HALIFAX, Feb. 5, 2013 /CNW/ - Killam Properties Inc. (TSX: KMP) is pleased to announce that it has completed the acquisition of 1090 Kristin Way, a 102-unit apartment building in Ottawa, Ontario. The eight-storey concrete building is centrally located and adjacent Killam's 621 Cummings Avenue property in the city's East End. The building includes 7 bachelor units, 23 one-bedroom units and 72 two-bedroom units, and has an average rental rate of $817 per month. The purchase price of $10.35 million ($101,500 per suite) was satisfied with cash. The capitalization rate on the acquisition is 5.8%.
Killam has also agreed to acquire a new 83-unit luxury apartment building located at 200 Royale Boulevard in Halifax, Nova Scotia, adjacent The Linden, which was acquired in December 2011. Construction of 200 Royale was completed in December 2012 and is currently 32% occupied. The acquisition includes a rental guarantee of 90% occupancy through to November 2013, minimizing the Company's lease-up risk. The four-storey, concrete apartment building includes underground parking, a social room and a fitness centre. The building's total square footage is approximately 180,000 square feet, and contains 1 one-bedroom unit, 77 two-bedroom units and 5 three-bedroom units. The average rent of $1,547 per unit reflects the building's spacious units, with an average size of 1,400 square feet and includes six appliances and high-end finishes. The purchase price of $19.1 million ($230,000 per suite) represents a capitalization rate of 5.6% (on 97% occupancy). The closing is scheduled to be completed by the end of February 2013 and is expected to be satisfied with a new CMHC insured mortgage (65%) and cash.
In addition, on January 15, 2013, Killam acquired a 5.2 acre development site on Saginaw Parkway in Cambridge, Ontario. Killam owns two luxury buildings (225 units) in Cambridge and has identified the city as one of its target markets for growth in Ontario. The site, acquired for $4.0 million, is currently zoned for a maximum height of seven storeys and density of 180 units. A 125-unit building is planned for the first phase of a two phase development, with construction expected to start in the second half of 2013.
"We are pleased to start the year with $29 million in apartment acquisitions, and the addition of a premium lot for development in Cambridge," noted Philip Fraser, Killam's President and CEO. "These acquisitions complement our existing portfolios in each city. Our focus of growing the portfolio of properties in each of our core markets through both acquisitions and development is expected to lead to increased economies of scale and market presence."
Killam Properties Inc., based in Halifax, Nova Scotia, is one of Canada's largest residential landlords, owning, operating and developing multi-family apartments and manufactured home communities.
Note: The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein. Certain statements in this report may constitute forward-looking statements relating to our operations and the environment in which we operate, which are based on our expectations, estimates, forecast and projections, which we believe are reasonable as of the current date. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of Killam to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For more exhaustive information on these risks and uncertainties, you should refer to our most recently filed annual information form which is available at www.sedar.com. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made and should not be relied upon as of any other date. Other than as required by law, Killam does not undertake to update any of such forward-looking statements.
SOURCE: Killam Properties Inc.
For further information:
Killam Properties Inc.
Dale Noseworthy, CA, CFA
Vice President, Investor Relations & Corporate Planning
Phone: (902) 442-0388