Thursday, September 11, 2008
TORONTO, ONTARIO, Sep 08, 2008 (MARKET WIRE via COMTEX) -- Canadian Real Estate Investment Trust (CREIT) (CA:REF.UN: news, chart, profile) today announced it has acquired a portfolio of eight (8) retail properties from Canadian Tire (the Portfolio) for a total purchase price of $137,300,000.
Each of the eight (8) properties acquired by CREIT has been entirely leased by Canadian Tire for an initial term of 15 years at current market rental rates.
Canadian Tire has demonstrated a significant commitment to these retail locations by entering into 15-year triple net leases with escalating contractual rents over the term. Each property has been either newly constructed or significantly renovated/expanded within the past three years by Canadian Tire. The individual stores range from 54,000 to 130,000 square feet and comprise 740,000 square feet in total, on approximately 60 acres of land.
The eight properties CREIT is acquiring are located in
The properties all feature Canadian Tire's successful Concept 20/20 retail format. Three of the properties also include a free-standing Marks Work Wearhouse store on the respective site.
Stephen Johnson, President and Chief Executive Officer of CREIT, said "There are several reasons that make this a terrific transaction for CREIT. First, one of our fundamental strategic objectives over the years has been to accumulate a real estate portfolio that will deliver both reliable income, and consistent income growth, for our investors. Canadian Tire is an investment grade credit and has a market capitalization of almost $5 billion, so this transaction can be expected to deliver reliable rental revenue; and there will be consistent growth in the rental income as per the contractual terms of the 15-year lease.
Second, our focus has always been on the acquisition and/or development of high quality real estate assets. The Canadian Tire sites that CREIT acquired are integrated into well-established, existing shopping centres and/or retail nodes. In addition, each site is improved with a recently constructed or recently renovated/expanded Canadian Tire store. These properties are high-quality real estate assets and each property has great long-term potential as retail real estate. For example, one of the properties acquired is a Canadian Tire store integrated within the Dartmouth Crossing Shopping Centre in
And third, given the current uncertainty in both the economy and the credit markets, this transaction is a low-risk, sound investment, yet it will still comfortably satisfy our strategic objectives. This is a very efficient way for CREIT to deploy some of our current unutilized investment capacity.
Overall, we are delighted with this transaction and we expect it will have a very positive impact for our Unitholders."
Mr Johnson added "Canadian Tire is one of
Canadian Tire announced in August that it was selling 12 properties (eight of which CREIT has acquired) for a total purchase price of $174,000,000 (CREIT's total is $137,300,000).
The CREIT purchase price was satisfied at closing with proceeds from debt financings secured by the Portfolio, as well as other CREIT owned properties which were previously unencumbered.
CREIT is a real estate investment trust that is dedicated to accumulating a portfolio of high-quality real estate assets, and delivering the benefits of real estate ownership to unitholders. The primary benefit is a reliable, and over time, increasing monthly cash distribution. CREIT owns a real estate portfolio in excess of 150 retail, industrial and office properties.
Source: http://www.marketwatch.com/news/story/canadian-real-estate-investment-trust/story.aspx?guid={F7B6C76D-FE0E-4B6E-B5EE-FC73948B45F0}&dist=hppr
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