WINNIPEG, Jan. 31 /CNW/ - Artis Real Estate Investment Trust ("Artis" or
the "REIT") confirmed today that it has entered into an unconditional
agreement to lease 173,674 square feet of space in the Heritage Square office
building in Calgary, Alberta (the "Heritage Square Agreement") to a well-known
International Engineering and Consulting Services firm. The Heritage Square
Agreement represents approximately 3% of the REIT's total rentable area. The
new tenant has committed to a 5 year and 2 month term commencing July 1, 2008;
the new lease replaces an existing tenancy which expires June 30, 2008.
At January 1, 2008, Artis had approximately 737,000 square feet of
rentable area coming up for renewal in 2008. Including the Heritage Square
Agreement, Artis has already renewed approximately 56% of the 2008 square
footage expiring, with an average lease term of 5 years. Rental rates achieved
on the renewal terms are higher than the in-place rental rates on the expiring
terms, as illustrated below. The renewals completed to date are anticipated to
add approximately $3 million to the REIT's base rent on an annualized basis.
2008 Renewal Activity: Rentable Area Increase in Base
(Square Feet) Rent
Heritage Square Agreement 173,674 124%
Willowglen Business Park 65,195 91%
Other completed renewals 175,618 26%
Total 2008 renewals completed
at January 31, 2008 414,487 79%
Artis also confirmed today that it has entered into an unconditional
agreement to lease an additional full floor of the Grain Exchange Building (in
Winnipeg, Manitoba) to Public Works and Government Services Canada. The
agreement is for 25,363 square feet of currently unoccupied space
(representing 0.4% of the REIT's total rentable area) commencing May 1, 2008,
at competitive rental rates.
"In 2008, our leasing program will be a key component of our continuing
growth story," said Armin Martens, CEO of the REIT. "As our 2008 renewal
activity thus far indicates, leasing fundamentals in our markets continue to
be robust. We believe Artis is well-positioned to realize further rental
growth as the remaining lease maturities are renewed or released and look
forward to stable and growing cash flows from our properties as a result of
our strong embedded growth profile."
In 2007, Artis concluded approximately $600 million of accretive
acquisitions. The REIT's 2007 acquisitions were financed from the proceeds of
equity offerings during the year, and from new mortgage or other financing.
The weighted average rate of mortgage and other financing arranged or assumed
was 5.4%; the weighted average term to maturity of the debt was 6.4 years. The
REIT has minimal refinancing exposure in 2008, with two mortgages totaling
less than $10.1 million maturing in the fourth quarter of the year; the
weighted average rate of interest on the maturing mortgages is 6.2%.
Artis is a growth-oriented real estate investment trust focused
exclusively on commercial properties located in primary and growing secondary
markets in western Canada, particularly in Alberta. The REIT's goal is to
provide Unitholders the opportunity to invest in high-quality western Canadian
office, retail and industrial properties, as well as to provide monthly cash
distributions that are stable, tax efficient, and growing over time.
Artis owns approximately $1.1 billion of commercial property, comprising
approximately 6.1 million square feet of rentable area in 81 properties.
Rentable area is approximately 31.7% in Manitoba, 6.8% in Saskatchewan, 56.7%
in Alberta, and 4.8% in B.C.; by asset class the portfolio is 31.1% retail,
43.0% office and 25.9% industrial.
The REIT's Distribution Reinvestment Plan ("DRIP") allows Unitholders to
have their monthly cash distributions used to purchase trust units without
incurring commission or brokerage fees, and receive bonus units equal to 4% of
their monthly cash distributions. More information can be obtained at
This press release contains forward-looking statements. For this purpose,
any statements contained herein that are not statements of historical fact may
be deemed to be forward-looking statements. Without limiting the foregoing,
the words "expects", "anticipates", "intends", "estimates", "projects", and
similar expressions are intended to identify forward-looking statements. Artis
is subject to significant risks and uncertainties which may cause the actual
results, performance or achievements of the REIT to be materially different
from any future results, performance or achievements expressed or implied in
these forward-looking statements. Such risk factors include, but are not
limited to, risks associated with real property ownership, availability of
cash flow, general uninsured losses, future property acquisitions,
environmental matters, tax related matters, debt financing, unitholder
liability, potential conflicts of interest, potential dilution, reliance on
key personnel, changes in legislation and changes in the tax treatment of
trusts. Artis cannot assure investors that actual results will be consistent
with any forward-looking statements and Artis assumes no obligation to update
or revise such forward-looking statements to reflect actual events or new
circumstances. All forward-looking statements contained in this press release
are qualified by this cautionary statement.
The Toronto Stock Exchange does not accept responsibility for the
adequacy or accuracy of this press release.
For further information:
For further information: Mr. Armin Martens, President and Chief
Executive Officer; Mr. Jim Green, Chief Financial Officer; or Ms. Kirsty
Stevens, Senior Vice President - Investor Relations, (204) 947-1250