FREDERICTON, Sept. 12, 2014 /CNW/ - Plaza Retail REIT (TSX: PLZ.UN) ("Plaza" or the "REIT") is pleased to announce the sale of eight former KEYreit properties for total gross consideration of $8.2 million. This brings the total number of former KEYreit properties sold since its acquisition to 31 assets for total gross proceeds of $46.8 million ($45.7 million net of closing costs). These sales were completed at a gain of $10.3 million over the values underwritten by Plaza.
As part of its ongoing strategic review of the former KEYreit portfolio, Plaza has identified certain properties that were deemed desirable to sell as they were characterized by being: (i) outside the REIT's core geographic concentration; (ii) better suited for long term intensification for residential development; and/or (iii) vacant with a low probability of being re-leased to national tenants.
Additionally, the REIT currently has another 10 assets under conditional sales agreements for total gross proceeds of $14.0 million. These conditional transactions, if completed, are anticipated to be sold at a gain of $3.7 million over the values underwritten by Plaza at the time of the KEYreit acquisition.
Plaza has also begun the redevelopment of 10 former KEYreit assets and anticipates completing these redevelopments over the course of the next 12 months.
"We are very pleased with the value extraction process that was initiated upon the closing of the KEYreit transaction," said Michael Zakuta, CEO of the REIT. "This capital can now be redeployed to fund higher yielding development and redevelopment opportunities, building value for our unitholders."
Plaza Retail REIT is a leading retail property owner and developer, particularly in Eastern Canada. Plaza has an entrepreneurial focus with strong "value-add" capabilities. Plaza's current portfolio includes interests in 330 properties totaling approximately 6.7 million square feet across Canada and additional lands held for development. Plaza's properties include a mix of strip plazas, stand-alone small box retail outlets and enclosed shopping centres, anchored by approximately 90% national tenants. Total assets have reached almost $1 billion. Plaza is fully internalized, therefore providing unitholders directly with the synergies that come with an internalized management structure. Plaza has proven its strong "value-add" capabilities to develop, redevelop and acquire retail real estate throughout Canada. Plaza has a strong track record of generating growth in distributions, having increased its distributions at least once every year in the last 11 years.
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SOURCE: Plaza Retail REIT
For further information: on Plaza Retail REIT, visit our website at www.plaza.ca or contact: Floriana Cipollone, Chief Financial Officer (416) 848-4583 or Kim Sharpe, Director of Business Development at (506) 460-8261.