Scott's delivers on its long-term diversification strategy, signs sale
and leaseback agreement with Canada's largest retail drug store chain
TORONTO, Nov. 16 /CNW/ - Scott's Real Estate Investment Trust (TSX: SRQ.UN) ("Scott's REIT") announced today that it has signed a purchase agreement with certain wholly owned subsidiaries of Shoppers Drug Mart Corporation (TSX:SC) to acquire 12 retail properties across Canada. The $30-million sale and leaseback transaction, subject to satisfactory completion of due diligence and other customary closing conditions, is scheduled to be completed by the end of the year.
"We are in a unique position to capitalize on the current real estate market," said John I. Bitove, Chairman and CEO of Scott's REIT. "We believe this $30-million acquisition will be a mutually beneficial relationship with Canada's largest retail drug store chain and will provide Scott's with further growth opportunities."
Throughout the tight credit markets, Scott's REIT has demonstrated the strong performance and financial flexibility needed to pursue strategic acquisitions, while maintaining stable, consistent cash distributions to its unitholders. Over the past four years, the REIT has created a successful and sustainable business model by focusing solely on "small-box" retail properties less than 50,000 sq. ft. With this acquisition Scott's will have completed more than $100 million in profitable acquisitions since its IPO, making it one of the industry's top performers.
"In 2005, we recognized an opportunity to build a profitable niche market in Canada by focusing primarily on small-box properties," said Bitove. "This acquisition further validates the success of that strategy as we continue to expand beyond the quick-service restaurants to include strong national tenants in growth industries such as pharmacies, banks and other reliable sectors."
Once the acquisition is complete, Scott's REIT will own a portfolio of 219 retail properties in seven provinces across Canada. Under the terms of the agreement, Scott's REIT will purchase a total of 148,169 sq. ft. of single and multi-tenant retail space in Nova Scotia, Quebec, Ontario, Manitoba and Alberta. The properties are leased long-term to Shoppers Realty Inc. and are tenanted by Shoppers Drug Mart, Pharmaprix and Shoppers Home Health Care stores.
About Scott's Real Estate Investment Trust
Scott's REIT (TSX: SRQ.UN) is Canada's premier small-box retail property owner with 207 current properties in seven provinces across Canada. Scott's REIT's properties are well-located and geographically diverse across Canada and nearly all properties are long-term quadruple net leases. The REIT has a 68.9 per cent interest in Scott's Real Estate LP. To find out more about Scott's Real Estate Investment Trust (TSX: SRQ.UN), visit our website at http://www.scottsreit.com.
This media release contains forward-looking statements. Such statements are based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from projections suggested in any forward-looking statements due to factors such as the competitive nature of the quick service restaurant industry, the ability of Scott's REIT and Scott's Real Estate LP to execute a growth and development strategy, the reliance of Scott's REIT and Scott's Real Estate LP on key personnel, on Priszm LP and risk associated with the structure of income trusts. Scott's REIT and Scott's RE LP assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements. Additional information identifying risks and uncertainties is contained in Scott's REIT filings with the Canadian securities regulators, available at www.sedar.com.
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