- Binding agreement for 5 institutional-quality industrial assets
comprising 430,000 square feet of GLA in major cities in
Atlantic Canada for $42.5 million
- Completion of previously announced acquisition of a 38,000
square foot small bay industrial building in Winnipeg, Manitoba for $5.2 million
- Completion of acquisition of an 82,000 square feet light
industrial building for redevelopment in Moncton, New Brunswick for $4.5 million
- Total portfolio comprised of 107 properties and $750 million of gross book value1,
with exposure to industrial segment at 73% of GLA and 57% of base
rent on pro forma basis
/NOT FOR DISSEMINATION IN THE
UNITED STATES OR DISTRIBUTION THROUGH UNITED
STATES NEWS OR WIRE SERVICES./
MONTRÉAL, June 3, 2021 /CNW
Telbec/ - PRO Real Estate Investment Trust (TSX:PRV.UN) ("PROREIT"
or the "REIT") today announced that it has entered into a binding
purchase agreement for a 100% interest in five single-tenant light
industrial buildings in Atlantic
Canada totaling 430,000 square feet of gross leasable area
("GLA") for an aggregate purchase price of $42.5 million before closing costs and
representing a going in capitalization rate of approximately 6.3%
($99 per square foot) (the "Atlantic
Canada Properties").
In addition, PROREIT has announced the completion of its
previously announced acquisition of a small bay industrial building
in Winnipeg, Manitoba, comprising
38,000 square feet of GLA for a purchase price of $5.2 million before closing costs and
representing a going in capitalization rate of approximately 6.3%
($138 per square foot).
PROREIT also announced the completion of a $4.5 million ($55
per square foot) acquisition of an institutional quality 82,000
square feet light industrial building in Moncton, New Brunswick for redevelopment.
"With these accretive transactions, we are gaining growth
momentum as the economy reopens. We are gearing up for an active
year and further strengthen our portfolio with high-quality
acquisitions in the robust industrial sector," said James W. Beckerleg, President and Chief
Executive Officer of PROREIT.
______________________
|
1
|
See "Non-IFRS and
Operational Key Performance Indicators". Represents gross book
value, GLA and base rent at March 31, 2021, pro forma the sale of a
$4.9 million property completed on April 28, 2021 and the
acquisition of 18 properties for $133.7 million (excluding closing
costs), of which 5 properties have been acquired subsequent to
March 31, 2021 for $58.9 million and 13 properties (the Atlantic
Canada Properties and the Remaining Winnipeg Properties, as defined
herein) are subject to purchase agreements for $74.8
million.
|
"We have now completed one of the nine previously announced
Winnipeg acquisitions. The
remaining purchases are scheduled to close by early in the third
quarter. We are pleased with the potential of our Moncton redevelopment opportunity, as we
increase our footprint in this growing logistics center of
Atlantic Canada. The value of this
property has the potential to increase substantially with
minimal incremental capital investment required," concluded Mr.
Beckerleg.
Atlantic Canada Single-tenant Industrial
Portfolio
The institutionally owned and managed warehouse and
distribution facilities are located in four of Atlantic Canada's major cities and represent
430,000 square feet of GLA, featuring clear heights of 25-30
feet. The properties, four of which are temperature
controlled, are 100% leased to two credit quality tenants with a
weighted average lease term of approximately six years. Four of the
five leases include contracted rent steps.
Property
Address
|
GLA (Square
Feet)
|
1 Duck Pond Road,
Halifax, NS
|
105,975
|
550 McAllister Drive,
Saint John, NB
|
104,094
|
10 Old Placentia
Road, S. John's, NF
|
80,730
|
460 MacNaughton
Avenue, Moncton, NB
|
76,303
|
611 Ferdinand
Boulevard, Moncton, NB
|
63,053
|
|
430,155
|
The $42.5 million purchase price
will be substantially financed from the proceeds of a new
$29.0 million 5-year first
mortgage. The balance of the purchase price will be satisfied with
cash on hand and operating facilities of $13.5 million available as a result of the recent
$50.0 million private placement of
equity. Closing is expected in the next few weeks and is
subject to customary conditions.
Winnipeg Acquisition
PROREIT completed one of its nine Winnipeg acquisitions announced on
March 15, 2021. The property, located
at 61-85 Muir Road in Winnipeg,
Manitoba, is in proximity to PROREIT's current Winnipeg portfolio in the Inkster Industrial
Park and is a small bay industrial building with clear height of 16
feet and approximately 38,000 square feet of GLA. The property is
100% leased to four tenants with a weighted average lease term of
approximately 5 years.
The $5.2 million purchase price
was satisfied with cash on hand as a result of the recent
$50.0 million private placement of
equity.
Moncton Acquisition
PROREIT acquired a vacant 82,000 square foot light industrial
building in Moncton, New Brunswick
for $4.5 million (excluding closing
costs). The building, which was historically owner-occupied,
features clear heights of between 26 and 30 feet and is well
located in the Moncton Industrial Park close to many of PROREIT's
other industrial properties. The redevelopment plan includes
reconfiguring the building's shipping and docking capacities to
permit a multi-tenant internal layout and improving truck and
trailer turning and parking accesses.
At an attractive $55 per square
foot, the $4.5 million purchase price
was substantially financed from the proceeds of a new floating rate
$3.4 million two-year redevelopment
loan. The balance of the purchase price was satisfied with cash on
hand available as a result of the recent $50.0 million private placement of
equity.
Impact of the Acquisitions on PROREIT's Overall
Portfolio
Upon completion of these and previously announced acquisitions,
PROREIT's portfolio will be comprised of 107 income producing
commercial properties representing approximately 5.5 million square
feet of GLA and in excess of $750
million of Gross Book Value.1 The addition of the
industrial properties will further improve portfolio
diversification by increasing exposure to the industrial sector to
73% by GLA and 57% by base rent.1
The remaining eight previously announced Winnipeg small bay industrial
properties, totaling approximately 250,000 square
feet, are subject to customary closing conditions, including
due diligence provisions, with closing expected by early in the
third quarter of 2021 (the "Remaining Winnipeg Properties").
Pro Forma Portfolio2
|
|
|
|
|
|
|
|
|
|
|
Province
|
|
Based Rent
%
|
|
GLA
%
|
|
Asset
Class
|
|
Base Rent
%
|
|
GLA
%
|
Maritime
Provinces
|
|
41%
|
|
43%
|
|
Industrial
|
|
57%
|
|
73%
|
Quebec
|
|
12%
|
|
14%
|
|
Retail
|
|
30%
|
|
19%
|
Western
Canada
|
|
17%
|
|
14%
|
|
Officer
|
|
13%
|
|
8%
|
Ontario
|
|
30%
|
|
29%
|
|
|
|
|
|
|
Total
|
|
100%
|
|
100%
|
|
|
|
100%
|
|
100%
|
About PRO Real Estate Investment Trust
PROREIT is an unincorporated open-ended real estate investment
trust established pursuant to a declaration of trust under the laws
of the Province of Ontario.
PROREIT was established in March 2013
to own a portfolio of diversified commercial real estate properties
in Canada, with a focus on primary
and secondary markets in Québec, Atlantic
Canada and Ontario with
selective expansion into Western
Canada. PROREIT's portfolio is diversified by property type
and geography.
For more information on PROREIT, please visit the website
at: https://proreit.com.
Non-IFRS and Operational Key Performance Indicators
PROREIT's consolidated financial statements are prepared in
accordance with International Financial Reporting Standards
("IFRS"). In this press release, as a complement to results
provided in accordance with IFRS, PROREIT discloses and discusses
certain non-IFRS financial measures, including Gross Book Value.
These non-IFRS measures are not defined by IFRS, do not have a
standardized meaning and may not be comparable with similar
measures presented by other issuers. PROREIT has presented such
non-IFRS measures as management of the REIT believes they are
relevant measures of PROREIT's underlying operating performance and
debt management. Non-IFRS measures should not be considered as
alternatives to net income, cash generated from (utilized in)
operating activities or comparable metrics determined in accordance
with IFRS as indicators of PROREIT's performance, liquidity, cash
flow, and profitability. For a full description of these measures
and, where applicable, a reconciliation to the most directly
comparable measure calculated in accordance with IFRS, please refer
to the "Non-IFRS and Operational Key Performance Indicators"
section in PROREIT's management's discussion and analysis for the
three month period ended March 31,
2021, available under PROREIT's profile on SEDAR at
www.sedar.com.
_____________________
|
1
|
See "Non-IFRS and
Operational Key Performance Indicators". Represents gross book
value, GLA and base rent at March 31, 2021, pro forma the sale of a
$4.9 million property completed on April 28, 2021 and the
acquisition of 18 properties for $133.7 million (excluding closing
costs), of which 5 properties have been acquired subsequent to
March 31, 2021 for $58.9 million and 13 properties (the Atlantic
Canada Properties and the Remaining Winnipeg Properties) are
subject to purchase agreements for $74.8 million.
|
2
|
Represents portfolio
of 90 properties at March 31, 2021, pro forma the sale of one
property completed on April 28, 2021 and the acquisition of 18
properties, of which 5 have been completed subsequent to March 31,
2021 and 13 are subject to purchase agreements (the Atlantic Canada
Properties and the Remaining Winnipeg Properties).
|
Forward-Looking Information
This news release contains forward-looking statements within the
meaning of applicable securities legislation. Forward-looking
statements are based on a number of assumptions and are subject to
a number of risks and uncertainties, many of which are beyond
PROREIT's control, that could cause actual results and events to
differ materially from those that are disclosed in or implied by
such forward-looking statements.
Forward-looking statements contained in this press release
include, without limitation, statements pertaining to the execution
by PROREIT of its growth strategy, the anticipated closing of the
remaining announced acquisitions and the anticipated terms and
financing of these acquisitions, and the future performance of
PROREIT. PROREIT's objectives and forward-looking statements are
based on certain assumptions, including that (i) PROREIT will
receive financing on favourable terms; (ii) the future level of
indebtedness of PROREIT and its future growth potential will remain
consistent with the REIT's current expectations; (iii) there will
be no changes to tax laws adversely affecting PROREIT's financing
capacity or operations; (iv) the impact of the current economic
climate and the current global financial conditions on PROREIT's
operations, including its financing capacity and asset value, will
remain consistent with PROREIT's current expectations; (v) the
performance of PROREIT's investments in Canada will proceed on a basis consistent with
PROREIT's current expectations; and (vi) capital markets will
provide PROREIT with readily available access to equity and/or
debt.
The forward-looking statements contained in this news release
are expressly qualified in their entirety by this cautionary
statement. All forward-looking statements in this press release are
made as of the date of this press release. PROREIT does not
undertake to update any such forward-looking information whether as
a result of new information, future events or otherwise, except as
required by law.
Additional information about these assumptions and risks and
uncertainties is contained under "Risk Factors" in PROREIT's latest
annual information form and "Risk and Uncertainties" in PROREIT's
management's discussion and analysis for the three month period
ended March 31, 2021, which are
available under PROREIT's profile on SEDAR at www.sedar.com.
Neither the TSX nor its Regulation Services Provider (as that
term is defined in the policies of the TSX) accepts responsibility
for the adequacy or accuracy of this release.
SOURCE PROREIT