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

Calloway Real Estate Investment Trust

May 09, 2007 17:52 ET

Calloway Reports First Quarter Results

TORONTO, ONTARIO--(CCNMatthews – May 9, 2007) –

Attention Business/Financial Editors:

Calloway Real Estate Investment Trust (the "Trust") (TSX:CWT.UN) is pleased to report its results for the quarter ending March 31, 2007.

Highlights of the Quarter:

- Acquired 645,000 square feet of leased space for $112.4 million, providing an initial yield of 6.1%

- Expanded existing centres by an additional 226,000 square feet of leaseable area, at a cost to Calloway of $37.1 million, providing an unleveraged initial yield of 7.9%

- Committed to an additional $4.3 million in mezzanine financing, of which was fully funded

Mr. Simon Nyilassy, President and CEO said, "Our results reflect the strength and stability of our portfolio of 125 properties. Over the past 12 months, we have invested almost $1 billion in new acquisitions and developments of high-quality properties. The results of these activities are starting to show through and will contribute increasingly in subsequent quarters, as cash raised last year is fully invested and earning accretive returns."

As at March 31, 2007, Calloway's $3.4 billion real estate portfolio consist of 19.3 million square feet of gross leaseable area in 125 properties and 5.1 million square feet of future gross leaseable area.

During the quarter the Trust acquired three properties comprised of 645,000 square feet of leasable area in the greater Toronto area for $112.4 million and an unleveraged initial yield of 6.1%. Calloway expanded its existing portfolio by 226,000 square feet of leasable area through earnouts and developments at a cost of $37.1 million providing an unleveraged initial yield of 7.9%.

Calloway's debt to gross book value is a conservative 52% at quarter end. Based on a targeted debt to gross book value of 57.5%, Calloway could acquire an additional $555 million in assets by way of additional financing and available cash.

For quarter ended March 31, 2007, revenue totaled $97.0 million, a $10.6 million or 12% increase over the prior quarter. Rental revenues from income properties increased by $10.8 million or 13% in the quarter. Net operating income increased $5.7 million or 10.3% over the 4th quarter 2006. The increase is primarily due to acquisitions made in 2006, expansion activities on existing centres, and savings from the internalization of property management. The Trust portfolio continues to be well leased with vacant space of approximately 1%. Quarterly cash flow as measured by funds from operations "FFO" totaled $38.7 million, a 10.2% increase over previous quarter. "FFO" per unit (fully diluted) was $0.427 compared to $0.417 in the previous quarter, representing a 2.4% increase, due to rental income from acquired properties and expansions, short-term interest income from cash balances, offset by higher interest expense from the October debt offering, and the increased number of units outstanding. Management estimates that the dilution to FFO based on an average cash balance of approximately $187 million during the quarter is $0.01 per unit. The Trust's quarterly distribution of $0.375 per unit represents a payout ratio (to FFO) of 87.7% compared to 90.0% in the previous quarter.

Subsequent to quarter end, Calloway purchased an income property in Mount Pearl, Newfoundland and Labrador for $10.5 million, expanding its existing portfolio by 42,985 square feet and advanced $13.3 million in further mezzanine loans. The Trust has contracted to purchase 69 acres in two GTA locations for $39.9 million, as well as an operating property in Kamloops, BC consisting of 200,000 gross leasable square feet, for $44 million.

Full reports of the financial results are outlined in the unaudited financial statements and the management discussion and analysis, available on SEDAR. In addition, supplemental information is available on Calloway's website at www.callowayreit.com.

Calloway will hold a conference call on Thursday May 10th, 2007 at 9:00 a.m. eastern time. Participating on the call will be members of Calloway's senior management. Investors are invited to access the call by dialing 1-888-243-1119. You will be required to identify yourself and the organization on whose behalf you are participating. A recording of this call will be made available May 10, 2007 beginning at 11:00 a.m. (ET) through to 11:59 p.m. (ET) on May 17, 2007. To access the recording please call 1-800-558-5253 and use the reservation number 21337504.

The Trust's annual general meeting is scheduled for 2:00 p.m. on May 10th, 2007 at the Toronto Board of Trade located at One First Canadian Place, 77 Adelaide Street West, Toronto.

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 x 7649

    or

    Calloway Real Estate Investment Trust
    Bart Munn
    Chief Financial Officer
    (905) 326-6400 x 7631