Calloway Real Estate Investment Trust

Calloway Real Estate Investment Trust

December 08, 2010 18:49 ET

Calloway Real Estate Investment Trust Announces Valuation of Its Investment Properties

TORONTO, ONTARIO--(Marketwire - Dec. 8, 2010) -


Calloway Real Estate Investment Trust ("Calloway") (TSX:CWT.UN) announces the valuation of its investment properties for both its opening balance at January 1, 2010 and as at September 30, 2010 after transitioning to International Financial Reporting Standards ("IFRS"). IFRS becomes effective as at January 1, 2011 and Calloway's financial statements for the quarter ending March 31, 2011 will be reported under IFRS with comparable results commencing January 1, 2010.

Calloway has adopted the fair value model under IFRS, with the initial increase in fair value on the transition date recorded in unitholders' equity as at January 1, 2010 and subsequent changes are recorded in the income statement on a quarterly basis in future periods.

The impact of IFRS on Calloway's investment properties is as follows:

(in thousands of dollars)      
  Net Book Value1 IFRS Increase
January 1, 2010 $3,955,319 $4,214,609 $259,290
September 30, 2010 $4,099,597 $5,082,865 $983,268

For its opening IFRS balance sheet at January 1, 2010, Calloway had 50%2 of its portfolio appraised, in 2009, by an independent national real estate appraisal firm. Such appraisals utilized the industry's best practices and principles, along with factoring in all comparable market transactions at the time. For 2010, Calloway continued this process, having a representative 33%2 of its portfolio appraised externally. The remaining properties are valued internally, utilizing the assumptions inherent in the externally valued properties. Each year, properties are selected on a rotating basis for external valuation to ensure maximum coverage over a three-year period. 

Calloway, along with the independent appraisers, utilized the Direct Capitalization Income Approach method to value its investment properties. Individual properties were valued using capitalization rates applied to a stabilized net operating income ("NOI"), resulting in an overall weighted average capitalization rate of 7.6% as at January 1, 2010. During the year, the market experienced capitalization rate compression, which along with Calloway's strong mix of tenants, led to a September 30, 2010 weighted average capitalization rate of 6.7%, for the portfolio, with individual properties ranging from 5.9% to 7.7%.

About Calloway

Calloway Real Estate Investment Trust is an unincorporated open-end real estate investment trust focused on the ownership and development of high quality retail properties.

1 The net book value disclosed in the financial statements prepared in accordance with Canadian generally accepted accounting principles at December 31, 2009 and September 30, 2010 have been reduced for tenant inducements that will be presented separately from investment properties totaling $10,685 and $13,644 respectively.

2 Based on value.

The TSX 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 ext. 7649
    Calloway Real Estate Investment Trust
    Bart Munn
    Chief Financial Officer
    (905) 326-6400 ext. 7631