HOMBURG CANADA REIT ACQUIRES THREE OFFICE BUILDINGS IN CALGARY'S CENTRON PARK COMPLEX FOR $39.7 MILLION

Previously announced $17 million office acquisitions in Quebec completed

MONTREAL, June 28, 2011 /CNW Telbec/ - Homburg Canada Real Estate Investment Trust (TSX: HCR.UN) ("Homburg Canada REIT" or the "REIT") announced today that it acquired from CP Developments Inc., a wholly owned subsidiary of Homburg Invest Inc. ("HII"), the three existing office buildings that currently comprise the Centron Park Complex in Calgary's suburban south district, and an interest in lands by way of a purchase option providing the REIT with the right to acquire the four remaining buildings of the Complex, as developed. The three buildings acquired, identified as 100, 200 and 300 Centron Park, added 119,832 square feet of new assets to the REIT's portfolio. The four additional office buildings, to be known as 400, 500, 600 and 700 Centron Park, could, when built and purchased, add a further 286,000 square feet to the REIT's portfolio over the next few years. The gross purchase price for the existing buildings and the purchase option is $39.7 million, excluding closing and transaction costs. This represents a going-in capitalization rate of approximately 7.25%.

"We contemplated adding Centron Park to our office portfolio from the closing of our initial public offering as soon as the appropriate opportunity arose. We are extremely pleased to deliver on this project today. It was completed pursuant to the rights granted to the REIT at the time it was created," said Jim Beckerleg, President and Chief Executive Officer of Homburg Canada REIT. "Calgary is a strengthening market for office space. The addition of this high-quality asset to our portfolio, combined with the REIT's formalized option on the remaining four buildings and related land, puts us in a very favourable position to benefit from this market's increasing dynamism and future growth," Mr. Beckerleg added.

The REIT also announced today the closing of the previously announced transactions to acquire two properties in the province of Quebec, consisting of a two-storey "Class B+" office building located at 2405 Fernand-Lafontaine Boulevard in Longueuil, and a four-storey "Class A" office building located at 6777 de la Rive-Sud Boulevard in Levis. The gross purchase price of $17 million, excluding closing and transaction costs, represented a weighted average going-in capitalization rate of approximately 8%. The two transactions added 113,259 square feet of new assets to the REIT's portfolio.

In total, the REIT completed $56.7 million worth of new acquisitions in the office segment of the market today.

Centron Park's Buildings 100 - 3600 4th Street SE, 200 - 4000 4th Street SE, and 300 - 4000 4th Street SE (Calgary, Alberta)

Centron Park is a "Class A" suburban office complex located in Manchester Commercial Park, a well established light industrial and commercial district situated approximately three kilometres from Calgary's central business district. Currently under development, the Complex will, when completed, include seven one-to-three storey office buildings. The gross purchase price of $39.7 million for buildings 100, 200, 300 and the purchase option will initially be satisfied through the use of the proceeds of the REIT's public offering completed in March, 2011, with long term financing expected to be placed on the office buildings later in the year.

Situated on 1.32 acres of land, building 100 is a 12,517-square-foot, single-storey "Class A" office building comprising 54 parking stalls, 30 of which are underground. Completed in 2011, it is located at the extreme north end of the Complex and will be 100% occupied, with tenant occupancy expected in the third quarter of 2011.

Constructed in 2009, building 200 is a 38,933-square-foot, two-storey "Class A" office building located in the east and centre portion of the Centron Park complex. Situated on a 1.56-acre parcel of land, the multi-tenant building has 129 parking stalls. It is 100%-leased and benefits from a direct access to the major roadway 4th Street SE.

Finally, building 300 is a 68,382-square-foot, three-storey "Class A" office building situated on a 2.76-acre parcel of land at the extreme South East portion of the Centron Park office complex. Expected to be occupied in the third quarter of 2011, the property includes 124 parking stalls, 70 of which are underground. It is multi-tenanted and 100% leased.

The six largest tenants of buildings 100, 200 and 300 include Enercore Projects, Stantec Consulting, Clean Energy, Global Raymac Solutions, Vista Projects and HII. Together, they occupy 96% of the buildings' gross leasable area, with a weighted average lease term (excluding the vendor head lease) of 8.4 years.

The three buildings acquired are subject to a fully-secured vendor head lease over approximately 24 % of the properties' gross leasable area. The terms of the transaction further provide for the REIT to receive income equivalent to 100 % occupancy of the three buildings from the date of closing.

The transaction is a "related party transaction" under applicable securities laws and all independent trustees of the REIT have unanimously approved the terms of the transaction.

About Homburg Canada Real Estate Investment Trust

Homburg Canada Real Estate Investment Trust is an unincorporated open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Quebec. Managed internally, the REIT owns a portfolio of Canadian income-producing commercial properties, consisting mainly of retail and office properties with certain industrial properties, as well as certain income-producing multi-family residential properties. The properties comprise approximately 8.0 million square feet of commercial gross leasable area and 1,725 multi-family residential units located in Quebec, Atlantic Canada, Western Canada and Ontario.

Forward-looking Statements

This news release may contain forward-looking information within the meaning of applicable securities legislation. 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 "Risk Factors" in the REIT's latest annual information form.

The REIT's objectives and forward-looking statements are based on certain assumptions, including that (i) the REIT will receive financing on favourable terms; (ii) the future level of indebtedness of the REIT and its future growth potential will remain consistent with the REIT's current expectations; (iii) there will be no changes to tax laws adversely affecting the REIT's financing capacity or operations; (iv) the impact of the current economic climate and the current global financial conditions on the REIT's operations, including its financing capacity and asset value, will remain consistent with the REIT's current expectations; (v) the performance of the REIT's investments in Canada will proceed on a basis consistent with the REIT's current expectations; and (vi) capital markets will provide the REIT with readily available access to equity and/or debt.

The forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement. All forward-looking statements in this press release are made as of the date of this press release. The REIT, except as required by applicable securities legislation, does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise. Additional information about these assumptions and risks and uncertainties is contained in the REIT's filings with securities regulatory authorities, including its latest annual information form, which are available on SEDAR at www.sedar.com.

SOURCE Homburg Canada Real Estate Investment Trust

For further information:

Investors:
James W. Beckerleg
President and Chief Executive Officer
Homburg Canada REIT
514-931-2591, ext. 358
Gordon G. Lawlor, CA
Executive Vice President, Chief Financial Officer and Secretary
Homburg Canada REIT
514-931-2591, ext. 313
Media:
Anne-Marie Durand
NATIONAL Public Relations
514-843-2319

 

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