Calloway Real Estate Investment Trust
TSX : CWR.UN
TSX : CWT.DB

Calloway Real Estate Investment Trust

April 26, 2007 08:45 ET

Calloway Portfolio Hits 19 Million Square Feet

TORONTO, ONTARIO--(CCNMatthews – April 26, 2007) –

Attention Business/Financial Editors:

Calloway Real Estate Investment Trust (TSX:CWT.UN) announced today $270 million of accretive investments.

Approximately $120 million has been invested in the acquisition of four operating properties in Oakville, Mississauga and Vaughan, Ontario and in Newfoundland, comprising 688,000 square feet of leased area. A further $38 million was invested in expansions of 16 owned properties totaling 226,000 square feet and a $4 million loan was advanced for a 145,000 square foot centre to be constructed in British Columbia. Calloway has the right to purchase a 50% interest in this property on completion.

Additional acquisitions under contract comprise four properties for an aggregate purchase price of $108 million. These include lands for the development of 1.1 million square feet of new retail space in three greater Toronto area locations and a newly constructed centre comprising 200,000 square feet of fully rented space in British Columbia.

The investments described above immediately increased Calloway's portfolio of owned shopping centre space to 19.2 million square feet at the end of the quarter from 18.3 million square feet at the start of the year. They also increase Calloway's owned pipeline of future space and mezzanine options to 8.2 million square feet. This is 2 million square feet, or 8%, higher than previous estimates. It is also before including acquisitions still at the negotiation stage, such as the two previously announced centres in Oregon.

Mr. Simon Nyilassy, President and CEO of Calloway said, "We are putting our capital to work. We are investing for the present, acquiring three quality properties in the Greater Toronto Area and one in Newfoundland. The shopping centre under contract in British Columbia should close next month. We are also investing for the future, with the pending acquisitions of three parcels of land, all in the GTA. We do not need to raise any new money for these investments thanks to our strong balance sheet." He added, "our large pipeline of future developments and retail space that we have the option to acquire through our mezzanine loan program will grow our portfolio by over 40% as these developments are completed."

Calloway's 2007 investing activities to date may be summarized as follows (in millions of dollars):



Under
Closed Contract Total
-----------------------------

Expansions/Developments $38 $38
Acquisitions
Development Land - 64 64
Income Properties 120 44 164
Loans 4 4
-----------------------------
Total $162 $108 $270
-----------------------------


Details of Calloway's investing activities for the three months ended March 31, 2007 are set out below.

Expansions and New Developments

During the first quarter, the REIT completed 226,000 square feet of expansions and new developments within its existing portfolio, which included the completion of a 66,179 square foot expansion of the Wal-Mart Supercentre in Vaughan SmartCentre. The total investment in these activities was approximately $38.1 million, with an estimated yield of 7.9%. Pursuant to existing development agreements with SmartCentres, these investments were financed in part by the issuance of 308,696 Trust Units and LP Units totaling $5.7 million, and the balance in cash.

Closed Acquisitions

During the first quarter, Calloway acquired three (3) properties for $109 million. The acquired properties are located in the Greater Toronto Area and comprise 645,000 square feet of leased area. These acquisitions were financed by the assumption of debt ($23.5 million) and the balance in cash.

Since the end of the quarter, Calloway has closed on one property in Mount Pearl, Newfoundland for $10.5 million. The centre is fully occupied and comprises 43,000 square feet of leased space immediately adjacent to its Mount Pearl SmartCentre. The purchase price was satisfied by the assumption of debt ($5.3 million) and the balance in cash.

Management estimates that the initial annual yield of these acquisitions will be 6.2%.

Loans

During the first quarter, Calloway committed to a five-year, 7.25% mezzanine financing of $4.3 million to SmartCentres for the development of a 145,000 square foot retail shopping centre in British Columbia. The commitment provides Calloway with options to acquire 50% of the property. In April, Calloway provided an additional 7.5% mezzanine financing of $4 million for the development of a 37,000 square foot retail plaza in Ajax, Ontario. Calloway has been provided an option to acquire the completed plaza at a price that will be calculated based on achieved rents and the then-prevailing bond yields.

Under Contract

Calloway has contracted to purchase a 200,000 square foot centre in British Columbia for $44.4 million at an estimated first year yield of 6.75%.

Calloway has also contracted to purchase three parcels of land in the GTA for future development of approximately 1.1 million square feet of new retail space. One site completes the assembly of a 15-acre parcel of land adjacent to Calloway's Etobicoke Wal-Mart Centre, which will comprise 160,000 square feet upon completion. The remaining projects are in Stouffville (previously announced), and Halton Hills. A new Wal-Mart Supercentre recently opened on the Stouffville site. The initial investments will total approximately $64 million with a total aggregate investment of approximately $240 million, over the next three to seven years.

International

Calloway also confirmed that it is continuing the previously announced negotiations with regard to the acquisition of two properties in Oregon, which would be Calloway's first international investments.

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 Chief Executive Officer
    (905) 326-6400