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Crombie Announces Zellers Lease Resolution and Property Acquisitions

^{Published on 2011-09-27 06:47:31 - Market Wire}
 

STELLARTON, NS, Sept. 27, 2011 /CNW/ - Crombie Real Estate Investment Trust ("Crombie") (TSX: CRR.UN) is pleased to confirm that it has reached conclusion with regard to the seven Zellers leases in its portfolio. Target announced on September 23, 2011 that it had selected four of Crombie's Zellers leases. 

Both 1180 Prospect St. E. Fredericton, New Brunswick (Uptown Centre) and Prince St., Sydney, Nova Scotia (Sydney Shopping Centre) are planned as future Target stores. The lease at 470 Topsail Road, St. John's, Newfoundland & Labrador (Zellers Plaza) is planned as a future Walmart store and the lease for 142 South Albion St., Amherst, Nova Scotia (Amherst Centre) is to be acquired by Crombie REIT.

The remaining three Zellers leases, in New Glasgow and New Minas, Nova Scotia and Summerside, Prince Edward Island, not included in the Target transaction, will continue to operate as Zellers stores pursuant to existing lease terms.

"We are very pleased to be working with Target Corporation to open two Target stores in our portfolio and adding an additional Walmart store." noted Crombie CEO Donald Clow. "We are also pleased to be acquiring the Zellers lease in Amherst, Nova Scotia as it facilitates the future repositioning of this centre. The addition of strong investment grade tenants like Target Corporation and Walmart Canada adds to Crombie's already strong and defensive cash flow."

Crombie also announces the acquisition of a Sobeys grocery anchored plaza in Shawinigan, Quebec on September 15, 2011 and the pending acquisitions of two free standing Sobeys stores in Bradford and Parry Sound, Ontario which are anticipated to close on or about September 28, 2011. These three properties, to be purchased from subsidiaries of Empire Company Limited for a total amount of $24.8 million, are 100% leased and comprise approximately 132,000 square feet of gross leasable area. The weighted average cap rate is 7.18%. Shawinigan was 70% financed with a 10 year fixed rate mortgage at 4.23% while Bradford and Parry Sound are anticipated to be mortgage financed early in the fourth quarter of 2011.

"We are pleased to add these properties to our portfolio as they support our strategy of pursuing high quality growth at a reasonable price" noted Clow. "These properties also support our objective of realizing greater growth in Quebec, Ontario and Western Canada."

About Crombie

Crombie is an open-ended real estate investment trust established under, and governed by, the laws of the Province of Ontario.  The trust invests in income-producing retail, office and mixed-use properties in Canada, with a future growth strategy focused primarily on the acquisition of retail properties. Crombie currently owns a portfolio of 134 commercial properties in eight provinces, comprising approximately 12.3 million square feet of rentable space.

This news release contains forward-looking statements that reflect the current expectations of management of Crombie about Crombie's future results, performance, achievements, prospects and opportunities. Wherever possible, words such as "may", "will", "estimate", "anticipate", "believe", "expect", "intend" and similar expressions have been used to identify these forward-looking statements.  Such statements include those relating to: the use of various properties under lease which may be impacted by tenants future financial condition or plans; the timing of the closing of pending acquisitions which are subject to closing conditions; and the completion of mortgage financing which may be impacted by market conditions. These statements reflect current beliefs and are based on information currently available to management of Crombie. Forward-looking statements necessarily involve known and unknown risks and uncertainties. A number of factors, including those discussed in the 2010 annual Management Discussion and Analysis under "Risk Management", could cause actual results, performance, achievements, prospects or opportunities to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and a reader should not place undue reliance on the forward-looking statements. There can be no assurance that the expectations of management of Crombie will prove to be correct.

Readers are cautioned that such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from these statements. Crombie can give no assurance that actual results will be consistent with these forward-looking statements. More information about Crombie can be found at [ www.crombiereit.com ].