Whiterock Real Estate Investment Trust

Whiterock Real Estate Investment Trust

September 09, 2011 07:00 ET

Whiterock REIT Completes Accretive Grocery Anchored Shopping Centre Acquisition in Ontario, Capping $334 Million of Accretive Acquisitions in the Summer of 2011

TORONTO, ONTARIO--(Marketwire - Sept. 9, 2011) - Whiterock Real Estate Investment Trust ("Whiterock") (TSX:WRK.UN) announced that it completed the purchase of a Sobeys long-term leased shopping centre in Tillsonburg, Ontario for approximately $7.5 million (before closing costs). Management expects the acquisition to be accretive to annualized on-going adjusted funds from operations ("AFFO") per unit. The first full quarter impact of this increase to AFFO per unit is expected to be realized commencing in the fourth quarter of 2011.

"The acquisition of this Sobeys long-term leased shopping centre is consistent with our goal of acquiring high-quality, stable, and secure long-term rental cash flows," said Jason Underwood, Chief Executive Officer. "This acquisition caps a successful summer for Whiterock, in which we completed $334 million (before closing costs) of accretive acquisitions. We continue to successfully execute on our disciplined and accretive growth strategy, building long-term value for our unitholders."

The asset was purchased in co-ownership with ROI Capital Ltd., with Whiterock providing exclusive property management services. The capitalization rate on the asset is approximately 7.7% and the interest rate on the first mortgage assumed is approximately 5.3%.

Tillsonburg Gateway Shopping Centre – Tillsonburg, Ontario

Tillsonburg Gateway Shopping Centre is a Sobeys anchored shopping centre consisting of 47,016 square feet of rentable area located in Tillsonburg, Ontario, approximately 50 kilometres southeast of London. Situated on 8.7 acres, the property includes a new format, single-storey 40,566 square foot freestanding Sobeys grocery store, a 10-pump Pioneer gasoline service station, and a two-tenant strip plaza. The property is 100% leased, with an average remaining lease term of approximately 11 years. Approximately 86% of the property's rentable area is occupied by Sobeys, which has a remaining lease term of approximately 12 years. The Sobeys lease includes 10,000 square feet of expansion area at any time during the lease term. Further, the property accommodates up to approximately 20,000 additional square feet in pad sites and/or multi-tenant development.

The property was acquired in co-ownership with ROI Capital Ltd., an established investment firm based in Toronto, Ontario with over $1.3 billion in assets under management, with Whiterock owning 49.9% and being the exclusive property manager. The purchase price of approximately $7.5 million (before closing costs), representing a capitalization rate of approximately 7.7%, was financed with cash on hand, net of an assumed 6-year first mortgage of approximately $5.4 million at a fixed rate of approximately 5.3%.

About Whiterock REIT

With the new Tillsonburg Gateway Shopping Centre acquisition, Whiterock's wholly-owned, co-owned, and long-term leased aggregate real estate portfolio now totals over 10.1 million square feet of gross leasable area across 79 properties, geographically diversified across 8 Canadian provinces and 2 U.S. states.

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of applicable securities legislation. These forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect" "estimate", "anticipate", "intend", "believe" or "continue", the negative forms thereof and similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. These statements are not guarantees of future events or performance and, by their nature, are based on Whiterock's estimates and assumptions, which are subject to known and unknown risks, uncertainties and other factors that may cause the actual events, results or prospects to be materially different from those expressed or implied herein. Readers are cautioned that a number of factors, including those discussed in the section entitled "Risk Factors" in Whiterock's Annual Information Form, which can be obtained at www.sedar.com, could cause actual events, results or prospects to differ materially from those stated or implied. These factors should be considered carefully, and a reader should not place undue reliance on forward-looking statements, as there can be no assurance that actual events, results or prospects will be consistent with such statements. In particular, but without limitation, there can be no assurance that Whiterock will be able to increase its AFFO or achieve the expected capitalization rate on the asset acquired. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a relatively stable leasing environment, the maintenance of current occupancy levels, stable interest costs, limited dilution from conversion of convertible debentures; stable acquisition capitalization rates and available access to equity and debt capital markets to fund, at acceptable costs, Whiterock's future growth plans, and to enable Whiterock to refinance its debt as it matures. In addition, historic performance is not necessarily indicative of future results. Except as specifically required by applicable law, Whiterock does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Whiterock Real Estate Investment Trust
    Jason Underwood
    (416) 907-4861

    Whiterock Real Estate Investment Trust
    Kursat Kacira
    (416) 572-0427