Good morning. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to Choice Properties Real Estate Investment Trust Fourth Quarter Results. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
I would now like to turn the call over to Kim Li, Vice President, Investor Relations. Please go ahead.
Thank you, Michelle. Good morning, and welcome to the Choice Properties REIT fourth quarter twenty sixteen conference call. This call is also being webcast simultaneously on our website at choicereit.ca, where you will also find a copy of our Q4 summary information package that we will be referring to on this call. I'm joined here this morning by John Morrison, President and Chief Executive Officer and Bart Munn, Chief Financial Officer. Before we begin today's call, want to remind you that by discussing our financial and operating performance and in responding to your questions, we may make forward looking statements, including statements concerning Choice Properties' objectives, its strategies to achieve those objectives as well as statements with respect to management's beliefs, plans, estimates, intentions, outlook and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts.
These statements are based on our current estimates and assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from the conclusions in these forward looking statements. Additional information on the material risks that could impact our actual results and the estimates and assumptions we apply to making these statements can be found in the Choice Properties 2016 Annual Report and Management's Discussion and Analysis related thereto, together with our annual information form that are all available on our website and on SEDAR. With that, I'll turn it over to John.
Thank you, Kim, and good morning, everyone, and thank you for joining our conference call. Q4 was another successful quarter for Choice Properties. With the team making significant progress on key strategic initiatives and focused on delivering results, we maintained our track record of reporting year over year growth for our key performance metrics. This quarter marks our tenth consecutive quarter of improving occupancy rates, increasing net operating income and growing funds from operations. As a result, for 2016, we delivered growth in FFO and AFFO per unit of 3.53.6%, respectively.
Now let me provide you with more details of our achievements. During the quarter, as previously announced, we acquired a portfolio of five properties from Loblaw. In December, we acquired two additional properties, each from third party vendors. These third party acquisitions are strategically located adjacent to existing Choice sites, one in Beaverton, Ontario and the other in Courtenay, British Columbia. They were both immediately accretive at a combined purchase price of approximately $13,600,000 and an implied capitalization rate of approximately 6.6%.
For the year, acquisition activity added 16 properties to our portfolio at a total purchase price of $192,000,000 On Slide five of our summary information package, we highlight the 232,000 square feet of new gross leasable area we constructed in the fourth quarter from tenant possession. This new GLA added 51 new retail spaces, a 50,000 square foot expansion to our industrial property in Mississauga, Ontario and included a 29,000 square foot Loblaw Banner Food Store in Edmonton, Alberta as well as a 16,000 square foot Shoppers Drug Mart in Regina, Saskatchewan. For 2016, we finished 21 projects totaling 763,000 square feet, including the 81,000 square feet constructed last year. The investment for these projects totaled $227,100,000 for a weighted average return of 8%. In total, for the year, we constructed 807,000 square feet of new gross leasable area, which included almost 500,000 square feet built for our principal tenant, Loblaw.
The total GLA we constructed this year also includes 146,000 square feet of new GLA for projects targeted for completion in 2017 and are ready for tenant possession. For 2017, we expect to complete projects totaling 337,000 square feet of new gross leasable area with a total investment of $119,000,000 with expected yields that range from 6% to 9%. Turning to leasing. Activity during the fourth quarter resulted in commitments for approximately 416,000 square feet of GLA. This includes approximately 112,000 square feet of renewals, representing a renewal rate of 65.4%, for which we obtained an average rent increase of 7%.
In 2016, the occupancy rate for our ancillary space increased to 90% from 87.5 at the end of twenty fifteen. And overall, we continue to maintain our total portfolio's high occupancy rate, which stood at 98.9% at the end of twenty sixteen. With that, I will turn the call over to Bart to provide you with a review of the financials for the quarter. Thanks, John, and good morning, everyone. I refer you to Slide nine of our presentation, where you'll find selected financial results for the fourth quarter.
As of December 3136, Choice Properties portfolio comprised five thirty five properties with a total gross leasable area of 43,600,000 square feet. Under IFRS, our investment properties were valued at approximately CAD9.1 billion based on a weighted average cap rate of 6.12% compared with a 6.17% cap rate at the end of twenty fifteen. For the quarter, rental revenue was $197,700,000 and net operating income was 139,700,000.0 three 0.55.8% higher than in Q4 twenty fifteen respectively. The increases were primarily due to acquisitions, which contributed $4,500,000 in incremental revenue and $2,800,000 in incremental NOI. On a same property, same GL or same store basis, NOI increased to $133,000,000 or 1% from $131,600,000 in Q4 twenty fifteen.
The increase in same store NOI was primarily driven by higher capital recoveries. For the full year, rental revenue was $783,600,000 and NOI was 5 and $46800000.0.5.4 percent and 6.3 percent better than 2015, respectively. On a same store basis, NOI increased 1.8% to $507,700,000 from $498,800,000 in 2015, driven by the same factors I mentioned before. General and administration expenses for the quarter, excluding the impact of unit based compensation and internal expenses for leasing, were $5,900,000 compared to $4,100,000 for Q4 twenty fifteen. G and A expenses on the similar basis for the full year were $21,700,000 or 2.8% of revenue compared to $19,100,000 or 2.6% of revenue last year.
For 2017, we expect to maintain our G and A run rate as a percentage of revenue with the amount being approximately 2.5%. Funds from operations for the quarter was $103,100,000 or $0.02 $51 per unit compared to $100,500,000 or $0.02 $47 per unit in Q4 twenty fifteen. The improvement of FFO over the comparative period was largely due to income from operations offset by interest and other financing charges and higher G and A expenses. For 2016, FFO was $410,100,000 or $1 per unit, a 5.4 improvement over 2015. The main drivers of the growth in FFO was the improvement in income from operations, interest and other financing charges and G and A expenses.
AFFO for Q4 was 81,800,000.0 or $19.9 on a per unit basis compared to $82,000,000 or $0.02 $01 in the comparative period. For the year, AFFO was 330,200,000.0 or $0.08 $05 per unit compared with $312,900,000 and $0.77 per unit last year. With two increases to our distribution in 2016, our AFFO payout ratio increased to 85.7% compared to 83.7% in 2015. On an annualized basis, we increased our distributions by 9.2% in 2016. In Q4, we expanded our operating lines with an additional $250,000,000 senior unsecured committed revolving credit facility.
The addition of this credit facility provides us with increased financial flexibility and reduces our refinancing and liquidity risk. Subsequent to the quarter, we redeemed the $200,000,000 Series six debentures. We currently have approximately $300,000,000 of liquidity available on our credit facilities. With strong liquidity and a solid balance sheet, we have the capacity and financial flexibility to meet ongoing obligations and invest for future growth. Our debt service coverage ratio is 3.5 times and our weighted average term to maturity is five point two years.
Let me now turn it over to John to provide closing remarks.
Thank you,
Bart. During 2016, our second full year as a fully internalized business, we continued to execute on our growth strategy through our three main levers: acquisitions, development and active management. We had a solid year. Our results reflect the team's commitment and focus on performance and to provide our unitholders with stable, secure and growing distributions. I'm very proud of the progress that the team delivered in 2016.
We'd like to take this opportunity to thank them for their passion and dedication and to congratulate them on another successful year. And now operator, we would be pleased to take questions.
You have a question from Troy MacLean from BMO Capital Markets. Your line is open.
Good morning. Good morning. I understand it's early in the process, But just on Golden Mile, are you still do you still expect 2018 to be the start of the project?
Yes, we do.
Is any spend included in the development schedule for 2018 or 2019 on that project?
Predevelopment dollars, but nothing material.
And then just on the ancillary occupancy, it ticked up quite nicely quarter over quarter and you're now at 90%. You've guided before in the past that we think that could reach the low 90s. Given the increase in Q4, do you expect a further increase in kind of the first half of twenty seventeen? Or is it going take a couple of years to kind of get to your target?
It's going to take a little bit longer, Troy. We don't see it moving that quickly in terms of midyear twenty seventeen. We're certainly active in terms of increasing the occupancy on the balance of the space, but it's going to take us a little bit longer.
And then you completed two third party acquisitions in Q4. What's the outlook for 2017? And the properties you bought so far primarily have been like adjacent sites to existing properties. Would you look at buying something maybe a little bigger that wasn't near one of your current properties?
We would. We're looking for assets that fit within our core strategy and we look for assets where there's a value add opportunity. And they don't necessarily have to be adjacent sites. The adjacent sites give us the ability for bigger development opportunities down the road. But if we see something that comes along that we think we can add value to, then we'll certainly take a very strong look at it.
Are you seeing much many opportunities in a third party market?
We are active. We're looking. We see opportunities that come available on a weekly basis, if you will, and we do pay attention to them. We haven't seen anything yet, obviously, that caught our attention, but we're still we're actively looking.
Perfect. I'll turn it back. Thank you.
Thank you.
I have no further questions in queue. I turn the call back over to the presenters for closing remarks.
Thank you, operator, and thank you all for joining our conference call today, and we look forward to speaking with you in April to report on our Q1 results. So have a great day.
Thank you, everyone. This concludes today's conference call. You may now disconnect.