Scott's Real Estate Investment Trust announces January distribution and provides an update on Priszm
TORONTO, Jan. 18, 2012 /CNW/ - Scott's Real Estate Investment Trust (TSX: SRQ.UN) ("Scott's REIT") today announced a cash distribution for of $0.0708 per unit for the month of January 2012. The distribution will be payable on February 15, 2012 to Unitholders of record on January 31, 2012.
Scott's REIT reviews the amount of its distributions on an ongoing basis and considers a number of factors including expected cash flows based on occupancy rates, operating expenses, capital expenditures and debt service requirements. Although Scott's REIT has maintained the same distribution amount for 74 consecutive months in accordance with its distribution policy, there can be no assurance that any future distributions will be at the current level.
Update on Priszm
On January 16, 2012, the Receiver (Duff & Phelps Canada Restructuring Inc., formerly Richter Inc.) for Priszm Income Fund ("Priszm") gave notice to the REIT that it intends to disclaim an additional eleven leases effective January 27, 2012. All eleven leases are located in the province of Quebec.
The REIT plans to market the eleven sites immediately and will either re-lease or potentially dispose of the properties.
"We believe we are getting close to understanding what restaurants KFC will be operating after Priszm completes the sales of its restaurants to new operators, and this will help us stabilize our portfolio going forward," said Teresa Neto, CFO of Scott's REIT. "While it has taken a year to get through this process, Scott's REIT will come out of the Priszm situation stronger, with more tenant diversity and upgraded assets."
In total, Priszm has turned back 43 sites thus far (including the 11 disclaimed Quebec sites) of which 14 have been re-leased.
"It will take the balance of 2012 to re-lease the bulk of these sites, but so far Scott's REIT has received strong interest in most of the vacant locations," said Ms. Neto. "We finished the year with an occupancy rate of approximately 95.1 per cent which is a strong number. Including committed occupancy and these eleven disclaimed sites our occupancy drops only modestly to 93.6 per cent."
Scott's REIT continues to pursue its claim on the proceeds from the sales of Priszm's operations, and the Receiver continues to set aside $13.4 million from those proceeds until such claim is determined. There can be no assurance as to the outcome of any litigation involving this claim.
About Scott's Real Estate Investment Trust
Scott's REIT (TSX: SRQ.UN) is Canada's premier small-box retail property owner with 229 properties in eight provinces across Canada. Scott's REIT's properties are well located and geographically diverse across Canada with the majority of all properties containing long-term quadruple net leases. To find out more about Scott's Real Estate Investment Trust (TSX: SRQ.UN), visit our website at www.scottsreit.com.
This document contains certain information that may constitute forward-looking information within the meaning of securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking information may relate to management's future outlook and anticipated events or results, and may include statements or information regarding future growth opportunities and potential and expected cash distributions or cash distribution levels. In particular, information regarding the REIT's monthly cash distributions and information relating to the impact of the REIT's recent acquisitions on annual revenues and interest expense is forward-looking information. Forward-looking information is based on certain factors and assumptions regarding, among other things, occupancy rates, property expense and capital expenditures. While the REIT considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward looking-information is subject to certain factors, including risks and uncertainties, which could cause actual results to differ materially from what is currently expected. Such factors include risks relating to the REIT's reliance on Priszm LP, the REIT's largest tenant in terms of rental revenue, risks associated with investment in real property, competition, reliance on key personnel, financing and refinancing risks, environmental matters, tenant risks, risks related to current economic conditions and other risk factors more particularly described in the REIT's Annual Information Form for the year ended December 31, 2010. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Other than as required by applicable Canadian securities law, the REIT does not undertake to update this information at any particular time. Additional information identifying risks and uncertainties is contained in Scott's REIT filings with the Canadian securities regulators, available at www.sedar.com.
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