Canadian Apartment Properties Real Estate Investment Trust
TSX : CAR.UN

Canadian Apartment Properties Real Estate Investment Trust

November 21, 2014 13:30 ET

CAPREIT to Provide Property Acquisition Facilities to Support I-RES REIT's Portfolio Growth

TORONTO, ONTARIO--(Marketwired - Nov. 21, 2014) - Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX:CAR.UN) announced today that it has entered into an agreement (the "Pipeline Agreement") with Irish Residential Properties REIT plc ("I-RES") to make available up to EUR150 million for a period of up to one year to acquire high quality properties in Ireland, and to subsequently permit I-RES to acquire such properties from CAPREIT once I-RES has sourced additional funding.

In consideration for making the facility available under the Pipeline Agreement, and subject to I-RES shareholder approval, the initial term of the Investment Management Agreement dated April 11, 2014 between I-RES and I-RES Fund Management Limited, a wholly-owned subsidiary of CAPREIT, will be extended from 5 years to 7.5 years. The Pipeline Agreement will terminate upon the termination of the Investment Management Agreement, however, after deployment of the EUR150 million commitment, no further funds will be made available to, and no amounts may be re-drawn by, I-RES under the Pipeline Facility unless reauthorized by CAPREIT.

Both the Pipeline Agreement and the extension of the Investment Management Agreement remain subject to the approval of I-RES shareholders.

"We are very pleased to be supporting I-RES with their growth plans and to have received recognition of our strong management platform with the I-RES Board approval of the extension of the Investment Management Agreement," stated Thomas Schwartz, President and CEO. "The funds available under this innovative agreement will be used to acquire high quality properties in Ireland that meet both CAPREIT's and I-RES' investment criteria. Importantly, all properties acquired under this agreement will be accretive to CAPREIT from both a property cash flow while CAPREIT owns the assets and an ongoing fee basis once I-RES acquires the properties from CAPREIT and I-RES Fund Management Limited manages the properties for I-RES."

Under the Pipeline Agreement, CAPREIT will bid for and, if successful, acquire properties, approved by CAPREIT's Board of Trustees and I-RES' Independent Directors, through special purpose vehicles ("SPV"). Upon having sufficient financing, I-RES will acquire the SPVs at a price equal to the price paid for the relevant property investments held by that SPV (together with all third party costs incurred by CAPREIT) (the "Acquisition Cost") (net of indebtedness) provided that I-RES acquires the SPV within six months of the acquisition of the property, and thereafter at the greater of the Acquisition Cost and the fair market value of the assets of the SPV. If I-RES does not acquire the SPV within one year of the acquisition of the relevant property, CAPREIT would be permitted, but not obliged, to sell the property for its own benefit.

CAPREIT also announced today that it has been selected as the preferred bidder to acquire a portfolio of 270 residential suites and approximately 48,000 square feet of mixed-use commercial space located in Dublin, Ireland for approximately EUR88.9 million (including VAT, but excluding other acquisition costs). The portfolio includes an approximate 2.8 acre development site with planning permission for 467 apartments, 64,325 square feet of commercial space and associated basement car parking. The purchase will be funded through CAPREIT's Acquisition and Operating credit facility. This is the first property CAPREIT is acquiring under the Pipeline Agreement.

About CAPREIT

As one of Canada's largest residential landlords, CAPREIT is a growth-oriented investment trust owning interests in 41,555 residential units, comprising 35,373 residential suites and 29 manufactured home communities comprising 6,182 land lease sites located in and near major urban centres across Canada. For more information about CAPREIT, its business and its investment highlights, please refer to our website at www.capreit.net and our public disclosure, which can be found under our profile at www.sedar.com.

About I-RES REIT

Irish Residential Properties REIT plc is an Irish Real Estate Investment Trust ("REIT") listed on the Irish Stock Exchange. The Company is the first REIT established in Ireland primarily focused on the multi-unit residential rental sector. The REIT will continue to seek to acquire, hold and manage investments primarily in multi-unit rental residential real estate and/or ancillary and strategically situated commercial property in Ireland. I-RES raised EUR200 million in an initial public offering in April 2014 and currently owns 1,204 residential suites, approximately 7,728 sq. m. (83,225 sq. ft.) of commercial space and ancillary development land at 10 locations in the greater Dublin area.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

All statements in this press release that do not relate to historical facts constitute forward-looking statements. These statements represent CAPREIT's intentions, plans, expectations and beliefs and are subject to certain risks and uncertainties that could result in actual results differing materially from these forward-looking statements. These risks and uncertainties are more fully described in regulatory filings that can be obtained on SEDAR at www.sedar.com.

Contact Information

  • CAPREIT
    Mr. Michael Stein
    Chairman
    (416) 861-5788

    CAPREIT
    Mr. Thomas Schwartz
    President & CEO
    (416) 861-9404

    CAPREIT
    Mr. Scott Cryer
    Chief Financial Officer
    (416) 861-5771