Business & Finance
Business and Finance
Business and Finance
Mon, June 13, 2011 HOMBURG CANADA REIT ANNOUNCES $17 MILLION IN OFFICE ACQUISITIONS
MONTREAL, June 13, 2011 /CNW Telbec/ - Homburg Canada Real Estate Investment Trust (TSX: HCR.UN) (the "REIT") today announced that it has entered into a binding agreement to acquire two properties in the province of Quebec: a two-storey office building in Longueuil and a four-storey office building in Levis. The gross purchase price of $17 million, excluding closing and transaction costs, represents a weighted average going-in capitalization rate of approximately 8%. The two transactions will add about 1.5%, or 113,259 square feet, of new assets to the REIT's portfolio. The transactions are expected to close by the end of June 2011 and are subject to standard closing conditions.
2405 Fernand-Lafontaine Boulevard, Longueuil, Quebec
The property at 2405 Fernand-Lafontaine Boulevard is a suburban office building in Longueuil, Quebec. The building will be acquired for a purchase price of $4.8 million, which will be satisfied through the assumption of a $2.4 million, 6.64% mortgage maturing in May 2017 and a cash payment of approximately $2.4 million.
Situated on 1.97 acres of land in Montreal's second-largest suburb, the property is a recently built "Class B+" office building with 32,881 square feet of gross leasable area and 122 parking stalls. It is located in the Vieux-Longueuil Industrial Park, across from the municipal golf course Le Parcours du Cerf, which is surrounded by recently built, high-end suburban homes. Easily accessible by highways 10, 15, 20, 116, 132 and 134, the property is 100% occupied by two quality tenants, GENIVAR and I.T.R. Acoustics. The average lease maturity for the total building is at 5.3 years.
6777 de la Rive-Sud Boulevard, Levis, Quebec
The property at 6777 de la Rive-Sud Boulevard is a suburban office building in Levis, Quebec. The building will be acquired for a purchase price of $12.2 million, which will be satisfied through the assumption of a $6.5 million, 6.3% mortgage maturing in September 2015 and a $1.5 million, 4.1% mortgage maturing in January 2012, as well as a cash payment of approximately $4.2 million.
Situated on 6.4 acres of land, the property is a recently built "Class A" office building with 80,378 square feet of gross leasable area and 461 parking stalls. It is located in Levis, a major urban centre and economic hub in the Quebec City region, in an area known as "La Cité Desjardins de Lévis," home to the head office of the Fédération des caisses Desjardins du Québec. The property is close to the Galeries Chagnon and the recently developed Misceo Levis City Centre, and enjoys easy access to highways 20, 73 and 132. It is entirely occupied by divisions of the Desjardins Group. The average lease maturity of the property is at 6.2 years.
"We are pleased with these acquisitions, which provide excellent return and further diversify the portfolio in the office segment. Both properties are located near existing assets and can therefore efficiently be absorbed into our operations," said Jim Beckerleg, President and Chief Executive Officer.
Forward-looking Statements
This news 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 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. 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 ].
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, consisting 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.
