MONTREAL, Dec. 20, 2018 /CNW/ - PRO Real Estate Investment
Trust ("PROREIT" or the "REIT") (TSXV: PRV.UN) is pleased to report
that it has closed the previously announced acquisition of two
light industrial properties in Southwestern Ontario for a total of
$15.38 million.
The two industrial properties are strategically located just
west of Cambridge, and in
Hamilton, both within Ontario's Golden Horseshoe area. They are each
on major transportation corridors. The buildings, which were
acquired from a single vendor, contain total gross leasable area
(or "GLA") of approximately 202,000 square feet and are fully
leased to high quality tenants with weighted average lease terms of
7.1 years.
The $15.4 million purchase price
was financed by the assumption of $8.4
million in existing mortgages at a weighted average interest
rate of 3.15%. The balance of the purchase price was satisfied with
cash on hand and from existing lines of credit.
The addition of the properties to the REIT's portfolio increases
PROREIT's industrial exposure to 27.1% compared to 24.9%
previously. The acquisitions also increase the REIT's exposure to
the Ontario market, which climbs
from 16.4% of the portfolio to 19.6%.
1035 Industrial Road, Ayr,
Ontario
Built in 1990, 1035 Industrial Road is located in Ayr, west of Cambridge, Ontario on the TransCanada Highway
401, providing direct access to major markets in Ontario as well as to the States of
New York and Michigan in the
United States.
The property is a single tenant industrial building that sits on
an eight-acre site and with 156,318 square feet of GLA. With
23-foot clear height, the property provides 21 loading docks.
63 Innovation Drive, Waterdown,
Ontario
The Innovation Drive property is a high-quality single tenant
industrial building built in 2001, with total GLA of 45,879 square
feet and a clear height of 24 feet. The building sits on a
2.78-acre site.
63 Innovation Drive is situated in close proximity to Highway 6
and Highway 403, both of which provide easy access to regional
markets including Toronto and
Hamilton and other markets in
Southern Ontario, as well as to
New York State in the United States.
2018: A Transformative Year
"The Trustees and Management of PROREIT would like to extend
Seasons Greetings to unitholders and stakeholders in our REIT,"
said James W. Beckerleg, President
and Chief Executive Officer. "We are extremely proud of our
accomplishments in 2018, which we believe was our best year to
date.
"In just over five years, PROREIT will have grown to over
$500 million in assets comprised of
84 properties in a diversified commercial real estate
portfolio. We made significant progress on all fronts in
2018. We increased our geographical diversification with our
entry into two important Canadian cities, Winnipeg and Ottawa, and we increased our industrial
exposure with important acquisitions in Winnipeg, Southwestern Ontario and Greater
Montreal.
"Our portfolio has never been stronger. With occupancy
rates above 98% and having renewed 97% of leases coming due in
2018, PROREIT has strengthened its portfolio of quality properties
and tenants that provide consistent and predictable cash flows to
the REIT. Discussions are well underway on renewal of leases
maturing in 2019.
"In 2018, we completed two equity financings totalling
$69.1 million, and have now fully
deployed these funds.
"During the year, we took important strides toward
internalization of asset and property management. First, we
acquired and integrated the assets of Compass Commercial Realty
Inc. and internalized the property management on a large portion of
our properties. At the end of the year, we will have crossed
the asset threshold that permits us to internalize asset
management, a strategically important initiative that should lead
to greater value for unitholders.
"We are very proud of our success in 2018 and indeed, since we
founded PROREIT in 2013.
We look forward to 2019 with enthusiasm from a stronger
base. From an operations perspective, we expect to complete
internalization of asset management in the first few months of the
year. From a financial perspective, our payout ratios are
expected to decline, and largely as the result of contracted rent
increases and vacancy reductions, we expect to be recording per
unit growth in net comprehensive income, net operating
income1 and adjusted funds from operations1.
On the other side of the balance sheet only a limited amount of our
long-term debt is coming due in 2019.
"Thank you to everyone who has contributed to our success at
PROREIT," concluded Mr. Beckerleg.
PROREIT has also initiated the process of graduating to the
Toronto Stock Exchange (the "TSX"). The graduation of the
REIT to the TSX will be subject to the approval of the TSX in
accordance with its original listing requirements. The TSX
has not conditionally approved the graduation of the REIT to the
TSX, and there is no assurance that the TSX will approve such
graduation.
About PROREIT
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 across Canada.
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, PROREIT discloses and
discusses certain non-IFRS financial measures, including adjusted
funds from operations and net operating income. 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 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 nine months ended
September 30, 2018, available on
SEDAR at www.sedar.com.
Forward-Looking Statements
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 is 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 impact of
the acquisition on the REIT's results and financial performance,
the status of the REIT's application to graduate to the TSX, the
intention of the REIT to complete the internalization of its asset
management function and the timing thereof, and the future
financial performance of the REIT. 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 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, which is available on SEDAR at
www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
___________________________
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1 Non-IFRS
measure. See "Non-IFRS and Operational Key Performance
Indicators".
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SOURCE PROREIT