TransGlobe Apartment REIT
TSX : TGA.UN

May 19, 2011 16:21 ET

TransGlobe Apartment REIT Announces $50 Million "Bought Deal" Equity Offering and Acquisition of Quebec City Buildings

TORONTO, ONTARIO--(Marketwire - May 19, 2011) -

NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S. NEWSWIRES

TransGlobe Apartment Real Estate Investment Trust (the "REIT") (TSX:TGA.UN) announced today that it has entered into an agreement to sell, on a bought deal basis, approximately $50 million of REIT units at a price of $11.55 per REIT unit to a syndicate of underwriters led by CIBC. The REIT has also granted the underwriters an over-allotment option to purchase up to an additional 649,500 REIT units at the same offering price, exercisable no later than 30 days after the closing of the offering.

The net proceeds from the offering of the REIT units will be utilized by the REIT to fund future property acquisitions, including the acquisition noted below, to repay debt and for general trust purposes.

Closing of the offering of REIT units is expected to occur on or about May 31, 2011, subject to TSX and other necessary regulatory approvals. The offering is being made under the REIT's existing short form base shelf prospectus dated May 11, 2011. The terms of the offering of the REIT units will be described in a prospectus supplement to be filed with Canadian securities regulators.

The REIT has also agreed to indirectly acquire a complex of seven buildings known as Samuel Holland, owned and operated by a third party in the City of Québec, Québec for an aggregate purchase price of approximately $98.6 million. Samuel Holland is comprised of five high-rise buildings, one mid-rise building and one low-rise building, totalling 819 residential suites and approximately 162,000 square feet of commercial space. The purchase price is expected to be satisfied by a combination of approximately $29.5 million of cash funded by the proceeds of the offering of REIT units, and approximately $69.1 million aggregate principal amount of mortgage debt on such buildings bearing an approximate interest rate of 4.1%. The mortgage debt matures in April 2013.

"We are very pleased to be extending our presence in the Province of Quebec and entering the Quebec City market with the purchase of this institutional quality, well maintained complex which has an excellent reputation in the marketplace," commented Kelly Hanczyk, the REIT's Chief Executive Officer. "Quebec City is among the strongest residential rental markets in the country, and we intend to further expand our presence in the region going forward."

About the REIT

TransGlobe Apartment REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT owns a portfolio of 92 residential rental properties containing approximately 12,000 suites principally located in urban centres in Alberta, Ontario, Québec, New Brunswick and Nova Scotia. TransGlobe Investment Management Ltd. and an affiliate administer and operate the assets of the REIT in order to support the REIT's external management structure.

Forward-looking Statements

Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking statements are provided for the purposes of assisting the reader in understanding the REIT's financial position, financial performance and cash flows as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information may relate to the REIT's future outlook and anticipated events or results and may include statements regarding the financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes, plans and objectives of or involving the REIT. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for the REIT or the real estate industry are forward-looking statements. In some cases, forward-looking information can be identified by such terms such as "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "seek", "aim", "estimate", "target", "project", "predict", "forecast", "potential", "continue", "likely", "schedule", or the negative thereof or other similar expressions concerning matters that are not historical facts.

Forward-looking statements necessarily involve known and unknown risks and uncertainties, that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, many of which, are beyond the REIT's control, affect the operations, performance and results of the REIT and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to, the risks discussed in the REIT's materials filed with Canadian securities regulatory authorities from time to time. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements as there can be no assurance that actual results will be consistent with such forward-looking statements.

Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances, including the following: the Canadian economy will remain stable over the next 12 months; inflation will remain relatively low; interest rates will remain stable; conditions within the real estate market, including competition for acquisitions, will be consistent with the current climate; the Canadian capital markets will provide the REIT with access to equity and/or debt at reasonable rates when required; TransGlobe Investment Management Ltd. and its affiliates will continue their involvement with the REIT; and the risks identified or referenced above, collectively, will not have a material impact on the REIT. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.

The forward-looking statements made in this press release relate only to events or information as of the date on which the statements are made in this press release. Except as specifically required by applicable Canadian law, the REIT undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

Contact Information

  • TransGlobe Apartment REIT
    Kelly Hanczyk
    Chief Executive Officer
    (416) 234-8444

    TransGlobe Apartment REIT
    Leslie Veiner
    Chief Financial Officer
    (416) 234-8444