MONTREAL, Dec. 14 /CNW Telbec/ - Homburg Canada Real Estate Investment Trust (the "REIT") (TSX: HCR.UN) announced today its first major acquisitions since completing its initial public offering in late May, 2010. The acquisitions, which include a Montreal office complex and a shopping centre in Bathurst, New Brunswick, are for a gross purchase price of $44 million, excluding closing and transaction costs. The price represents a weighted average going-in capitalization rate of approximately 8.5%. The two transactions add approximately 6% or 384,466 square feet of new assets to the REIT's portfolio, bringing the total portfolio to approximately 6.9 million square feet.
Terms of the acquisitions
The REIT has entered into a binding agreement to acquire a 168,947 square foot office building in Montreal, known as the Complex Papineau-Levesque, for $30 million. The purchase price for this office building will be satisfied initially through the use of cash on hand from the proceeds of the recent $85.5 million public offering, with long term financing expected to be placed on the office building in the first quarter of 2011. The closing of the transaction is expected to be completed by year end 2010 and is subject to standard closing conditions.
In Bathurst, the REIT has acquired the remaining 94.4% equity interest in the limited partnership that owns Place Bathurst Mall, a 216,923 square foot retail shopping centre in which the REIT already held a 5.63% interest. The REIT is also currently the property manager of the shopping centre. The gross purchase price of the additional 94.4% interest was approximately $14 million, which was satisfied through the payment of approximately $6.7 million of cash on hand, the assumption of a $6.7 million 5.83% first mortgage maturing in August, 2012 and miscellaneous working capital adjustments of $0.6 million. The vendor was a limited partnership comprised of 143 limited partners.
Complex Papineau-Levesque, Montreal
Complex Papineau-Levesque is comprised of two adjacent five storey office towers totaling 168,947 square feet of gross leasable area, 1.1 acres of land and 267 parking stalls of which 258 are underground. It is strategically situated on the northwest corner of the intersection of Papineau Avenue and Rene-Levesque Boulevard East in Montreal, where it is within three kilometers of downtown. The area, which is known as "Cité des Ondes," benefits from a concentration of television and radio companies. The building is in close proximity to the Papineau metro station with access to all major thoroughfares in the area, including Highways 20, 25, and 720, as well as the Jacques-Cartier Bridge, one of Montreal's main access points. The building is 100% occupied by 13 high-quality diversified tenants including Astral Media and SSQ Life Insurance Company. Five major tenants account for approximately 75% of the area with the average lease maturity of the total building at just less than five years.
Place Bathurst Mall
Place Bathurst Mall is the dominant retail destination in the Bathurst region in New Brunswick. It is a community enclosed shopping centre totaling 216,923 square feet of gross leasable area on 19 acres of land including approximately 1,050 parking stalls. The centre is located on St. Peter Avenue in the city of Bathurst, New Brunswick. It is well positioned on one of Bathurst's main traffic arteries and is in close proximity to residential communities and other commercial development. The top seven tenants of the mall, which are either publicly traded or important private operators, represent 70% of the gross leasable area of the mall. Place Bathurst Mall is 96% leased and includes anchor tenants of Zellers, Sears and Staples comprising 121,000 square feet of gross leasable area.
"We are pleased with these acquisitions, which meet our declared objective of creating accretive external growth through the purchase of quality assets," said Jim Beckerleg, President and Chief Executive Officer. "The properties are close to our strong Montreal and Dartmouth management platforms and can be absorbed efficiently into our operations. We look forward to similar portfolio additions in the near future."
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, comprised mainly of retail and office properties with certain industrial properties, as well as certain income-producing multi-family residential properties. The properties comprise approximately 6.8 million square feet of commercial gross leasable area and 1,725 multi-family residential units located in Quebec, Atlantic Canada, Western Canada and Ontario.
This press 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 prospectus of the REIT dated May 14, 2010.
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 press 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, which are available on SEDAR at www.sedar.com.
For further information: For further information:
|James W. Beckerleg
President and Chief Executive Officer
Homburg Canada Real Estate Investment Trust
514-931-2591 ext. 358
|Paul de la Plante
NATIONAL Public Relations
|Gordon G. Lawlor, CA
Chief Financial Officer
Homburg Canada Real Estate Investment Trust
514-931-2591 ext. 313