophy, there and if you could give us some insight on cap rate or how that sale price related to your cost basis.
Yes, so we sold and 80% interest.
In the mall to to an investment vehicle that we're managing for.
Some of our investors and the philosophy was it's actually been sold on a stabilized basis. So we're underwriting that lease up and getting.
Our full development profit that we would expect for project like this for the sale price was based on a stabilized NOI.
And.
Brian was their remaining capital to spend on that asset that shifted to the the new entity.
So we retain the the liability to spend the remaining capital.
The effectively by fully stabilized completed mall.
Okay. So so the but was there a devaluation that you sold it was it higher than your cost basis.
Absolutely yes.
Yes, okay.
This is.
This is a fully stabilized mall in one of the highest income demographics in the United States. We made a lot of development profit on this one.
Is there anyway, you could give us some insight on the cap rate on that.
Sub 5%.
Okay.
And then on the Bishopsgate refinancing.
At the lenders valuation is that building how much value did people why create on that project just gives us kind of the cost basis and value new valuation.
So the the lenders value is exactly the same as what we talked about at.
Investor Day in September so there's actually a slide in there.
That highlights that for for a for you as well as the development profit, but it's almost $1 billion of development profit.
Okay. So the lenders value would be consistent with that value that we have not flood.
Okay, and then on buyback of shares.
Certainly makes sense at current levels, where the shares are versus any the how much will do you view.
You have for additional buyback or just tell us how are you thinking about that right now.
Well, obviously, we in August we renewed the normal course issuer bid.
I think we have about the ability to buy back another 30 ish million shares under that.
And so we as we sort of highlighted in the press release, we've been.
Fairly active in the market over the past quarter and continue to be ended the fourth quarter and I would expect we will be over the course of the year.
We have been invest.
The only other thing to think over and above that is whether we do a another substantial issuer bid as we did in January and I think that really is a function of where the share price trends versus.
Other investment opportunities that we've got but we'll certainly continue to be very active on the normal course issuer bid.
Okay, Great I'll get back in the Q.
Hi, Thanks.
Thank you and as a reminder, ladies and gentlemen, if you have a question at this time. Please press Star then one.
Our next question comes from the line of Mario Sorry from Scotiabank. Your question. Please.
Hi, good morning.
Just a when im just on the just on the commentary of I guess, I'm increasingly disconnected private versus public market valuation.
Roofing general given.
Cap rates haven't responded to deployment.
And the Treasury based on your historical experience and maybe even discussion there will be investors today, what do you think it's going to be the primary catalyst.
The private market valuations cap rates to react to these lower sovereign bond yields in are you concerned at all.
Potential spread expansion.
Going forward that would offset.
And then be field.
Well look I think I think theres always a lag effect between when interest rates move and then when private markets keep up and Thats because bond markets react on a daily basis and it takes time for.
The sort of large illiquid transactions to happen, so I'd say in our discussions with.
Potential investors in our various fund vehicles, and whether that's in real estate or infrastructure any of our asset classes.
There are number one issue right now is is where to put capital to work.
That's going to earn them a yield and replace some of these.
Fixed income investments that they have is the rolling over that are at zero and sometimes less than zero percent.
Reinvestment rates, so im not sure Theres, a theres a hard catalyst for that to happen I think it just takes a bit of time for those prices to adjust but we think it's coming.
Clearly in a relatively low interest rate environment, and while it may move up a bit from here.
I think there is still as we sort of highlighted there's still a fair amount spread.
Between where those base rates are and where we're seeing capital markets transactions have been I think it's just a matter of time for.
For that adjustment.
Okay and with the common consistent across.
The cost of because clearly based on.
Were public with recruiting procedures are for courses.
Total versus industrial multifamily.
It is quite different in the marketplace.
With that.
Fair for retail as well or is that something different.
Yes look I mean cap rates are sort of a convenient way first I'll talk about where pricing is but but obviously, what's more relevant as the overall return.
And so clearly in sectors, where investors are.
Addicting or or anticipating higher growth, whether thats multifamily or industrial.
I can justify a lower cap rate than some other sectors where.
They may think that growth will be somewhat harder to come by or were there or there may be more capital associated with that so.
I'd say the cap rates are sort of a useful headline but it is hard to compare them across various asset classes really do after just look at investor return expectations.
Right. Okay, and then you mentioned the Sunil collection is a unique.
Huh.
Were there any implications or you can take away from a pricing on that transaction.
Whether it's on a per square foot basis cap rate or whatever their primary metrics want to look out in terms of.
You are subscribing to the rest of your retail portfolio.
No I'd say, it's in line with with how we're carrying the portfolio overall.
So I think it's good validation for that ends we often talk about its not.
You know for these type of assets.
There's not a lot of transaction volume given how closely held they are and so.
I think having having some market evidence is helpful. But I don't think it indicated anything other than.
We're comfortable with again the differs value in the portfolio overall.
Got it okay, and maybe just switching gears to development I just wanted to confirm.
Brian Davis mentioned.
In terms of the accounting for the 4 million square feet. There was put into production on the office development side.
Want to confirm if there was really no before in a wide contribution.
From those projects in Q3.
That is correct.
There then you know.
As they remain development projects, we continue to capitalize interest associated with the equity that we have invested in them.
Likely the fourth quarter, maybe the first quarter.
Probably depends project by project, they will shift over into operating properties at which point, we see capitalizing any interest and our costs.
And start recognizing rent.
There's typically a lag period between when these things.
Start generating full stabilized earnings, but that transitions likely to take place ended the year beginning of next year.
Okay and on the.
On the 1.9 billion of value creation.
Our friends on that 4 million square feet.
How much of that would be reflected in your right for us.
Three.
That I'd say about 60% of the value creation has been recognized in our in our values as of Q3.
Right, Okay, and then just maybe sticking to Manhattan West.
Thank you identified that about 80% of the entire.
Development.
Occupied relief at this point can you maybe provide us with some internal benchmarking in terms of how you expect or 80%.
Progress over the next couple of years.
Yes. So at this 0.1 Manhattan West is actually probably 90% leased.
And the overall project is even higher than that so the project is substantially leased to Manhattan, West which is under development.
Three us years away from being delivered is about 25% pre let.
With the recent signing of the curves.
Does that answer your question area.
Maybe more specifically then like in terms of to Manhattan, West with 25% like what would be good.
Okay.
For Brookfield in terms of.
Trajectory of the pre leasing.
Yes, we have about 1 million a half square feet of.
Of current interest in discussions going on right now.
So it's a little hard to predict but I'd say our business plan is hoping for that have been building something like 50% leased by the end of next year with over two years to go before it's delivered we could potentially outperform that so our expectation is given the nature of the market the interest.
In new and redevelop buildings interest in the West side is that we'll have the substantially put to bed before the delivered similar to the outcome of one man at West.
Okay, and broadly speaking or two in the market there has been or there is a bit of negative.
Sentiment on the New York Office leasing side your portfolio is doing relatively well can you can you go through the next couple of years in terms of Weve expires in one or is there anything.
On the radar.
It impacts your same store numbers.
And your conference portfolio, either positive or negative.
Yeah.
We don't have a lot of exposure to lease roll over the next few years in it.
Also same railroad that the.
New York City, it's in Manhattan, It's sort of a tale of haven't have not brand new buildings and redevelop buildings are actually performing extremely well in achieving rental rate higher than ever seen.
And thats consistent with our portfolio here. So that's our experienced currently no near term.
Rollover of any significance.
So I.
I think that we're in we're in great shape.
Okay and just my last question for a turn it over just on a on the increased interest in the retail.
Around building.
Can you kind of share updated thoughts in terms of what the plans are there timing.
Targeted returns.
So.
The basically have.
Three spaces on fifth Avenue, which area in negotiations with tenants. So we expect if they haven't you into 57th Street.
On the project to be all leased by the first the second quarter of 2020.
Just leaves us.
The second floor space, which is going to be constructed fully leased it out into and just small stores.
So the good news is the more expensive space.
Should be all leased up by the first topic 2020 middleware and.
At least negotiations right now.
Okay, and then I guess.
Good.
Returns on the 700 million dollar incremental spend would be.
Well, it's consistent with our targeted returns across all of our AR.
Okay and various retail investment. So I think we think we can get sort of mid teens returns on on the type of risk that we're taking.
Okay.
Okay. That's great. Thank you.
Okay.
Thank you. Our next question comes from the line, though Neil Downey from RBC capital markets. Your question. Please.
Thank you good morning.
Part of the program or the planned at the time of the GGP privatization was to continue to sell some additional whole or parcel partial interests.
In some of those core retail properties.
Can you give us an update.
Where are you may stand in terms of.
Potential negotiations with respect to asset sales or plans over the next 12 months.
Yes, so so as you would expect.
You know the investor appetite, particularly at.
The prices that we think we would.
You know justified selling assets.
In the current environment is not easy so I think it's taking a little longer than we would have anticipated think we did give ourselves Neil to be fair for years to get this done.
And it won't necessarily be evenly spread over the four years I think in part it'll it will just depend on investor appetite. These are large chunky assets. There is a relatively small number of institutions that are capable investing in them and so it'll it will come in time, but it won't be a sort of smoothed line over those four years.
So there we've got a number of discussions underway, but I think it'd be premature to predict timing.
Okay.
Thank you for that and.
With respect to the the core retail.
Net operating income.
Whether I take the nine months figure and kind of pro rated to an annualized number or whether it take Q3 and multiply by four kind of together a run rate.
Either way I do that.
There's about 1.7 billion of annualized NOI.
You've also clearly articulated you've got a lot of leasing.
And then that will be taking occupancy through the fourth quarter.
How much of an uplift on an annualized basis.
In dollar value should we expect from the 75% of that vacant.
Space or the former bankrupt space, you've got release, what's the impact relative to the 1 billion seven.
Current run rate.
Yes.
So I'll try answered at a high level.
And so if we can get to their together.
But our expectations overall.
We should be the NOI should be growing in the neighborhood of 2% on it on an annual basis, so 2% on.
That $1.7 billion is probably a good number and that captures a number of things Neal so I'm not sure how to quite isolate.
Necessarily the 3 million square feet.
That was.
Results for the bankruptcies that we've released back up but it's all so thats a combination of marking to market leases that are rolling.
As well as the uplift thats coming from that.
Okay. So.
I guess to rephrase that.
You do talk about you know carrying the weight of these bankruptcies, but you're you seem to not be suggesting that there is theres a significant in July upside to be captured over the next 12 or 24 months of this.
Well these leases they start paying rent or that's that's I'm struggling with a bit Brian .
Yes, I guess in the context of 120 million square feet getting a 7% mark to market on 3 million square feet is meaningful yes, it's not moving around a wide by 10%, yes, yes, and again I think as Brian said I mean, you did the same stood the golar and unlike growth in 2020 is content to be about 2%.
Yes.
Okay. Thank you.
Okay.
Thank you. Our next question is a follow up the line of Sheila Mcgrath from Evercore. Your question. Please.
Yes.
Brian you mentioned in core retail UBI finance several assets I was wondering if you could give us insights on how.
The lenders valuations for.
Compared to your expectations and any thoughts on.
The lenders are looking at financing retail assets right now.
Yes, so I'd say similar to the comments on.
On Bishopsgate, the the lenders values and where the various appraisals and that sort of thing are all coming in inline with our IRS, which shouldn't be surprising because as we say we sort of use these.
Opportunities.
Through refinancings et cetera to make sure that are all right for us values are consistent with what we're seeing in the market. So I'd say there was no big difference in terms of where the valuations came out relative to our thoughts on value or where we're carrying them I would say generally the mood within retail is there is.
A significant amounts of capital available at reasonable prices to well capitalized.
Owners upscale such as ourselves.
So I, although I wouldnt characterize these refinancings all as easy.
They certainly are on attractive terms.
And the capital is readily available you know I don't know that that necessarily applies as a broad spectrum to all owners of of retail today or all assets frankly, but I think for very high quality malls like we own with a high quality operator like we own.
You know the.
Our ability to refinance and not only refinance but up finance these assets.
We took a significant amount of additional capital out of them as result of these refinancings.
Good prices these are sort of three and 5% interest rates on.
On.
Malls that might have.
Cap rates that are significantly above that so it's a drag.
It is creating a pretty attractive.
Equity yield on these malls.
And why what is your thoughts on.
Doing all floating rate debt interest rates are so low line to fixed rate.
Yes, so in part our decision around fixed or floating and this is true for malls or industrial or malls or office buildings et cetera, we try and match up the the financings with our business plan. So it just so happened in this case.
All of the malls that we refinanced this quarter either our transitional in nature, where we're spending some capital when we think we an opportunity to to refinance again in a couple of years or assets, where we're looking to sell or bringing partners and so for that reason, we we keep the debt terms a little more flexible.
In the fourth quarter, we were in the process of completing a couple of others and they're all going to be a fixed rates because there theres sort of longer term old. So it's more driven by the business plan of the assets than a than an interest rate call.
Okay, and then on that.
75% of.
Bankruptcy space that you've already back filled when will those new leases start to impact the bottom line is it mostly next year will we see some impact in fourth quarter and also can you, let us know how Brookfield shared with forever 21.
So it should it is suddenly.
Started role in by the second.
Quarter of next year, we are ending this year, 96% Lisa you know we've pretty much at.
Full occupancy.
But these new tenants will come into real by second and third quarter next chase because it takes about six to nine month as you know to.
To build out the spacing for them to open.
Again with Forever 21, we had.
The only closure as the had enough portfolio with the Riley Rose concept, we had no actual forever 21 closures and so.
That was the status of how we said.
Okay, great and.
Just on the fee streams, you mentioned in the office segment could you remind us the driver of those fees and is that a good run rate in the quarter.
I did mention that there's probably an incremental $13 million that we included in the quarter. That's more transactional based it was really a performance fee related to an asset that we sold a while ago, but if you subtract out that 13 million I think you get to about $20 million and.
And fees in the core office segment.
That is an attract that is a consistent run rate going forward and it really represents property management fees.
Leasing fees, which can be lumpy at times.
And then construction and development fees as well.
Okay and last question on the perpetual Green units what are those exactly and.
The use of proceeds have to be targeted to.
You know environmental or sustainable kind of spend.
Yes.
At the end of the day, they're really just perpetual preferred shares that have been issued by BP why.
Unlike our previous strategy for issuing perpetual preferred shares these were issued into the U.S. market and instead of being issued out of a subsidiary into the Canadian market like we have in the past they were issued right out of BP why.
To get them.
To be labeled as.
Effectively as green preferred shares the proceeds have to be used.
Effectively for Green projects as you had indicated.
That just really broadens the investor base.
And hopefully overtime as people get comfortable with respect to this instruments since ours was the first it'll actually benefit us in pricing as well.
Okay. Thank you.
Thank you and this does conclude the question and answer session of today's program I'd like to hand, the program back to Brian Kingston CEO for any further remarks.
So thank you again, everyone for for joining us on the call today, and we look forward to providing you an update again at the end of the fourth quarter.
Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.