TORONTO, ONTARIO -- (Marketwired) -- 04/15/13 -- Canadian Real Estate Investment Trust (CREIT) (TSX: REF.UN) announced that it has entered into an agreement to acquire three high quality unenclosed shopping centres.
CREIT will acquire a 50% managing interest in two centres located in Quebec City, Quebec and a 100% interest in one centre located in Moncton, New Brunswick. Typical due diligence conditions have been satisfied and the transaction is subject to standard closing conditions. The closing is scheduled to occur prior to the end of the second quarter of 2013.
CREIT initially entered into an agreement with the Vendor to acquire a 100% interest in the three properties for a purchase price of $301.0 million. CREIT then subsequently entered into an agreement to sell a 50% non-managing interest in the two Quebec City properties to a subsidiary of a Canadian pension fund with all closings taking place simultaneously. CREIT's share of the purchase price for the properties is $181.5 million which represents a capitalization rate of 6.1% (excluding management fees).
A description of the three properties is as follows:
1. Sainte Foy Centre, Quebec City, QC (50% interest)
Sainte Foy Centre is located at the northwest corner of Highway 40 and Highway 540 in the western part of Quebec City. Average traffic volume on these highways at the property is approximately 100,000 vehicles per day.
Sainte Foy Centre is comprised of approximately 526,000 square feet of retail space (excluding shadow anchor space) on 59.3 acres of land (both at 100%). The property is 99.6% leased to high quality retailers and is anchored by Walmart and is shadow anchored by a Super C grocery store (Metro owned chain).
2. Mega Centre Lebourgneuf, Quebec City, QC (50% interest)
Mega Centre Lebourgneuf is located at the northwest corner of Highway 73 and Highway 40 in central Quebec City. Average traffic volume along the property is approximately 225,000 vehicles per day.
Inclusive of shadow anchor space, Mega Centre Lebourgneuf is comprised of over 1,000,000 square feet of developed space. Retailer owned shadow anchors include Costco, Canadian Tire, Home Depot and a Maxi grocery store (Loblaw owned chain).
The property to be acquired is comprised of approximately 457,000 square feet of leasable area on 47.6 acres of land (both at 100%). This space is 100% leased to a strong roster of predominantly national tenants.
3. Wheeler Park Power Centre, Moncton, NB (100% interest)
Wheeler Park Power Centre is the dominant shopping centre in Moncton's primary unenclosed retail node. It is located at the northeast corner of Wheeler Road and Mountain Road approximately 1.5 kilometres from the Trans-Canada Highway.
Wheeler Park Power Centre is shadow anchored by Costco, Loblaws Superstore and Kent Building Supplies. Inclusive of shadow anchors, the shopping centre has approximately 600,000 square feet of retail area. The property to be acquired is comprised of approximately 272,000 square feet of retail space on 16.9 acres of land and is 100% leased to national tenants.
In the total transaction, CREIT will acquire approximately 763,000 square feet (at CREIT's share) of space that is 99.9% leased.
CREIT's share of the total purchase price of $181.5 million will be partially satisfied by the assumption of approximately $39.6 million of existing mortgage debt, carrying a weighted average interest rate of 5.0% and a weighted average term to maturity of 2.8 years. The purchase price will be reduced by a mark-to-market adjustment (in favour of CREIT) that will reduce the effective interest rate on the assumed debt to 3.0%.
CREIT has also entered into an agreement for a new mortgage secured by the Sainte Foy property. CREIT's share of the loan (50%) is approximately $42.5 million. The loan has a term of ten years with a 3.57% interest rate. The balance of the purchase price will be funded with cash on hand and through bank facilities.
Adam Paul, Executive Vice President, Investments and Leasing of CREIT said "Each of these assets are established and dominant properties in their respective markets. Strong retailer demand for space in these high quality centres has resulted in a long-term track record of exceptionally high occupancy levels. Properties of this calibre are difficult to acquire, so we are pleased to add these shopping centres to our portfolio."
GTA Industrial Development
CREIT's development program is continuing to progress very well. Of note, Phase I of CREIT's Milton Distribution Facility in the Greater Toronto Area (GTA) West market is nearing completion.
CREIT owns an 85% interest in the property. Phase I is comprised of 635,000 square feet (at 100%) of rentable area that is fully leased to Lowes Canada on a long-term basis. This facility will serve as the main distribution centre for all of Lowes' retail stores in Canada. The property was recently turned over to the tenant for fixturing and the rent commencement date is scheduled to be May 7, 2013.
On April 3, 2013, the National Association of Industrial and Office Properties (NAIOP) held their annual GTA chapter Real Estate Excellence Awards. CREIT, together with its development partner, were pleased to be recognized with the Industrial Lease Deal of the Year award for the lease transaction with Lowes in this project.
About CREIT
CREIT is a real estate investment trust focused on accumulating a portfolio of high-quality real estate assets and delivering the benefits of real estate ownership to Unitholders. The primary benefit is a reliable and, over time, increasing cash distribution. CREIT owns a diversified portfolio of retail, office and industrial properties.
Please visit our website at www.creit.ca.
Cautionary Statements Regarding Forward-looking Statements
This news release contains forward-looking statements relating to our operations and the environment in which we operate, which are based on our expectations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. We undertake no obligation to publicly update any such statement, to reflect new information or the occurrence of future events or circumstances, except as required by law.
Contacts:
Canadian Real Estate Investment Trust
Adam Paul
Executive Vice President, Investments and Leasing
416-628-7798
apaul@creit.ca
Canadian Real Estate Investment Trust
Rael Diamond
Chief Financial Officer
416-628-7861
rdiamond@creit.ca
www.creit.ca
