HALIFAX, July 2 /CNW/ - Killam Properties Inc. (TSX:KMP/KMP:DB) is
pleased to announce three acquisitions totaling 489 manufactured home
community (MHC) sites. The acquisitions increase Killam's total rental
portfolio to 17,911 units.
On May 30, 2008 Killam acquired Domaine Le Village in Rockland, Ontario,
an MHC located 45 kilometers east of Ottawa. The property, consisting of
74 sites on approximately 35 acres, with an average rent of $242 per month, is
located close to Killam's Lynnwood Gardens and Rockdale Ridge MHCs. The
purchase price of $2.05 million ($27,700/site) was satisfied by a new
five-year mortgage of $1.4 million at 6.23%, with the balance in cash.
On June 27, 2008 Killam acquired Woodhaven Leisure Resort, a 126-unit MHC
located in Forest, Ontario, close to Killam's Paradise Valley. The 50-acre
property includes 25 acres of expansion land zoned for future development,
with an expansion potential for approximately 100 to 150 seasonal sites. The
resort community includes 93 seasonal sites with an average rent of $1,415 per
season, and 33 year-round sites, with an average rent of $212 per month. The
property also contains a recreation hall and numerous recreational facilities,
including a large in-ground pool. The purchase price of $1.7 million
($13,690/site) was satisfied by cash.
Killam will acquire Holiday Park, a 35-acre, 289-site resort community
with many recreation facilities located in Southampton, Ontario, on the shores
of Lake Huron. The community has an average seasonal rent of $1,469 per site,
and contains excess capacity for potential future expansion. The purchase
price is $3.5 million ($12,110/site) and the transaction is expected to close
by July 15, 2008.
"We are pleased to announce these three MHC acquisitions, which have
capitalization rates between 7.5% and 8.0%" stated Philip Fraser, Killam's
President and Chief Executive Officer. "The MHC asset class is attracting
increased attention from investors. We continue to be optimistic on both the
stability and internal growth opportunities offered by the MHC business and
are actively seeking additional acquisitions to expand our portfolio."
"Killam slowed its acquisition activities during the first quarter of
2008, choosing to place increased focus on operations. However, during the
last two months we have increased our acquisition program, leading to the
announcement of these three new properties, and a strong pipeline of potential
acquisitions for the future."
During the second quarter, Killam amended its credit facility; the first
tranche of $30 million, an interim facility, has been cancelled and the second
tranche, to be secured by specific real estate assets, has been extended to
May 27, 2009. The amount available under the agreement varies with the value
of the pledged assets, to a maximum not to exceed $40 million. The facility
offers Killam the right to choose the interest rate on the debt, based on
prime plus 100 basis points on prime rate advances, 200 basis points over
Banker's Acceptances, or 200 basis points over letter of credit fees.
Killam Properties Inc, based in Halifax, Nova Scotia, is one of Canada's
largest residential landlords, owning and operating multi-family apartments
and manufactured home communities.
Note: The Toronto Stock Exchange has neither approved or disapproved of
the information contained herein. Certain statements in this report may
constitute forward-looking statements. Such forward-looking statements involve
risks, uncertainties and other factors which may cause actual results,
performance or achievements of Killam to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements. Killam does not undertake to update any of such
For further information:
For further information: Dale Noseworthy, CA, CFA, Director, Investor
and External Relations, Killam Properties Inc., (902) 442-0388, Fax: (902)
455-4525, firstname.lastname@example.org, www.killamproperties.com