Huntingdon Capital Corp. announces sale of Winnipeg office property and provides an update on leasing activities
RICHMOND, BC, Dec. 23, 2013 /CNW/ - Huntingdon Capital Corp. (the "Corporation" or "Huntingdon") (TSX: HNT), (TSX: HNT.DB) (TSX: HNT.WT) announced that it has agreed to sell 1700 Ellice Avenue located in Winnipeg, Manitoba to FAM Real Estate Investment Trust ("FAM REIT") and Huntingdon has also provided a leasing update to its investment portfolio.
Sale of 1700 Ellice Avenue, Winnipeg, Manitoba
Consistent with our strategy of vending-in mature assets and growing our management fee stream, Huntingdon sold the 30,268 sf office property to FAM REIT for $4 million. The property was one of three buildings which makes up the Century Business Park in Winnipeg. FAM REIT already owns the remaining two buildings. The sale price reflects a capitalization rate of 8.4% and is consistent with Huntingdon's book value. The sale will be done on a tax-deferred basis through the issuance of 466,094 Class B limited partnership units of FAM Management Limited Partnership, a subsidiary of FAM REIT, with a current yield of 8.7%.
This acquisition by FAM REIT will increase Huntingdon's recurring management fees by approximately $30,000 per annum and will increase its ownership stake in FAM REIT to 29.2%
Huntingdon is also pleased to announce that it has successfully generated leasing momentum on two of its properties.
Charleswood Square, 4910 Roblin Boulevard, Winnipeg, Manitoba
Charleswood Square is a 34,047 sf retail strip center in the west end of Winnipeg. Despite active marketing of this property to prospective retailers, it has experienced chronic vacancy since 2008. The property has a favourable parking ratio and superior access to main thoroughfares.
Recently, Huntingdon was awarded a commitment to lease approximately 14,000 sf to a government agency for a 15 year term, subject to completion of final documentation. The occupancy of this property will increase from 50% to 91%. This new tenancy is expected to generate increased traffic, drive rental growth and enhance the property valuation. The new tenancy will improve Huntingdon's overall portfolio occupancy by 50 bp to 76.3% based on the reported occupancy as at September 30, 2013.
365 Hargrave Street, Winnipeg, Manitoba
365 Hargrave is a 71,783 sf heritage office property in downtown Winnipeg. The major tenant who occupies approximately 64,000 sf is the Government of Canada whose lease expires in June 2015.
Huntingdon has been awarded a commitment for a new 10-year lease with the Government of Canada at market rents, subject to completion of final documentation. This long-term renewal improves the weighted average lease term of the portfolio and provides an uplift to cash flow as rents increase to market rates.
Sandeep Manak, President and CEO of Huntingdon commented, "The successes of our leasing efforts as well as the sale of 1700 Ellice to FAM REIT reflect our value creation initiatives. Shareholder's equity will benefit from the increase in the recurring fee stream from FAM REIT as well as the valuation uplift from the lease-up in our portfolio."
Huntingdon is a real estate operating company listed on the TSX (Common Shares: HNT; Debentures: HNT.DB; Warrants: HNT.WT). Huntingdon owns and manages a portfolio of 35 industrial, office, retail and aviation-related properties throughout Canada with a total gross leasable area of 2.7 million square feet. In addition, Huntingdon owns a 29.2% interest in FAM REIT (TSX: F.UN, TSX:F.WT) and manages, on behalf of FAM REIT, a portfolio of 29 industrial, office, and retail properties throughout Canada with a gross leasable area of 1.9 million square feet.
Certain statements contained in this press release may constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "plan", "expect", "may", "will", "intend", "should", and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. These risks and uncertainties include, but are not limited to, general and local economic and business conditions; the financial condition of our tenants; our ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest rate fluctuations. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. The forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results or events to differ materially from current expectations including, but not limited to, the risks detailed from time to time in Huntingdon's filings with Canadian provincial securities regulators, including its most recent annual information form and management's discussion and analysis. Huntingdon cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and Huntingdon does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change, except as required by applicable law.
The Toronto Stock Exchange has not reviewed nor approved the contents of this press release and does not accept responsibility for the adequacy or accuracy of this press release.
SOURCE Huntingdon Capital Corp.For further information:
Sandeep Manak, Director, President and Chief Executive Officer
Tel: (604) 249-5113
Fax: (604) 249-5101