TORONTO, Jan. 6, 2016 /CNW/ - Automotive Properties Real Estate Investment Trust (TSX: APR.UN) (the "REIT") today announced that it has entered into a definitive agreement to purchase the Audi Barrie dealership property in Innisfil, Ontario, for approximately $11.1 million, representing a cap rate of 7.1%. The addition of this property is expected to be immediately accretive to the REIT's Adjusted Funds from Operations ("AFFO") on a per unit basis.
Audi Barrie is a newly constructed, 25,000 square foot automotive dealership located on 3.1 acres along an attractive commercial corridor neighbouring other luxury dealerships at 2484 Doral Drive in Innisfil, near Barrie, Ontario. Audi Barrie was one of the three development properties owned by the Dilawri Group at the time of the REIT's initial public offering ("IPO") in July 2015. Pursuant to the strategic alliance agreement entered into with the Dilawri Group at closing of the REIT's IPO, the REIT has a right of first offer to acquire any REIT-suitable properties from the Dilawri Group's property development pipeline. Audi Barrie, operated by the Dilawri Group, will enter into a 19-year lease with the REIT on closing of the acquisition on the same terms as the leases entered into at closing of the IPO.
"We look forward to adding Audi Barrie, a brand new luxury dealership property, to our portfolio. Audi Barrie's long-term lease will be triple-net with a contractual 1.5% annual rent escalator," said Milton Lamb, President and CEO of Automotive Properties REIT. "This transaction further advances our strategy of levering our relationship with the Dilawri Group to grow our portfolio in support of generating increased cash available for unitholder distributions."
The REIT intends to fund the purchase of the real estate underlying Audi Barrie through a new mortgage with a Canadian chartered bank and a draw on its existing revolving credit facility. The REIT has completed its diligence in connection with this acquisition and closing is expected to occur in January 2016, subject to customary financing and closing conditions.
About Automotive Properties REIT
Automotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive dealership properties located in Canada. The REIT's portfolio of 28 income producing commercial properties represents over one million square feet of gross leasable area in Ontario, Saskatchewan, Alberta, British Columbia and Québec. Automotive Properties REIT is the only public vehicle in Canada focused on consolidating automotive dealership real estate properties. For more information, please visit: www.automotivepropertiesreit.ca
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events and in some cases can be identified by such terms as "will","expected" and "intends". Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risks and Uncertainties" in the REIT's management's discussion and analysis ("MD&A") most recently filed on SEDAR (www.sedar.com). The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
Non-IFRS Financial Measure
This news release contains a financial measure which is not defined under IFRS and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. AFFO is a key measure of performance used by real estate businesses. This measure is not defined by IFRS and does not have a standardized meaning prescribed by IFRS, and therefore should not be construed as an alternative to net income or cash flow from operating activities calculated in accordance with IFRS. The REIT believes that AFFO is an important measure of economic performance and is indicative of the REIT's ability to pay distributions. The IFRS measurement most directly comparable to AFFO is net income. Please refer to the REIT's MD&A for further discussion of this non-IFRS financial measure.
SOURCE Automotive Properties Real Estate Investment Trust
For further information: please contact: Bruce Wigle, Investor Relations, Bay Street Communications, Tel: 647-496-7856; Milton Lamb, President & CEO, Automotive Properties REIT, Tel: (647) 789-2445; Andrew Kalra, CFO & Corporate Secretary, Automotive Properties REIT, Tel: (647) 789-2446