PROREIT COMPLETES SALE OF THREE NON-CORE PROPERTIES AND REITERATES CAPITAL ALLOCATION STRATEGY
- Gross proceeds of $11.3 million from three completed dispositions
- As of September 28, 2023:
- Approx. 87% of 2023 GLA renewed at approximately 44% positive average spread
- Approx. 12% of 2024 GLA renewed at approximately 21% positive average spread
- $46 million available and undrawn on credit facility
MONTREAL, Sept. 29, 2023 /CNW/ - PRO Real Estate Investment Trust ("PROREIT" or the "REIT") (TSX: PRV.UN) today announced that it has completed the sale of two non-core office properties and one non-core retail property totalling approximately 63,000 square feet of gross leasable area ("GLA") for total gross proceeds of $11.3 million, excluding closing costs. Proceeds of the sale were used to repay approximately $7.2 million in related mortgages maturing in 2023, with the balance used for general business purposes.
"We are pleased to complete the sale of these three non-core properties, as we continue to focus on the high-quality industrial sector in Canada. Our portfolio continues to generate organic growth as evidenced by our successful GLA renewal and sustained high occupancy rate. Our capital allocation strategy remains on course, which includes paying regular distributions to unitholders and reducing our debt to gross book value. We also look forward to incremental cash flows resulting from our organic growth and GLA renewal," said Gordon G. Lawlor, President and Chief Executive Officer of PROREIT.
As of today's date, PROREIT's occupancy rate remains high at approximately 99%, including committed occupancy. About 87% of 2023 GLA has been renewed at approximately 44% positive average spread and about 12% of 2024 GLA has been renewed at approximately 21% positive average spread.
As previously announced, our 102,000 square foot industrial property located in St. Laurent, Quebec, which had a temporary vacancy in Q2 2023, will be fully occupied as of October 1, 2023 at an average positive spread of 55% under long-term leases with annual rent steps.
To date in 2023, including today's announcement, PROREIT has sold four non-core properties as follows:
Sector |
Address |
GLA |
Gross |
Use of Proceeds |
|
Mortgage |
General |
||||
Office |
26-32 Prince Arthur/11-15 |
49,481 |
$2.1M |
-- |
$2.1M |
Office |
9 Auriga Drive, Ottawa ON |
30,912 |
$9.1M |
$5.7M |
$3.4M |
Office |
31 Auriga Drive,Ottawa ON |
29,338 |
|||
Retail |
875 King Street, Sherbrooke, |
3,240 |
$2.2M |
$1.5M |
$0.7M |
TOTAL |
112,971 |
$13.4M |
$7.2M |
$6.2M |
|
Following these dispositions, PROREIT owns 126 investment properties (including a 50% ownership interest in 42 investment properties) representing approximately 6.4 million square feet of GLA, with the industrial segment accounting for 81% of GLA and 72% of base rent.
As of today's date, PROREIT has $46 million available on its credit facility. Mortgage maturity exposure is limited to approximately $25 million for the remainder of 2023 and approximately $26 million for 2024.
PROREIT (TSX: PRV.UN) is an unincorporated open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. Founded in 2013, PROREIT owns a portfolio of high-quality commercial real estate properties in Canada, with a strong industrial focus in robust secondary markets.
For more information on PROREIT, please visit the website at: https://proreit.com.
This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities legislation, including statements relating to certain expectations, projections, growth plans and other information related to REIT's business strategy and future plans. 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 and capital allocation strategy, the future financial and operating performance of PROREIT, and the REIT's intention to pay distributions to unitholders and reduce its debt to gross book value. 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 and six months ended June 30, 2023, which are available under PROREIT's profile on SEDAR+ at www.sedarplus.ca.
SOURCE PROREIT
Investor Relations: PRO Real Estate Investment Trust, Gordon G. Lawlor, CPA, President and Chief Executive Officer, 514-933-9552; PRO Real Estate Investment Trust: Alison Schafer, CPA, Chief Financial Officer and Secretary, 514-933-9552
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