Homburg Canada Real Estate Investment Trust closes initial public offering


MONTREAL, May 25 /CNW/ - Homburg Canada Real Estate Investment Trust (the "REIT") (TSX: HCR.UN) announced today the closing of its initial public offering of 16,000,000 units of the REIT (the "Units") at a price of $10.00 per Unit, for total gross proceeds of $160,000,000. At this issue price, the Units will provide REIT unitholders with an expected cash-on-cash yield of 9.5% annually. The first distribution, for the period from closing to June 30, 2010, will be paid on July 15, 2010 and will be in the amount of $0.09705 per Unit. The REIT intends to make subsequent monthly cash distributions in the amount of $0.07917 per Unit commencing on August 15, 2010 for the month of July 2010. The Units are listed on the Toronto Stock Exchange under the symbol "HCR.UN".

"We are extremely proud to launch the Homburg Canada REIT, which holds a high-quality diversified portfolio of income-producing properties, many of which are landmark or significant buildings in the communities where they are located," said Jim Beckerleg, President and Chief Executive Officer of Homburg Canada REIT. "The REIT is managed by an experienced internalized management team with a strong board comprised of a majority of independent trustees. We believe that the Homburg Canada REIT will quickly become one of the reference points for quality income-producing properties in Canada."

Upon closing of the offering, the REIT acquired a portfolio of Canadian income producing real estate properties (the "Initial Properties") from Homburg Invest Inc. ("HII") and Homburg Canada Incorporated ("HCI") and the management business carried on by HCI in respect of the Initial Properties.

The Initial Properties are comprised mainly of retail and office properties with certain industrial properties, as well as certain income-producing multi-family residential properties. Included are landmark and prominent properties such as Place Alexis Nihon and the CN Central Station Complex in Montreal, Confederation Court Complex in Charlottetown and an interest in the Penn West Plaza in Calgary. With over $1 billion in assets, Homburg Canada REIT will be a significantly sized trust among publicly traded REITs in Canada.

"Homburg Canada REIT combines continuity of personnel with high quality Canadian assets, in a new organization", said Mr. Beckerleg. "The REIT will be focused on bringing best-in-class, value-added property management service to tenants, growing in each of our key markets and on creating value for our unitholders," he added. "Our three solid operating platforms in Montreal, Halifax/Dartmouth and Calgary provide us with substantial leverage to expand more deeply into existing and new adjacent geographic markets", he concluded.

The offering was underwritten by a syndicate of underwriters led by TD Securities Inc. which included National Bank Financial Inc., Desjardins Securities Inc., CIBC World Markets Inc., Scotia Capital Inc., Canaccord Genuity Corp., HSBC Securities (Canada) Inc., Dundee Securities Corporation and Beacon Securities Ltd.

An option to purchase up to an aggregate of 2,400,000 additional Units at the offering price has been granted to the underwriters of the offering, of which up to 960,000 Units are to be issued and sold by the REIT from treasury and 1,440,000 Units are to be sold by HII (one of the promoters of the REIT) as a secondary offering of a portion of the Units it will hold as a retained interest in the REIT, on a pro rata basis between the REIT and HII. The option may be exercised by the underwriters for a period of 30 days following closing of the offering.

The Units have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of that Act. This news release does not constitute an offer for sale of these securities in the United States of America or in the European Economic Area.

This press release contains forward-looking statements which reflect the REIT's current expectations regarding future events. The forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. The REIT disclaims any obligation to update these forward-looking statements, except as required by law.

About Homburg Canada Real Estate Investment Trust

Homburg Canada Real Estate Investment Trust is a recently created 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 6.6 million square feet of commercial gross leasable area and 1,725 multi-family residential units located in Québec, Atlantic Canada, Western Canada and Ontario.


For further information: For further information: James W. Beckerleg, President and Chief Executive Officer, Homburg Canada Real Estate Investment Trust, (514) 841-9725 ext. 358; Gordon G. Lawlor, CA, Chief Financial Officer, Homburg Canada Real Estate Investment Trust, (902) 468-2850 ext. 236; Paul de la Plante, NATIONAL Public Relations, (514) 843-2332

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