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HOMBURG CANADA REIT CLOSES $116 MILLION TRANSACTION TO ACQUIRE AND MANAGE SCOTIA CENTRE IN CALGARY

^{Published on 2011-04-14 04:15:13 - Market Wire}
 

MONTREAL, April 14 /CNW Telbec/ - Homburg Canada Real Estate Investment Trust (TSX: HCR.UN) ("Homburg Canada REIT" or the "REIT") announced today that it has closed the previously announced transaction to acquire a 50-percent interest in the Scotia Centre, a 607,360 square foot office and retail complex in downtown Calgary, Alberta. Scotiabank maintained a 50-percent interest in the property, which will be managed by the REIT. The $116 million purchase price was funded by a 7-year, 4.60 percent, $69.6 million first mortgage financing provided by Scotiabank and the use of $46.4 million of cash-on-hand from the proceeds of the REIT's public offering completed in March, 2011.

"This is the first acquisition in the improving Calgary market since the closing of our IPO last May, and our largest and highest quality acquisition since then. Scotia Centre is a landmark property with excellent tenants in a market that we believe has substantial long-term upside. It provides us with a further high quality, central presence in one of Canada's fastest growing markets," said Jim Beckerleg, President and Chief Executive Officer of Homburg Canada REIT. "This transaction enables the REIT to substantially leverage our Calgary management platform and our current administrative costs. It fits our objective of investing in quality office and retail properties near our full service operating platforms," Mr. Beckerleg added.

Scotia Centre - At the Heart of Downtown Calgary

Prominently located in the heart of Calgary's financial and retail district, Scotia Centre is a 42-storey class "A" office tower with a 3-storey retail concourse. The complex contains 607,360 square feet of gross leasable area, including 519,233 square feet of office space, 88,127 square feet of retail space and 84 tenant parking stalls. It is located directly across the street from Calgary's C-Train, a light rapid transit system.

The five largest tenants of Scotia Centre include Scotiabank, Gowlings, Shaw Cable Systems, NuVista Energy and Chinook Energy, who together occupy 63.2 percent of the building.

The retail component of Scotia Centre represents 14.5 percent of the total leasable area of the complex, with 28 retail tenants. It connects directly to the Stephen Avenue pedestrian mall, which is lined with shops and restaurants, the CORE retail redevelopment and the Bay. The area attracts more than 250,000 people per week.  Scotia Centre houses the Calgary main branch of Scotiabank and from the building, shoppers and workers have easy access to Banker's Hall, and other buildings and shopping facilities in the area by way of Calgary's 18-kilometre long network of elevated walkways and bridges known locally as the "+15" - the largest of its kind in the world.

About Homburg Canada Real Estate Investment Trust

Homburg Canada Real Estate Investment Trust is an unincorporated open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Quebec. Managed internally, the REIT owns a portfolio of Canadian income-producing commercial properties, comprised mainly of retail and office properties with certain industrial properties, as well as certain income-producing multi-family residential properties. The properties comprise approximately 7.8 million square feet of commercial gross leasable area and 1,725 multi-family residential units located in Quebec, Atlantic Canada, Western Canada and Ontario.

Forward-looking Statements

This press release may contain forward-looking information within the meaning of applicable securities legislation. 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 the REIT's 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 under "Risk Factors" in the REIT's latest annual information form.

The REIT's objectives and forward-looking statements are based on certain assumptions, including that (i) the REIT will receive financing on favourable terms; (ii) the future level of indebtedness of the REIT 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 the REIT's financing capacity or operations; (iv) the impact of the current economic climate and the current global financial conditions on the REIT's operations, including its financing capacity, and asset value, will remain consistent with the REIT's current expectations; (v) the performance of the REIT's investments in Canada will proceed on a basis consistent with the REIT's current expectations; and (vi) capital markets will provide the REIT with readily available access to equity and/or debt.

The forward-looking statements contained in this press 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. The REIT, except as required by applicable securities legislation, does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise. Additional information about these assumptions and risks and uncertainties is contained in the REIT's filings with securities regulatory authorities, including its latest annual information form, which are available on SEDAR at [ www.sedar.com ].