Choice Properties Real Estate Investment Trust Completes Acquisition of Portfolio from Loblaw Companies Limited

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BRAMPTON, ON, Oct. 8, 2014 /CNW/ - Choice Properties Real Estate Investment Trust ("Choice Properties" or the "Trust") (TSX: CHP.UN) today completed the acquisition of a portfolio of 16 properties from certain subsidiaries of Loblaw Companies Limited (collectively, "Loblaw"), consisting of 15 retail properties and one warehouse. The aggregate purchase price for the portfolio was approximately $211.9 million, excluding transaction costs.

Highlights of Acquired Portfolio

• Expands portfolio by approximately 1.3 million square feet ("sq. ft.") of Gross Leasable Area ("GLA"), with an occupancy rate of 98.1%;
• Located across Canada and consists of 11 Loblaw bannered stand-alone supermarkets, four Loblaw-anchored retail sites with other ancillary tenants and one warehouse that is 100% leased to Loblaw;
• Offers potential for intensification, expansion and future redevelopment, including the potential to develop up to 280,000 sq. ft. of incremental GLA within five years, as well as three sites with medium to long-term mixed use redevelopment opportunities; and
• Immediately accretive with an estimated stabilized net operating income ("NOI") of approximately $13.6 million, representing an implied capitalization rate of 6.56%, excluding the immediately developable six acres of land acquired as part of the property in Guelph, Ontario valued at $4.0 million.

With the completion of this acquisition, Choice Properties' portfolio consists of 472 properties comprising 459 retail properties, 10 warehouse properties, one office complex, one industrial property and one parcel of land, totaling approximately 38.9 million sq. ft. across Canada.

The acquisition was funded through the issuance of 10,698,143 Class B LP Units of Choice Properties Limited Partnership, which have a value of $112.2 million, an assumption of a $3.4 million mortgage, and the balance in cash. With the completion of this transaction, Loblaw's and George Weston Limited's effective ownership interests in the Trust are 83.0% and 5.3%, respectively.

Portfolio Summary

The acquired portfolio comprises approximately 1.3 million sq. ft. of GLA across Canada with an average building age of 22 years, which is slightly older than the 16 year average age of the Trust's existing portfolio.  As principal tenant, Loblaw represents over 90% of total GLA and 95% of base rent of this portfolio, with initial lease terms of 15 or 20 years for the Loblaw leased space.

Property Summary

Address	Property Class	Banner	Year Built	Loblaw GLA	Ancillary GLA	% Occupied
61 Main St., Sackville, NB	Retail	Save Easy	1960	14,512	-	100%
180 Chemin du Tremblay, Boucherville, QC	Warehouse	Distribution Centre	2000	315,961	-	100%
55 Jacques-Cartier Sud, Sherbrooke, QC	Retail	Provigo	2013	43,000	-	100%
480, boul. Sainte-Anne, Ste-Anne-Des-Plaines, QC	Retail	Provigo	1998	27,516	-	100%
30 King St. South, Alliston, ON	Retail	Zehrs	2000	72,247	-	100%
124 Clair Rd. East, Guelph, ON	Retail	Zehrs	2014	39,956	-	100%
449 Carlaw Ave., Toronto, ON	Retail	no frills	1954	94,478	31,293	98%
2187 Bloor St. W, Toronto, ON	Retail	no frills	1990	13,972	1,806	100%
720 Broadview Ave., Toronto, ON	Retail	Loblaws	1970	20,192	12,971	100%
3193 Portage Ave., Winnipeg, MB	Retail	Real Canadian Superstore	1996	124,829	22,629	85%
2815 Wanuskewin Rd., Saskatoon, SK	Retail	Extra Foods	1997	48,754	-	100%
16 Superior St., Devon, AB	Retail	Extra Foods	1997	30,918	-	100%
7613-100th Ave., Peace River, AB	Retail	no frills	1994	58,225	-	100%
2855 Gladwin Rd., Abbotsford, BC	Retail	Real Canadian Superstore	1989	141,487	-	100%
250 Old Airport Rd., Yellowknife, NT	Retail	Extra Foods	1995	60,970	-	100%
2270-2nd Ave., Whitehorse, YT	Retail	Real Canadian Superstore	2003	90,211	-	100%
				1,197,228	68,699	98.1%

About Choice Properties Real Estate Investment Trust

Choice Properties Real Estate Investment Trust is an owner, manager and developer of well-located commercial real estate across Canada. Choice Properties' initial portfolio spans approximately 38.9 million square feet of gross leasable area and consists of 472 properties primarily focused on supermarket-anchored shopping centres, stand-alone supermarkets and other retail properties. Choice Properties' strategy is to create value by enhancing and optimizing its property portfolio, which was built over thirty years by Loblaw, the REIT's principal tenant, and largest Unitholder. Choice Properties' strong alliance with Loblaw positions it well for future growth. For more information, visit Choice Properties' website at www.choicereit.ca and Choice Properties' issuer profile at www.sedar.com.

Forward-Looking Statements
This press release may contain forward-looking information within the meaning of applicable securities legislation, which reflects Choice Properties' current expectations regarding future events. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Choice Properties' control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed in Section 12 "Enterprise Risks and Risk Management" in the MD&A section of Choice Properties' Second Quarter 2014 Report to Unitholders. Choice Properties does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

"NOI" is not a measure recognized under International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and does not have any standardized meaning prescribed by IFRS. NOI is a supplemental measure of an issuer's performance and management believes that NOI is useful in the assessment of the REIT's operating performance for valuation purposes, and is also a relevant measure of the ability of the REIT to earn and declare distributions to Unitholders. NOI, as computed by the REIT, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to NOI reported by such organizations. NOI should not be construed as an alternative to comprehensive income determined in accordance with IFRS as indicators of the REIT's performance. For additional information regarding this non-IFRS measure, including the definition thereof, please refer to the REIT's most recent management's discussion and analysis of results of operations and financial condition, a copy of which is available at www.sedar.com.

 

 

 

SOURCE: Choice Properties Real Estate Investment Trust

Kim Lee
Vice President, Investor Relations and
Financial Planning & Analysis
Choice Properties Real Estate Investment Trust
t [phone]
e [email protected]