CALGARY, June 28, 2013 /CNW/ - Boardwalk Real Estate Investment Trust ("BEI.UN" - TSX)
Boardwalk Real Estate Investment Trust ("Boardwalk", "The Trust") is pleased to announce that it has received final acceptance from the Toronto Stock Exchange for a Normal Course Issuer Bid ("The Bid") commencing on July 3, 2013, and terminating on July 2, 2014 or such earlier time as the Bid is complete.
As of June 28, 2013, Boardwalk had 47,878,274 issued and outstanding Trust Units. Boardwalk's public float of trust units is 38,947,120. The Bid allows Boardwalk to purchase up to 10% of its "public float" or 3,894,712 trust units, through the facilities of The Toronto Stock Exchange.
The Trust believes that the current market prices of its Trust Units do not reflect their underlying value. Boardwalk's Management is initiating this program as it feels that there is a significant disparity between the prices being paid for multi-family assets in private markets and the implied value of its portfolio based on the current price of its Trust Units. At current market prices, Boardwalk believes that an investment in its own portfolio represents an effective use of its capital. To that end, Boardwalk has begun the process of marketing select non-core assets now that the clarifying amendments to the Income Tax Act (Canada) relating to the tax treatment of income generated from property sales by publicly traded trusts, more commonly known as the "SIFT Legislation", has been enacted by the Parliament of Canada.
Equity from the sale of these non-core assets will assist with the purchasing of Trust Units at current market prices for cancellation. The Purchase and cancellation of Trust Units increases the proportionate interest of all remaining Unitholders. However, the Trust still believes that continued focus on service and product quality remains key to delivering the best returns to its Unitholders.
Between mid-2007 and the beginning of 2012, the Trust exercised a similar strategy of high-grading its portfolio through the sale of 1,578 Apartment Units, comprised of non-core assets, for total gross proceeds of $171.9 million. The Trust re-deployed this equity into the purchase and cancellation of Trust Units under similar Normal Course Issuer Bids. During this same time period, the Trust re-purchased and cancelled 4,542,747 Trust Units, representing a total investment of $170.5 million, or an average cost of $37.53 per Trust Unit through its previous Normal Course Issuer Bids.
The Trust has not purchased any of its trust units within the past 12 months.
The Trust's daily purchase limit pursuant to the Bid will be 22,289, which represents 25% of the average daily trading volume for the six calendar months prior to the commencement of the Bid of 89,160 Trust Units. Purchases of Trust Units pursuant to this Bid will be completed through the facilities of the TSX and any automated trading system in Canada.
About Boardwalk REIT
Boardwalk REIT is Canada's friendliest landlord and currently owns and operates more than 225 properties with 35,277 residential units (as at March 31, 2013) totaling approximately 30 million net rentable square feet. Boardwalk's principal objectives are to provide its Residents with the best quality communities and superior Customer Service, while providing Unitholders with sustainable monthly cash distributions, and increase the value of its Trust Units through selective acquisitions, dispositions, and effective management of its residential multi-family properties. Boardwalk REIT is vertically integrated and is Canada's leading owner/operator of Multi-Family Communities with 1,600 Associates bringing Customers home to properties located in Alberta, Saskatchewan, Ontario, Quebec, and British Columbia.
Boardwalk REIT's Trust units are listed on the Toronto Stock Exchange, trading under the symbol BEI.UN. Additional information about Boardwalk REIT can be found on the Trust's website at www.BoardwalkREIT.com.
SOURCE: Boardwalk Real Estate Investment Trust
For further information:
Director of Mortgage and Finance