TORONTO, Oct. 16 /CNW/ - Calloway Real Estate Investment Trust
(TSX:CWT.UN) announced today that it completed over $500 million of
investments during the first nine months of 2006.
Mr. Simon Nyilassy, President and CEO of Calloway said, "Acquisitions,
expansions and developments have increased our operating portfolio by over
2.2 million square feet so far this year, as well as adding approximately
600,000 square feet in future development potential.
Investing in 'Calloway quality' assets is a hallmark of our growth
program. The addition of newly constructed premises housing successful
retailers such as Wal-Mart, Canadian Tire, Sobeys and Best Buy in major
markets which include Toronto (6 properties) and Montreal (2 properties),
further strengthens Calloway's position as the largest owner of unenclosed,
large format retail in Canada.
Our development pipeline is what sets us apart. It has never been
stronger, with current expansion capabilities of approximately 4 million
square feet, this pipeline alone provides Calloway with an equivalent of 16
new full-size shopping centres."
In aggregate, Calloway's 2006 investing activities to date may be
summarized as follows (in millions of dollars):
<<
9 Months
Ended
September 30, Under
Q3 2006 Contract(1) Total
--------------------------------------------------
Acquisitions 138 385 105(2) 490
Expansions/Developments 26 101 64 165
Loans (net) 25 41 0 41
Total 189 527 169 696
(1) new investments expected to close before the end of Q1 2007
(acquisitions/loans) or leases executed and rent to commence in 2006
(expansions/developments).
(2) includes $12.3 million acquisition that closed on October 5, 2006.
>>
Details of Calloway's investing activities for the nine months ended
September 30, 2006 are set out below.
Closed Acquisitions
During the third quarter, Calloway acquired interests in four (4)
properties for $138 million. The acquired properties are located in the
Greater Toronto Area (2), Southern Ontario and Montreal, and comprise of
580,000 square feet of leased area, 215,000 square feet of expansion potential
and 24,000 square feet of future development.
For the nine months ended September 30, 2006, investments in newly
acquired properties total $385 million in seventeen (17) properties, of which
fourteen (14) properties are income producing and three (3), are land
purchases. The income producing properties comprise approximately 1,700,000
square feet of existing leaseable area and 260,000 square feet of expansion
potential. The lands will comprise approximately 340,000 square feet of
leaseable area upon completion.
The fourteen shopping centres were acquired for a total of $361 million.
The income producing portion of the centres account for $340 million of the
acquisitions and generate $24.1 million annually in net revenues, providing a
7.1% yield. Five of these centres have 260,000 square feet of expansion
potential and account for the other $21 million of investment.
The acquisitions were financed with the issuance of 815,348 limited
partnership units, convertible into Trust units on a one-for-one basis, for
proceeds of approximately $19.3 million, the assumption of $111 million in
debt and the balance in cash.
Expansions and New Developments
During the third quarter, the REIT completed 120,000 square feet of
expansions and new developments within its existing portfolio. The total
investment in these activities was approximately $26.5 million.
For the nine months ending September 30, 2006, Calloway has completed
540,000 square feet of expansions and new developments, generating annual net
revenues of $8.4 million and an aggregate yield of 8.3%. Of this retail space,
the REIT developed 300,000 square feet and SmartCentres developed the balance.
The total investment was approximately $101 million and was in part financed
by the issuance of an aggregate of 1,234,156 REIT units and limited
partnership units for proceeds of $21 million.
Loans
During the quarter, Calloway committed to an eight year 7.25% mezzanine
financing of $28 million to SmartCentres and a partner on a Toronto property,
of which, $24.5 million was advanced. The commitment provides Calloway with
options to acquire the property on completion. The option price is based on a
spread over the ten (10) year Government of Canada bond at the time the option
is exercised. If Calloway acquires the property an additional 475,000 square
feet of leaseable area would be added to the portfolio. The borrower may defer
Calloway's option on 50% of the property for a period of up to 20 years.
For the year to date, financing commitments to SmartCentres total
$69.1 million for four (4) mezzanine loans on properties located in Ontario
(3) and Quebec. Advances of $40.9 million have been made under these
commitments with an estimated yield of 7.3%. Calloway has the right to acquire
interests in each of these centres with a total leaseable area of
approximately 690,000 square feet upon completion (Calloway's interest).
Under Contract/Negotiation
Calloway has under contract $105 million in acquisitions that are
expected to close prior to the end of Q1 2007. Included in these acquisitions
is a property located in Peterborough, which closed on October 5, 2006 for
$12.3 million. Another $64 million in new expansions and developments are
expected to be added to the portfolio by year-end.
The Toronto Stock Exchange neither approves nor disapproves of the
contents of this Press Release.
This press release contains "forward looking statements" subject to
various significant risks and uncertainties which may cause actual results,
performances and achievements of Calloway to be materially different from any
future results, performances or achievements, expressed or implied by such
forward looking statements. Such risk factors include, but are not limited to,
risks associated with real property ownership, availability of cash flow,
restrictions on redemption, general uninsured losses, future property
acquisition, environmental matters, tax related matters, debt financing,
Unitholder liability, potential conflicts of interest, potential dilution, and
reliance on key personnel. Calloway cannot assure investors that actual
results will be consistent with these forward looking statements and Calloway
assumes no obligation to update or revise them to reflect new events or
circumstances.
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