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STELLARTON, NS, April 10, 2012 /CNW/ - Crombie Real Estate Investment Trust ("Crombie") (TSX: CRR.UN) announced today that it has completed the previously announced purchase of a portfolio of 22 retail properties (the "Properties") from third party vendors for $254.6 million (the "Purchase Price"), excluding closing adjustments and transaction costs. The Properties include a total gross leasable area of approximately 850,000 square feet, and with the exception of two assets located in Manitoba and Saskatchewan, all of the Properties are located in Ontario.
"With the completion of this transaction, the REIT has added to its portfolio of high quality assets across Canada and, importantly, increased our geographic diversification, particularly in Ontario." commented Donald Clow FCA, Crombie's President and Chief Executive Officer. "The REIT's acquisition of these high quality assets is anticipated to be accretive to Crombie's Adjusted Funds From Operations ("AFFO") per unit."
The Purchase Price was funded in part through the assumption of $95.7 million in existing mortgages on the Properties with a weighted average term to maturity of 3.8 years and a weighted average interest rate of 4.86% and by applying $116.9 million of net proceeds from Crombie's recently completed public offering of Units and concurrent private placement of exchangeable LP Units. The balance of the Purchase Price and closing adjustments and transaction costs was drawn from Crombie's existing revolving line of credit. Crombie may arrange additional mortgage financing for certain of the properties, which would reduce the required borrowings under its existing line of credit.
Certain terms used in this press release, such as AFFO, are not measures defined under International Financial Reporting Standards ("IFRS") and do not have standardized meanings prescribed by IFRS. AFFO should not be construed as an alternative to net earnings or cash flow from operating activities as determined by IFRS. AFFO, as presented, may not be comparable to similar measures presented by other issuers. Crombie believes that AFFO is useful in the assessment of its operating performance and that this measure is also useful for valuation purposes and is a relevant and meaningful measure of its ability to earn and distribute cash to unitholders. Examples of reconciliations of AFFO to the most directly comparable measure calculated in accordance with IFRS are provided in the MD&A of Crombie for the year ended December 31, 2011.
Crombie is an open-ended real estate investment trust established under, and governed by, the laws of the Province of Ontario. The trust invests in income-producing retail, office and mixed-use properties in Canada, with a future growth strategy focused primarily on the acquisition of retail properties. Crombie currently owns a portfolio of 161 investment properties in nine provinces, comprising approximately 13.5 million square feet of rentable space. More information about Crombie can be found at www.crombiereit.com.
This news release may contain forward looking statements that reflect the current expectations of management of Crombie about Crombie's future results, performance, achievements, prospects and opportunities. Wherever possible, words such as "continue", "may", "will", "estimate", "anticipate", "believe", "expect", "intend" and similar expressions have been used to identify these forward looking statements. These statements reflect current beliefs and are based on information currently available to management of Crombie, and include, without limitation, statements regarding the effect of the acquisition on the financial performance of Crombie including the degree to which the acquisition will be accretive. Forward looking statements necessarily involve known and unknown risks and uncertainties. A number of factors, including those discussed in the 2011 annual Management Discussion and Analysis under "Risk Management", could cause actual results, performance, achievements, prospects or opportunities to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and a reader should not place undue reliance on the forward looking statements. There can be no assurance that the expectations of management of Crombie will prove to be correct.
Readers are cautioned that such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from these statements. Crombie can give no assurance that actual results will be consistent with these forward-looking statements.
For further information:
Mr. Glenn Hynes, FCA
Chief Financial Officer and Secretary