Canadian Real Estate Investment Trust

Canadian Real Estate Investment Trust

December 30, 2009 09:37 ET

Canadian Real Estate Investment Trust Acquires a 50% Interest in Retail Properties Forming Part of South Edmonton Common Shopping Centre

TORONTO, ONTARIO--(Marketwire - Dec. 30, 2009) - Canadian Real Estate Investment Trust (CREIT) (TSX:REF.UN) today announced it has acquired a 50% undivided interest in certain retail properties forming part of South Edmonton Common Shopping Centre (SEC), in Edmonton, Alberta.

SEC is one of the largest and most successful unenclosed regional power centres in Canada and currently comprises approximately 2.1 million square feet of retail space.

Retailer-owned anchors of SEC include IKEA, Walmart, The Home Depot and Loblaw Real Canadian Superstore.

CREIT has acquired a 50% interest in several key components of SEC, including certain income producing property, property under re-development and retail development land. The specific property details are outlined below.

The income producing property acquired by CREIT is comprised of 60,000 square feet of leasable area which is fully developed and 100% leased. Tenants include Tim Hortons/Wendy's, Petro-Canada, The Keg Steakhouse & Bar, Moxie's Classic Grill and Starbucks. The weighted average remaining lease term is approximately eight years. Net operating income in-place on this component of the acquisition is $1.84 million (at 100%). Substantially all of the space is subject to contractual rental rate escalations during the respective lease terms.

The property under re-development acquired by CREIT is comprised of a 130,000 square foot building on 12 acres of land. The building was formerly occupied by Walmart, who relocated to an alternate site within SEC in order to accommodate a larger store format. A substantial retrofit of the original building is nearing completion. Approximately 90,000 square feet of the building has now been leased to tenants including Bed Bath & Beyond and Wholesale Sports. Furthermore, this portion of CREIT's acquisition can accommodate approximately 60,000 square feet of additional density which will be developed over time.

The retail development land acquired by CREIT comprises an additional 33 acres of land, including two key corner sites of SEC. The remaining two corner sites are retailer-owned by Walmart and Loblaw.

Stephen Johnson, President and Chief Executive Officer of CREIT, said "South Edmonton Common is an exceptional property that has evolved into one of Canada's most successful unenclosed shopping centres. This acquisition is a natural addition to CREIT's existing portfolio of high-quality real estate assets."

SEC was originally developed by Cameron Development Corporation (a privately-owned real estate development company based in Edmonton) and Grosvenor Canada Limited.

Mr. Johnson added, "We are pleased that we have been able to participate in another transaction with Cameron. Cameron will own a 50% undivided interest and will continue to be the development manager for the undeveloped retail lands we are acquiring as part of this transaction."

The purchase price of approximately $39.2 million (for CREIT's 50% interest) was settled by the assumption of a $5.7 million first mortgage, carrying an interest rate of 5.87% and a term to maturity of 8.2 years, with the balance funded from cash on hand.

Upon full development, the total leasable area of all the real estate acquired by CREIT will approximate 550,000 square feet (at 100%), and will represent a total investment of approximately $65 million (CREIT's share).

CREIT is a real estate investment trust that is dedicated to accumulating a portfolio of high-quality real estate assets, and delivering the benefits of real estate ownership to unitholders. The primary benefit is a reliable and, over time, increasing monthly cash distribution. CREIT owns a diversified portfolio of retail, industrial and office properties.

Contact Information

  • Canadian Real Estate Investment Trust
    Adam Paul
    Vice President, Investments