Calloway Real Estate Investment Trust

Calloway Real Estate Investment Trust

April 06, 2006 16:38 ET

Calloway Announces Details on 2006 Expansion Program

TORONTO, ONTARIO--(CCNMatthews - April 6, 2006) - Calloway Real Estate Investment Trust (TSX:CWT.UN) (TSX:CWT.DB) announced today details on $525 million of its 2006 expansion program.

Calloway's acquisition and development activities in the first quarter of 2006 are expected to result in approximately $525 million in new investments by the end of the year.

These investments will include approximately 2.3 million square feet of newly acquired retail space in 15 properties in the major metropolitan areas of Toronto (4), Calgary, Edmonton, Ottawa/Hull and Montreal, as well as four other properties in Ontario and three in British Columbia.

In addition, Calloway will expand its existing portfolio of almost 100 centres by at least 880,000 square feet in 2006. The existing portfolio has approximately 4 million square feet of expansion potential in total already owned.

Finally, Calloway has completed new mezzanine loan arrangements giving it the option to acquire interests in two properties with a leaseable area on completion of almost 200,000 square feet.

Included above is the acquisition, or option to acquire six properties from First Pro with a gross leaseable area upon completion of approximately 550,000 square feet. The majority of Calloway's existing portfolio was previous acquisitions from First Pro Shopping Centers.

Mr. Simon Nyilassy, President and CEO of Calloway, said, "We continue to find interesting acquisition at accretive yields. Also, our relationship with FirstPro, Canada's largest developer of unenclosed, large scale shopping centers, together with Calloway's own internal development pipeline provide us with unique growth. We continue our commitment to delivering accretive growth and stable distributions to our unitholders."

Successful completion of the first quarter acquisition and development activities will ultimately result in a more than 20% increase to Calloway's existing portfolio.

Mr. Mitchell Goldhar, FirstPro's owner and Calloway's largest Unitholder, stated, "Aside from Calloway's own 4 million square feet of development, development activities within First Pro have exceeded previous expectations; Canadians recognize value offered by Wal-Mart and other First Pro tenants. Our annual average of 3 million square feet of newly built retail space, in Canada is expected to exceed 4 million square feet over the next few years".

Details of Calloway's investing activities and investment pipeline are set out below.

Acquisitions

In March 2006, Calloway completed the previously announced acquisition of a 100% interest in an 186,000 square foot shopping centers in Kitchener, Ontario for a purchase price of approximately $28 million paid for by assuming an existing mortgage of $14.3 million and the balance in cash. The property is anchored by Loblaws and Rona (operator owned) and includes Zellers as a major tenant.

Calloway also completed the acquisition of an 18 acre development property in north London, Ontario, adjacent to it's existing, 500,000 square foot Wal-Mart anchored centre, a 15 acre development property in Burlington, Ontario, adjacent to its existing 200,000 square foot Wal-Mart anchored center, and a 49.9% interest in a center contiguous to an existing Wal-Mart anchored Calloway center in Hull. The properties were acquired for an aggregate consideration of approximately $28 million, payable in cash.

Calloway also placed under conditional acquisition agreements an additional $283.5 million in eleven properties, comprising over 1.7 million square feet of retail space in British Columbia, Ontario, Quebec, Alberta and Newfoundland.

Mr. Nyilassy said "The eleven centers are well located with strong anchor tenants and excellent prospects in both the short and longer terms."

Development

During the first quarter, Calloway completed the development and expansion of approximately 380,000 square feet of additional space in its existing centers, including two new Wal-Mart's in Napanee and Welland, Ontario. A third Wal-Mart was completed on land adjacent to Calloway's property in Gander, Newfoundland.

Furthermore, over 500,000 square feet of additional space is pre-leased in Calloway's existing portfolio of almost 100 properties, which is expected to be built and open during 2006.

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.

The Toronto Stock Exchange neither approves nor disapproves of the contents of this Press Release.

Contact Information

  • Calloway Real Estate Investment Trust
    Simon Nyilassy
    President and CEO
    (905) 326-6400 ext. 7649

    or

    Calloway Real Estate Investment Trust
    Bart Munn
    CFO
    (905) 326-6400 ext. 7631