H&R REIT Reports Second Quarter 2024 Results
Q2 2024 HIGHLIGHTS:
- Overall portfolio occupancy was 96.9% at
June 30, 2024 . - Net operating income decreased by 5.3% compared to Q2 2023 primarily due to
$776.4 million of property sales betweenJanuary 1, 2023 andJune 30, 2024 . - Same-Property net operating income (cash basis)(1) increased by 1.7% compared to Q2 2023 driven by various factors across H&R's operating segments:
|
• Residential |
0.3 % |
Strengthening of the |
|
• Industrial |
4.7 % |
Higher rent and occupancy |
|
• Office |
(1.8 %) |
Lower occupancy primarily from properties advancing through rezoning |
|
• Retail |
7.9 % |
Increase in occupancy at River Landing Commercial, Miami, FL |
- Funds From Operations ("FFO") per Unit(2) was
$0.31 per Unit compared to$0.30 per Unit in Q2 2023. The REIT's payout ratio as a % of FFO(2) was 49.0% - compared to 50.5% in Q2 2023.
- Unitholders' equity per Unit was
$19.23 and Net Asset Value ("NAV") per Unit(2) was$19.94 atJune 30, 2024 . - The REIT had
$943 million in liquidity atJune 30, 2024 . - Unencumbered assets to unsecured debt coverage(3) was 2.2x at
June 30, 2024 . - At
June 30, 2024 , properties sold or under contract to be sold in 2024 totaled$429.0 million . - H&R's real estate assets at the REIT's proportionate share(1)(4) at
June 30, 2024 is as follows:
(1) |
These are non-GAAP measures. Refer to the "Non-GAAP Measures" section of this news release. |
(2) |
These are non-GAAP ratios. Refer to the "Non-GAAP Measures" section of this news release. |
(3) |
Unencumbered assets are investment properties and properties under development without encumbrances for mortgages or lines of credit. Unsecured debt includes debentures payable, unsecured term loans and unsecured lines of credit. |
(4) |
Excludes the Bow and 100 Wynford, which were legally sold in |
(5) |
Includes six office properties advancing through the rezoning and intensification process to be developed into residential properties. |
FINANCIAL HIGHLIGHTS
|
|
|
|
2024 |
2023 |
Total assets (in thousands) |
|
|
Debt to total assets per the REIT's Financial Statements(1) |
34.4 % |
34.2 % |
Debt to total assets at the REIT's proportionate share(1)(2) |
44.8 % |
44.0 % |
Debt to Adjusted EBITDA at the REIT's proportionate share(1)(2)(3) |
8.5x |
8.5x |
Unitholders' equity (in thousands) |
|
|
Units outstanding (in thousands) |
262,016 |
261,868 |
Exchangeable units outstanding (in thousands) |
17,974 |
17,974 |
Unitholders' equity per Unit |
|
|
NAV per Unit(2) |
|
|
|
Three months ended |
6 months ended |
||
|
2024 |
2023 |
2024 |
2023 |
Rentals from investment properties (in millions) |
|
|
|
|
Net operating income (in millions) |
|
|
|
|
Same-Property net operating income (cash basis) (in millions)(4) |
|
|
|
|
Net income (loss) (in millions) |
( |
( |
( |
|
FFO (in millions)(4) |
|
|
|
|
Adjusted funds from operations ("AFFO") (in millions)(4) |
|
|
|
|
Weighted average number of Units and exchangeable units for FFO (in 000's) |
279,905 |
283,384 |
279,876 |
283,637 |
FFO per basic and diluted Unit(2) |
|
|
|
|
AFFO per basic and diluted Unit(2) |
|
|
|
|
Cash Distributions per Unit |
|
|
|
|
Payout ratio as a % of FFO(2) |
49.0 % |
50.5 % |
49.8 % |
49.5 % |
Payout ratio as a % of AFFO(2) |
61.0 % |
61.0 % |
61.0 % |
59.4 % |
(1) |
Debt includes mortgages payable, debentures payable, unsecured term loans and lines of credit. |
(2) |
These are non-GAAP ratios. Refer to the "Non-GAAP Measures" section of this news release. |
(3) |
Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is calculated by taking the sum of net operating income (excluding straight-lining of contractual rent, IFRIC 21, as well as the Bow and 100 Wynford non-cash rental adjustments) and finance income and subtracting trust expenses (excluding the fair value adjustment to unit-based compensation) for the trailing 12 months. Refer to the "Non-GAAP Measures" section of this news release. |
(4) |
These are non-GAAP measures. Refer to the "Non-GAAP Measures" section of this news release. |
The net loss for the three and six months ended
Fair Value Adjustment on Real Estate Assets |
Three months ended |
Six months ended |
||
(in thousands of Canadian dollars) |
2024 |
2023 |
2024 |
2023 |
Operating Segment: |
|
|
|
|
Residential |
( |
( |
( |
( |
Industrial |
(21,268) |
(3,222) |
(39,787) |
(6,237) |
Office |
(204,563) |
(147,432) |
(210,603) |
(111,424) |
Retail |
(95,494) |
(10,001) |
(103,088) |
(13,247) |
Land and properties under development |
(30,475) |
— |
(31,956) |
38,000 |
Fair value adjustment on real estate assets per the REIT's proportionate share(1) |
(427,163) |
(273,964) |
(468,990) |
(188,960) |
Less: equity accounted investments |
124,853 |
13,280 |
122,513 |
13,267 |
Fair value adjustment on real estate assets per the REIT's Financial Statements |
( |
( |
( |
( |
(1) |
The REIT's proportionate share is a non-GAAP measure defined in the "Non-GAAP Measures" section of this news release. |
Q2 2024 Transaction Highlights
Property Dispositions
In
In
In
In
In addition, a tenant exercised their option to purchase one Canadian industrial property. Gross proceeds at H&R's 50% ownership interest are expected to be
H&R continues to successfully execute on its strategic repositioning plan with properties and land parcels sold or under contract to be sold in 2024 totaling approximately
Creation of
In
Leasing Highlights:
In Q2 2024, H&R completed a 10-year lease renewal on a 63,395 square foot industrial property in
In Q2 2024, H&R completed a 5-year lease renewal on a 93,397 square foot industrial property in
In Q2 2024, H&R completed a 5-year lease renewal on a 22,250 square foot industrial property in
Development Update
In Q1 2023, H&R entered into a lease amendment with its tenant at
June 30, 2024, the total development budget for this property isapproximately
560 &
H&R has a 50% managing ownership interest in 560 &
In 2022, the REIT commenced construction on two
As at
Debt & Liquidity Highlights
As at
As at
MONTHLY DISTRIBUTIONS DECLARED
H&R today declared distributions for the months of August and September scheduled as follows:
|
Distribution/Unit |
Annualized |
Record date |
Distribution date |
|
|
|
|
|
|
|
|
|
|
CONFERENCE CALL AND WEBCAST
Management will host a conference call to discuss the financial results of the REIT on
A live audio webcast will be available through www.hr-reit.com/investor-relations/#investor-events.
Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived on H&R's website following the call date.
The investor presentation is available on H&R's website at www.hr-reit.com/investor-relations/#investor-presentation.
About H&R REIT
H&R REIT is one of
Forward-Looking Disclaimer
Certain information in this news release contains forward‐looking information within the meaning of applicable securities laws (also known as forward‐looking statements) including, among others, statements relating to H&R's objectives, beliefs, plans, estimates, targets, projections and intentions and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts, including with respect to H&R's future plans and targets, the REIT's strategic repositioning plan to create sustainable long-term value for unitholders, H&R's strategy to grow its exposure to residential assets in
Forward‐looking statements are provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements are not guarantees of future performance and are based on H&R's estimates and assumptions that are subject to risks, uncertainties and other factors including those risks and uncertainties discussed in H&R's materials filed with the Canadian securities regulatory authorities from time to time, which could cause the actual results, performance or achievements of H&R to differ materially from the forward‐looking statements contained in this news release. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward‐looking statements include assumptions relating to the general economy, including the continuing effects of inflation; debt markets continue to provide access to capital at a reasonable cost; and assumptions concerning currency exchange and interest rates. Additional risks and uncertainties include, among other things, risks related to: real property ownership; the current economic environment; credit risk and tenant concentration; lease rollover risk; interest rate and other debt‐related risk; development risks; residential rental risk; capital expenditures risk; currency risk; liquidity risk; risks associated with disease outbreaks; cyber security risk; financing credit risk; ESG and climate change risk; co‐ownership interest in properties; general uninsured losses; joint arrangement and investment risks; dependence on key personnel and succession planning; potential acquisition, investment and disposition opportunities and joint venture arrangements; potential undisclosed liabilities associated with acquisitions; competition for real property investments; Unit price risk; potential conflicts of interest; availability of cash for distributions; credit ratings; ability to access capital markets; dilution; unitholder liability; redemption right risk; risks relating to debentures; tax risk; additional tax risks applicable to unitholders; investment eligibility; and statutory remedies. H&R cautions that these lists of factors, risks and uncertainties are not exhaustive. Although the forward‐looking statements contained in this news release are based upon what H&R believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward‐looking statements.
Readers are also urged to examine H&R's materials filed with the Canadian securities regulatory authorities from time to time as they may contain discussions on risks and uncertainties which could cause the actual results and performance of H&R to differ materially from the forward‐looking statements contained in this news release. All forward‐looking statements contained in this news release are qualified by these cautionary statements. These forward‐looking statements are made as of
Non‐GAAP Measures
The unaudited condensed consolidated financial statements of the REIT and related notes for the three and six months ended June 30, 2024 (the "REIT's Financial Statements") were prepared in accordance with International Financial Reporting Standards ("IFRS"). However, H&R's management uses a number of measures, including NAV per Unit, FFO, AFFO, FFO per Unit, AFFO per Unit, payout ratio as a % of FFO, payout ratio as a % of AFFO, debt to total assets at the REIT's proportionate share, debt to Adjusted EBITDA at the REIT's proportionate share, Same‐Property net operating income (cash basis) and the REIT's proportionate share, which do not have meanings recognized or standardized under IFRS or GAAP. These non‐GAAP measures and non‐GAAP ratios should not be construed as alternatives to financial measures calculated in accordance with GAAP. Further, H&R's method of calculating these supplemental non‐GAAP measures and ratios may differ from the methods of other real estate investment trusts or other issuers, and accordingly may not be comparable. H&R uses these measures to better assess H&R's underlying performance and provides these additional measures so that investors may do the same.
For information on the most directly comparable GAAP measures, composition of the measures, a description of how the REIT uses these measures and an explanation of how these measures provide useful information to investors, refer to the "Non‐GAAP Measures" section of the REIT's management's discussion and analysis as at and for the three and six months ended June 30, 2024 available at www.hr‐reit.com and on the REIT's profile on SEDAR at www.sedarplus.com, which is incorporated by reference into this news release.
Financial Position
The following table reconciles the REIT's Statement of Financial Position from the REIT's Financial Statements to the REIT's proportionate share (a non-GAAP Measure):
|
|
|
||||
(in thousands of Canadian dollars) |
REIT's Financial Statements |
Equity investments |
REIT's |
REIT's Financial Statements |
Equity investments |
REIT's |
Assets |
|
|
|
|
|
|
Real estate assets |
|
|
|
|
|
|
Investment properties |
|
|
|
|
|
|
Properties under development |
1,114,739 |
173,998 |
1,288,737 |
1,074,819 |
135,635 |
1,210,454 |
|
8,776,872 |
2,273,546 |
11,050,418 |
8,886,362 |
2,283,647 |
11,170,009 |
Equity accounted investments |
1,122,621 |
(1,122,621) |
— |
1,165,012 |
(1,165,012) |
— |
Assets classified as held for sale |
62,000 |
— |
62,000 |
293,150 |
— |
293,150 |
Other assets |
285,585 |
24,551 |
310,136 |
369,008 |
21,866 |
390,874 |
Cash and cash equivalents |
74,519 |
54,161 |
128,680 |
64,111 |
36,933 |
101,044 |
|
|
|
|
|
|
|
Liabilities and Unitholders' Equity |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Debt |
|
|
|
|
|
|
Exchangeable units |
160,869 |
— |
160,869 |
177,944 |
— |
177,944 |
Deferred Revenue |
927,395 |
— |
927,395 |
947,671 |
— |
947,671 |
Deferred tax liability |
385,564 |
— |
385,564 |
437,214 |
— |
437,214 |
Accounts payable and accrued liabilities |
259,714 |
63,698 |
323,412 |
335,606 |
60,176 |
395,782 |
Non-controlling interest |
— |
19,466 |
19,466 |
— |
19,419 |
19,419 |
|
5,284,234 |
1,229,637 |
6,513,871 |
5,585,268 |
1,177,434 |
6,762,702 |
Unitholders' equity |
5,037,363 |
— |
5,037,363 |
5,192,375 |
— |
5,192,375 |
|
|
|
|
|
|
|
Debt to Adjusted EBITDA at the REIT's Proportionate Share
The following table provides a reconciliation of Debt to Adjusted EBITDA at the REIT's proportionate share (a non-GAAP ratio):
|
|
|
(in thousands of Canadian dollars) |
2024 |
2023 |
Debt per the REIT's Financial Statements |
|
|
Debt - REIT's proportionate share of equity accounted investments |
1,146,473 |
1,097,839 |
Debt at the REIT's proportionate share |
4,697,165 |
4,784,672 |
|
|
|
(Figures below are for the trailing 12 months) |
|
|
Net income (loss) per the REIT's Financial Statements |
(214,591) |
61,690 |
Net income from equity accounted investments (within equity accounted investments) |
(260) |
(426) |
Finance costs - operations |
262,012 |
266,795 |
Fair value adjustments on financial instruments and real estate assets |
670,594 |
363,547 |
Loss on sale of real estate assets, net of related costs |
18,032 |
9,420 |
Gain on foreign exchange (within equity accounted investments) |
(138) |
— |
Income tax recovery |
(72,682) |
(30,484) |
Non-controlling interest |
1,583 |
1,254 |
Adjustments: |
|
|
The Bow and 100 Wynford non-cash rental income adjustments |
(93,328) |
(92,920) |
Straight-lining of contractual rent |
(14,453) |
(12,100) |
IFRIC 21 - realty tax adjustment |
(827) |
— |
Fair value adjustment to unit-based compensation |
(4,086) |
(5,134) |
Adjusted EBITDA at the REIT's proportionate share |
|
|
Debt to Adjusted EBITDA at the REIT's proportionate share |
8.5x |
8.5x |
RESULTS OF OPERATIONS
The following table reconciles the REIT's Results of Operations from the REIT's Financial Statements to the REIT's proportionate share (a non-GAAP Measure):
|
Three months ended |
Three months ended |
||||
(in thousands of Canadian dollars) |
REIT's Financial Statements |
Equity accounted investments |
REIT's proportionate |
REIT's Financial Statements |
Equity accounted investments |
REIT's proportionate |
Rentals from investment properties |
|
|
|
|
|
|
Property operating costs |
(60,305) |
(9,067) |
(69,372) |
(59,973) |
(8,538) |
(68,511) |
Net operating income |
144,470 |
29,791 |
174,261 |
152,528 |
28,210 |
180,738 |
Net income (loss) from equity accounted investments |
(108,859) |
109,128 |
269 |
1,260 |
(941) |
319 |
Finance costs - operations |
(50,755) |
(12,538) |
(63,293) |
(54,944) |
(12,100) |
(67,044) |
Finance income |
2,847 |
233 |
3,080 |
4,699 |
100 |
4,799 |
Trust expenses |
(4,422) |
(1,481) |
(5,903) |
(6,368) |
(1,497) |
(7,865) |
Fair value adjustment on financial instruments |
94 |
(23) |
71 |
65,912 |
(379) |
65,533 |
Fair value adjustment on real estate assets |
(302,310) |
(124,853) |
(427,163) |
(260,684) |
(13,280) |
(273,964) |
Gain (loss) on sale of real estate assets, net of related costs |
(13,671) |
3 |
(13,668) |
(2,152) |
98 |
(2,054) |
Gain on foreign exchange |
— |
138 |
138 |
— |
— |
— |
Net income (loss) before income taxes and non-controlling interest |
(332,606) |
398 |
(332,208) |
(99,749) |
211 |
(99,538) |
Income tax (expense) recovery |
59,940 |
(78) |
59,862 |
40,354 |
(27) |
40,327 |
Net income (loss) before non-controlling interest |
(272,666) |
320 |
(272,346) |
(59,395) |
184 |
(59,211) |
Non-controlling interest |
— |
(320) |
(320) |
— |
(184) |
(184) |
Net loss |
(272,666) |
— |
(272,666) |
(59,395) |
— |
(59,395) |
Other comprehensive income (loss): |
|
|
|
|
|
|
Items that are or may be reclassified subsequently to net loss |
64,448 |
— |
64,448 |
(96,367) |
— |
(96,367) |
Total comprehensive loss attributable to unitholders |
( |
$— |
( |
( |
$— |
( |
The following table reconciles the REIT's Results of Operations from the REIT's Financial Statements to the REIT's proportionate share (a non-GAAP Measure):
|
Six months ended |
Six months ended |
||||
(in thousands of Canadian dollars) |
REIT's Financial Statements |
Equity investments |
REIT's proportionate |
REIT's Financial Statements |
Equity investments |
REIT's |
Rentals from investment properties |
|
|
|
|
|
|
Property operating costs |
(175,639) |
(22,246) |
(197,885) |
(180,968) |
(22,193) |
(203,161) |
Net operating income |
238,657 |
54,587 |
293,244 |
249,828 |
52,149 |
301,977 |
Net income (loss) from equity accounted investments |
(96,309) |
96,507 |
198 |
11,156 |
(10,792) |
364 |
Finance costs - operations |
(104,269) |
(24,858) |
(129,127) |
(109,915) |
(23,995) |
(133,910) |
Finance income |
5,193 |
348 |
5,541 |
6,456 |
160 |
6,616 |
Trust expenses |
(10,836) |
(3,312) |
(14,148) |
(14,459) |
(2,251) |
(16,710) |
Fair value adjustment on financial instruments |
18,984 |
(45) |
18,939 |
46,035 |
(79) |
45,956 |
Fair value adjustment on real estate assets |
(346,477) |
(122,513) |
(468,990) |
(175,693) |
(13,267) |
(188,960) |
Gain (loss) on sale of real estate assets, net of related costs |
(12,805) |
13 |
(12,792) |
(2,649) |
(1,531) |
(4,180) |
Gain on foreign exchange |
— |
138 |
138 |
— |
— |
— |
Net income (loss) before income taxes and non-controlling interest |
(307,862) |
865 |
(306,997) |
10,759 |
394 |
11,153 |
Income tax (expense) recovery |
66,988 |
(181) |
66,807 |
24,648 |
(39) |
24,609 |
Net income (loss) before non-controlling interest |
(240,874) |
684 |
(240,190) |
35,407 |
355 |
35,762 |
Non-controlling interest |
— |
(684) |
(684) |
— |
(355) |
(355) |
Net income (loss) |
(240,874) |
— |
(240,874) |
35,407 |
— |
35,407 |
Other comprehensive income (loss): |
|
|
|
|
|
|
Items that are or may be reclassified subsequently to net income (loss) |
163,026 |
— |
163,026 |
(129,239) |
— |
(129,239) |
Total comprehensive loss attributable to unitholders |
( |
$— |
( |
( |
$— |
( |
Same-Property net operating income (cash basis)
The following table reconciles net operating income per the REIT's Financial Statements to Same-Property net operating income (cash basis) (a non-GAAP measure):
|
Three months ended |
Six months ended |
||||
(in thousands of Canadian dollars) |
2024 |
2023 |
Change |
2024 |
2023 |
Change |
Rentals from investment properties |
|
|
( |
|
|
( |
Property operating costs |
(60,305) |
(59,973) |
(332) |
(175,639) |
(180,968) |
5,329 |
Net operating income per the REIT's Financial Statements |
144,470 |
152,528 |
(8,058) |
238,657 |
249,828 |
(11,171) |
Adjusted for: |
|
|
|
|
|
|
Net operating income from equity accounted investments |
29,791 |
28,210 |
1,581 |
54,587 |
52,149 |
2,438 |
Straight-lining of contractual rent at the REIT's proportionate share |
(5,448) |
(4,313) |
(1,135) |
(10,424) |
(8,071) |
(2,353) |
Realty taxes in accordance with IFRIC 21 at the REIT's proportionate share(1) |
(14,378) |
(15,528) |
1,150 |
29,443 |
30,270 |
(827) |
Net operating income (cash basis) from Transactions at the REIT's proportionate share |
(30,036) |
(38,525) |
8,489 |
(64,087) |
(80,311) |
16,224 |
Same-Property net operating income (cash basis) |
|
|
|
|
|
|
(1) |
The allocation of realty taxes in accordance with IFRIC 21 (in thousands of Canadian dollars) at the REIT's proportionate share by operating segment for the six months ended |
NAV pe r Unit (a non-GAAP Ratio)
The following table reconciles Unitholders' equity per Unit to NAV per Unit:
Unitholders' Equity per Unit and NAV per Unit |
|
|
(in thousands except for per Unit amounts) |
2024 |
2023 |
Unitholders' equity |
|
|
Exchangeable units |
160,869 |
177,944 |
Deferred tax liability |
385,564 |
437,214 |
Total |
|
|
|
|
|
Units outstanding |
262,016 |
261,868 |
Exchangeable units outstanding |
17,974 |
17,974 |
Total |
279,990 |
279,842 |
Unitholders' equity per Unit(1) |
|
|
NAV per Unit |
|
|
(1) |
Unitholders' equity per Unit is calculated by dividing unitholders' equity by Units outstanding. |
Funds from Operations and Adjusted Funds from Operations
The following table reconciles net income (loss) per the REIT's Financial Statements to FFO and AFFO (non-GAAP measures):
FFO AND AFFO |
Three Months ended |
Six months ended |
||
(in thousands of Canadian dollars except per Unit amounts) |
2024 |
2023 |
2024 |
2023 |
Net income (loss) per the REIT's Financial Statements |
( |
( |
( |
|
Realty taxes in accordance with IFRIC 21 |
(13,199) |
(14,278) |
27,022 |
27,903 |
FFO adjustments from equity accounted investments |
124,010 |
12,311 |
125,282 |
17,244 |
Exchangeable unit distributions |
2,696 |
2,696 |
5,392 |
5,392 |
Fair value adjustments on financial instruments and real estate assets |
302,216 |
194,772 |
327,493 |
129,658 |
Fair value adjustment to unit-based compensation |
(1,067) |
(3,933) |
(1,589) |
(2,637) |
Loss on sale of real estate assets, net of related costs |
13,671 |
2,152 |
12,805 |
2,649 |
Deferred income tax recovery applicable to |
(60,326) |
(41,225) |
(67,713) |
(25,847) |
Incremental leasing costs |
540 |
581 |
1,155 |
1,168 |
The Bow and 100 Wynford non-cash rental income and accretion adjustments |
(10,244) |
(9,567) |
(20,276) |
(18,931) |
FFO |
|
|
|
|
Straight-lining of contractual rent |
(5,370) |
(4,266) |
(10,199) |
(7,890) |
Rent amortization of tenant inducements |
1,141 |
1,130 |
2,271 |
2,253 |
Capital expenditures |
(8,813) |
(7,907) |
(17,396) |
(17,139) |
Leasing expenses and tenant inducements |
(1,941) |
(1,543) |
(2,156) |
(2,303) |
Incremental leasing costs |
(540) |
(581) |
(1,155) |
(1,168) |
AFFO adjustments from equity accounted investments |
(1,303) |
(1,320) |
(2,470) |
(2,460) |
AFFO |
|
|
|
|
Basic and diluted weighted average number of Units and exchangeable units (in thousands of Units)(1) |
279,905 |
283,384 |
279,876 |
283,637 |
FFO per basic and diluted Unit |
|
|
|
|
AFFO per basic and diluted Unit |
|
|
|
|
Cash Distributions per Unit |
|
|
|
|
Payout ratio as a % of FFO |
49.0 % |
50.5 % |
49.8 % |
49.5 % |
Payout ratio as a % of AFFO |
61.0 % |
61.0 % |
61.0 % |
59.4 % |
(1) |
For the three and six months ended |
Additional information regarding H&R is available at www.hr-reit.com and on www.sedarplus.com
SOURCE