- REIT provides update on acquisitions since IPO -
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TORONTO, Jan. 14, 2016 /CNW/ - Automotive Properties Real Estate Investment Trust (TSX: APR.UN) (the "REIT") today announced that it has closed the previously-announced acquisition of the Audi Barrie dealership property and also provided an update on asset acquisitions since its initial public offering ("IPO").
The REIT purchased the Audi Barrie property for approximately $11.1 million, representing a cap rate of 7.1%. The Audi Barrie dealership, operated by the Dilawri Group ("Dilawri"), has entered into a 19-year, triple-net lease with the REIT, which includes a contractual 1.5% annual rent increase. 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 Dilawri at the time of the REIT's IPO in July 2015. Pursuant to the REIT's strategic alliance agreement with Dilawri, the REIT has a right of first offer to acquire any REIT-suitable properties from Dilawri's property development pipeline. The acquisition of Audi Barrie represents the first such property to be acquired by the REIT.
"Audi Barrie, a brand new luxury dealership property, represents a great addition to our portfolio," said Milton Lamb, President and CEO of Automotive Properties REIT. "This transaction underlines the REIT's strategic advantage inherent in our relationship with Dilawri, Canada's largest automotive dealership group. We look forward to completing more accretive transactions with them in the future."
The REIT funded a portion of the purchase of the Audi Barrie property through a new $7.15 million mortgage with a Canadian chartered bank. The mortgage has an interest rate of 3.22% and matures in five years. The balance of the purchase consideration was satisfied through a draw on the REIT's revolving credit facility.
Management of the REIT is delivering on its mandate to expand and diversify its automotive dealership property portfolio in support of generating increased cash available for distribution. Since the completion of its IPO, the REIT has committed a total of approximately $41.3 million to add three properties comprising four dealerships in Montreal, Edmonton and Innisfil, Ontario. In aggregate, these dealership properties comprise approximately 120,000 square feet of gross leasable area and represent the Toyota, Porsche, Jaguar, Land Rover and Audi brands.
"Through these acquisitions, we have been able to successfully add new brands, enter new urban markets and work with Go Auto and The Dilawri Group, two of the largest dealership operators in Canada. This is directly in line with the strategy outlined during our IPO," added Mr. Lamb. "Further, the acquisitions are immediately accretive to the REIT's AFFO per unit, thereby meeting our objective of generating increased cash flow in support of unitholder distributions."
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 29 income producing commercial properties represents approximately 1.1 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" and "expected". 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: 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