Huntingdon Real Estate Investment Trust Announces First Quarter 2010 Results

RICHMOND, BC, May 28 /CNW/ - Huntingdon Real Estate Investment Trust (the "Trust" or "HREIT") (TSX: HNT.UN) today announced first quarter 2010 results.

Consolidated Financial Results for the First Quarter 2010 - Loss per unit from continuing operations narrows

For the first quarter of 2010, HREIT reported consolidated income from continuing operations of $0.22 per unit including a one-time bargain purchase gain on the acquisition of IAT Air Cargo Facilities Income Fund ("IAT"). Normalized for the one time bargain purchase gain of $5.3 million and approximately $0.4 million of one-time management internalization costs, the Trust reported a loss from continuing operations of $0.09 per unit, as compared to a consolidated loss of $0.32 per unit for the first quarter of 2009 (prior period per unit results were adjusted for the February 12, 2010 unit consolidation). The loss from continuing operations for 2010 decreased from the prior year due to (i) the positive net income from the addition of 18 properties resulting from the business combination with IAT which took effect on January 1, 2010, and (ii) the repayment of higher rate debt year over year.

During the quarter HREIT sold one rental property totaling 25,745 square feet of leasable area and one parking lot for gross proceeds of $6.2 million and net proceeds of approximately $2.2 million after transaction costs and repayment of related mortgage debt resulting in a gain of $1.3 million.

Operating Results

The HREIT portfolio was approximately 84% leased as of March 31, 2010, up 100 basis points since December 31, 2009 and down 900 basis points from March 31, 2009. The increase over December is due to the higher average occupancy of the IAT portfolio, while the decrease year over year was primarily due to an increase in vacancy at various Ontario retail and industrial properties in December 2009. In particular, the vacancy from International Trucking of 650 Riverview, Chatham, Ontario for approximately 219,000 sf represented about 480 basis points of the decline in occupancy on a same property basis.

For the first quarter 2010, total rental revenues from continuing operations were $18.5 million, up 30.4% from $14.2 million for the same quarter in 2009. The increase is due to the additional revenues from the IAT portfolio effective January 1, 2010. Normalizing for this, revenues from continuing operations decreased by 4.2% due to a decline in occupancy.

Huntingdon's President and CEO, Zachary George, commented, "Our merger integration work is progressing well, and should be substantially complete by the end of the second quarter. Management is focused on the continued lease-up of vacant space and the rationalization of the portfolio through the sale of non-core assets. HREIT currently has $22 million in cash on hand, enabling us to make capital investments, retire the Series B debentures, and repurchase both units and Series C debentures. As an owner and manager, I would like to thank the HREIT team for their dedication and professionalism through the internalization process."

Supplemental Earnings Measures

For the first quarter of 2010, funds from operations ("FFO") was $2.6 million, or $0.17 per unit compared to FFO of $0.7 million, or $0.08 per unit for the first quarter of 2009. The increase in FFO is a result of the positive net cash flow from the addition of the IAT portfolio. Normalizing for IAT as well as approximately $0.4 million in one-time management internalization costs, FFO on a same property basis increased by $0.02 per unit to $0.10 per unit due to approximately $0.9 million in lower financing expense offset by approximately $0.4 million in lower revenue net of operating costs due to the decline in occupancy.

FFO is not recognized as an appropriate earning measure under Canadian generally accepted accounting principles ("GAAP"), and is not construed as an alternative to earnings determined in accordance with GAAP, but is considered a useful supplemental indicator of HREIT's performance. Detailed definition of FFO and explanations as to why management believes it is a useful performance measure are provided in the 2009 annual report filed by the HREIT on SEDAR at www.sedar.com.

HREIT is a real estate investment trust which is listed on the Toronto Stock Exchange under the symbols HNT.UN (Trust Units) and HNT.DB.C (Series C Convertible Debentures). HREIT owns, directly or indirectly, 82 income producing office, industrial, retail and standalone parking lot properties, including the aviation-related facilities at five of Canada's leading international airports that have a total gross leasable area of 5.5 million square feet; and two land parcels held for development, with other development and expansion opportunities within the portfolio.

Forward-Looking Information:

Certain statements contained in this news release may constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "plan", "expect", "may", "will", "intend", "should", and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Forward-looking statements in this press release include, but are not limited to, HREIT's expectation with respect to applying to the applicable securities regulatory authorities for a management cease trade order, the expected time for filing of the Required Documents and the imposition of a cease trade order by applicable securities regulatory authorities. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. The forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results or events to differ materially from current expectations including, but not limited to, the risks detailed from time to time in HREIT's filings with Canadian provincial securities regulators. HREIT cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and HREIT does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change, except as required by applicable law.

The Toronto Stock Exchange has not reviewed or approved the contents of this press release and does not accept responsibility for the adequacy or accuracy of this press release.

For further information: Zachary R. George, Trustee, President and Chief Executive Officer, Tel: [phone], Fax: [phone], Email: [email protected]