Retrocom Real Estate Investment Trust
TSX : RMM.UN

Retrocom Real Estate Investment Trust

June 17, 2015 06:30 ET

Retrocom Real Estate Investment Trust Announces New Distribution Policy and Name Change

TORONTO, ONTARIO--(Marketwired - June 17, 2015) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY NON-CANADIAN SOURCE

Retrocom Real Estate Investment Trust (the "REIT") (TSX:RMM.UN) announced today that it intends to reduce the REIT's annualized distribution from $0.45 per unit to $0.30 per unit. The new distribution would represent a Funds From Operations ("FFO") payout ratio of 70.8%, compared to 106.1% as reflected in the REIT's first quarter reporting, and would represent a yield of 8.3% based on the June 16, 2015 closing price of the REIT's units on the TSX. The REIT also announced that it will be changing its name to OneREIT in the coming months.

"The Board has decided to reduce the distribution to a level that is in line with the payout ratio of the Canadian REIT sector," said Richard Michaeloff, President and CEO of the REIT. "This reduction is not related whatsoever to the quality of the REIT's rental income, which is strong and reliable. This decision is related solely to our commitment to use funds in the most efficient and effective way. At this point, given our payout ratio, we believe it is in the Unitholders' best interest to deploy funds into our assets and to fund future growth."

Over the past five years, the REIT has undergone a major repositioning, growing from 23 properties with 4.3 million square feet to 59 properties with 7.5 million square feet. The REIT's asset base has increased from approximately $300 million to $1.2 billion, and its tenant profile has significantly improved in quality, with Walmart as the largest tenant. The Board believes the efforts and quality of this repositioning have not been reflected in the current unit price.

The REIT currently has $42 million in active development underway to further improve the quality of its portfolio. A $30 million redevelopment of its Golden Mile Shopping Centre in Regina has commenced, which will be anchored by a new 92,000 square foot Real Canadian Superstore. Over the past 5 years, the REIT has invested over $100 million in improving the quality of its asset base.

The REIT's proposed name change to OneREIT remains subject to regulatory approval, including approval by the TSX.

About Retrocom

Retrocom REIT is an unincorporated, open-end real estate investment trust which focuses on owning and acquiring retail properties across Canada with the goal of enhancing long-term Unitholder value.

Forward-Looking Information

This press release contains forward-looking statements, which reflect management's expectations regarding the REIT's future growth, results of operations, performance, and business prospects and opportunities. These statements relate to, but are not limited to, the REIT's expectations, intentions, plans and beliefs. In some cases, forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative or grammatical variations of these terms or other comparable terminology. Readers should be aware that these statements are subject to known and unknown risks, uncertainties and other factors, including, but not limited to: those discussed or referenced under the heading "Risk Factors" in the REIT's Management's Discussion and Analysis for the three months ended March 31, 2015, as well as competition within the commercial real estate sector, the effective international, national and regional economic conditions and the availability of capital to fund further investments in the REIT's business. Actual events or results may differ materially from those suggested by any forward-looking statements. Readers should not place undue reliance on any forward-looking statements contained in this press release. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Although management of the REIT believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Neither the REIT nor any other person assumes responsibility for the accuracy and completeness of any forward-looking statements, and no one has any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or such other factors which affect this information, except as required by law. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of a prospectus, nor shall there be any sale of the Units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The Units of the Retrocom REIT have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an exemption from the registration requirements of U.S. securities laws.

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