TORONTO, Sept. 13, 2012 /CNW/ - KEYreit (TSX: KRE.UN) ("KEYreit" or the "REIT") commented today that it has been advised that Priszm Income Fund and related entities ("Priszm") received an order by the court approving the sale of 65 restaurants located in Quebec to Olympus Food (Canada) Inc. ("Olympus"), a Canadian subsidiary of a pre-existing KFC franchisee in the Philippines, and a related party to Hi-Flyer Food (Canada) Inc., the entity that purchased the Priszm restaurants in Alberta and Manitoba in May of this year.
Of the restaurant locations being sold, KEYreit is the landlord of 49 locations. The REIT owns two properties that are not part of the sale transaction and these leases have been disclaimed by Priszm with an effective date of September 21, 2012. KEYreit has provided Olympus with the necessary consents to assign the leases for the 49 locations and expects the Olympus purchase to close effective September 17, 2012. With the completion of this sale, Priszm will no longer be a tenant of the REIT.
"The Priszm matter has now reached its conclusion. We are very pleased to put this issue behind us", said Teresa Neto, Chief Financial Officer of the REIT. "In March 2011, we started with 188 locations leased to Priszm. Today we have nearly 20 different tenants leasing these same properties, including well-known national tenants such as A&W, Pizza Pizza, Starbucks, McDonalds & Subway; and even greater tenant diversification is expected as the REIT completes its final re-leasing plans. This final Priszm sale allows KEYreit to move on from this chapter in its history and to fully focus on growing the REIT with a strong, diversified and stable tenant base across Canada."
KEYreit continues to pursue its claim in respect of certain of the sales proceeds relating to Priszm's sales of its restaurants.
Including the two disclaimed Quebec leases noted above, a total of 47 leases were disclaimed out of the original 188 Priszm leases. As of today's date, KEYreit has leased 34 of the disclaimed sites, or 73% of the total disclaimed gross leasable area.
"The re-leasing of the remaining 13 vacant sites continues to be one of KEYreit's immediate priorities," said Kevin Salsberg, Chief Operating Officer of KEYreit. "We expect the majority of these sites to either be re-leased or sold over the next 12 months."
This MD&A contains certain information or statements that may constitute forward-looking information within the meaning of securities laws, which reflect the current view of KEYreit with respect to the REIT's objectives, plans, goals, strategies, future growth, results of financial performance, financial and operating performance and business prospectus and opportunities . In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. In particular, forward-looking information included in this MD&A includes, but is not limited to, statements with respect to the REIT's ability to lease vacant property units, collect minimum rents, diversify its tenant base, undertake land intensification projects, refinance loans and mortgages at their maturity, complete accretive acquisitions, and maintain or grow monthly cash distribution levels, and also with respect to the timing of such events. Forward-looking information should not be read as guarantees of future events, performance or results, and will not necessarily be accurate indications of whether, or the times at which, such events, performance or results will be achieved. All of the statements and information in this MD&A containing forward-looking information are qualified by these cautionary statements.
Forward-looking statements are based on information available at the time they are made, underlying estimates and assumptions made by management and management's good faith belief with respect to future events, performance and results, and are subject to inherent risks and uncertainties surrounding future expectations generally which could cause actual results to differ materially from what is currently expected. Such risks and uncertainties include, but are not limited to the REIT's reliance on key tenants, risks associated with investment in real property, competition, reliance on key personnel, financing and refinancing risks, distributions, environmental matters, tenant risks, risks related to current economic conditions and other risk factors more particularly described in the REIT's most recent Annual Information Form available on SEDAR at www.sedar.com. Additional risks and uncertainties not presently known to the REIT or that the REIT currently believes to be less significant may also adversely affect the REIT.
KEYreit cautions readers that the list of factors is not exhaustive and that should certain risks or uncertainties materialize, or should underlying estimates or assumptions prove incorrect, actual events, performance and results may vary significantly from those expected. There can be no assurance that the actual results, performance, events or activities anticipated by the REIT will be realized or, even if substantially realized, that they will have the expected consequences to, or effect on, the REIT. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. The REIT disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required under applicable securities laws.
KEYreit (formerly Scott's Real Estate Investment Trust,TSX: KRE.UN) is Canada's premier small-box retail property owner with 229 properties in eight provinces across Canada. KEYreit's properties are well-located and geographically diverse across Canada with the majority of all properties containing long-term quadruple net leases.
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