- Asset portfolio increased by 25 per cent in two years
- October distribution marks 23rd consecutive payment to Unitholders
- Management contract change to advance strategy
TORONTO, Oct. 17 /CNW/ - Scott's Real Estate Investment Trust (TSX:
SRQ.UN) ("Scott's REIT"), Canada's leading owner of small-box retail
properties, announced today it has achieved a 25 per cent increase in its
asset portfolio since its initial public offering on October 6, 2005.
"We are encouraged by the growth we have achieved in just two short
years," said John Bitove, Chairman and CEO of Scott's REIT. "Looking forward,
we are pursuing additional growth and diversifying our property holdings to
reach our goal of doubling our asset base in our first three years while
maintaining stable monthly distributions to our Unitholders."
Scott's REIT completed its initial public offering on October 6, 2005 and
immediately acquired 190 quick service restaurant properties. The REIT's
current portfolio of 201 properties includes strong national leading brand
tenants in diverse industries such as banking, pharmacy, office supplies and
restaurants. The REIT maintains long-term leases, the majority of them
quadruple net leases, on all properties with a portfolio average length of
lease of nine years.
Scott's REIT announces new acquisition
Scott's REIT also announced today that it has entered into a purchase
agreement under its small-box retail acquisition program to acquire three
The agreement includes three brand new single-tenant retail properties
that are leased exclusively to Pharma Plus. Located in Windsor and Renfrew,
Ontario, the centres comprise a total of 36,400 sq. ft., and have a weighted
average lease term of 18.25 years. The total transaction is approximately
"This is our largest acquisition to date and further diversifies our
portfolio to include tenants in strong recession-resistant industries," said
Bitove. "Not only does this acquisition increase our asset base, but it also
demonstrates our commitment to executing on our growth strategy."
The acquisition is subject to customary conditions to closing, including
satisfactory due diligence and financing and is expected to be immediately
Scott's REIT amends management contract
Scott's REIT also announced amendments to its management contract with
JBM Properties Inc., including changes to fees related to development,
acquisitions, leasing and management of the property and asset base, as voted
on by the Board of Trustees.
The development fee will form part of the purchase price of any property
acquired by the REIT from JBM Properties. The acquisition fee, depending on
the purchase price of a property acquired by the REIT, would be between 0.5 to
1.0 per cent. The leasing fee would be from $0.75 per sq. ft. to $2.50 per
sq. ft. of premises leased depending on whether the lease is for a new tenant,
a renewal or an extension. These changes will be retroactive from September 1,
The Board of Trustees reviewed the current standards and best practices
in the industry and believes the change is required to remain competitive in
the marketplace. The contract amendments will allow Scott's REIT to advance
its growth strategy by increasing the pace of new acquisitions and will have
no impact on monthly distributions to Unitholders.
JBM Properties is the asset and property manager for Scott's REIT and is
controlled by John Bitove, Chairman and CEO of Scott's REIT.
The amended management contracts are available in Scott's REIT's filings
Scott's REIT also announced a cash distribution for the month of
October 2007 of $0.0708 per unit payable on November 15, 2007 to Unitholders
of record on October 31, 2007.
Scott's REIT also announced today a monthly cash distribution of
$0.0708 per unit to Unitholders of record of Class B Limited Partnership Units
in Scott's Real Estate LP on October 31, 2007. This distribution marks the
23rd consecutive cash distribution declared since Scott's REIT began
operations on October 6, 2005.
Scott's REIT's policy is to pay cash distributions on or about the 15th
of each month to Unitholders of record on the last business day of the
preceding month. Unitholders who are non-residents of Canada will be required
to pay all withholding taxes payable on any distributions by Scott's REIT.
About Scott's Real Estate Investment Trust
Scott's REIT (TSX: SRQ.UN) is Canada's premier small-box retail property
owner with 201 properties in seven provinces across Canada. Scott's REIT's
properties are well-located and geographically diverse. Nearly all properties
are long-term quadruple-net leases. The REIT has a 70.6 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 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, 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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