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TORONTO, Nov. 28, 2016 /CNW/ – Automotive Properties Real Estate Investment Trust (TSX: APR.UN) (the “REIT”) today announced that it has entered into an agreement with an unrelated party to purchase an automotive dealership property located at 1905 and 1917 Boulevard Sir Wilfred Laurier in St. Bruno, Quebec (the “Property”) within the Greater Montreal Area, for a purchase price of approximately $14.3 million. The Property is occupied by one Audi dealership and one Volkswagen dealership, located on 4.3 acres. The addition of this Property is expected to be immediately accretive to the REIT’s Adjusted Funds from Operations (“AFFO”) on a per unit basis.
“This Property represents our second acquisition in Montreal and further diversifies our automotive brand representation in Canada’s second largest urban market,” said Milton Lamb, President and CEO of Automotive Properties REIT. “The Property will have an 18-year, triple-net lease with an annual 1.5% fixed rent escalator, thereby further enhancing our stable and growing cash flows in support of unitholder distributions.”
The Volkswagen dealership was built in 1987 and the Audi dealership was built in 2003. Both buildings underwent major renovations in 2014 and 2015, and have a combined total gross leasable area of 62,705 square feet.
Upon closing of the acquisition, the Dilawri Group, Canada’s largest automotive dealership company, will enter into an 18-year lease with the REIT and will be the operating tenant of the Audi and Volkswagen dealerships on the Property.
The REIT intends to satisfy the purchase price through draws on its existing credit facilities and cash on hand. The REIT has completed its diligence in connection with this acquisition and closing is expected to occur by early December 2016, subject to customary closing conditions.
About Automotive Properties REIT
Automotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive dealership properties located in Canada. The REIT’s portfolio of 30 income producing commercial properties represents approximately 1.1 million square feet of gross leasable area in Ontario, Saskatchewan, Alberta, British Columbia and QuÃ©bec. Automotive Properties REIT is the only public vehicle in Canada focused on consolidating automotive dealership real estate properties. For more information, please visit: www.automotivepropertiesreit.ca.
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT’s current expectations regarding future events and in some cases can be identified by such terms as “will”, “expected” and “intends”. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT’s control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under “Risks and Uncertainties” in the REIT’s management’s discussion and analysis (“MD&A”) most recently filed on SEDAR (www.sedar.com). The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
Non-IFRS Financial Measure
This news release contains a financial measure which is not defined under IFRS and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. AFFO is a key measure of performance used by real estate businesses. This measure is not defined by IFRS and does not have a standardized meaning prescribed by IFRS, and therefore should not be construed as an alternative to net income or cash flow from operating activities calculated in accordance with IFRS. The REIT believes that AFFO is an important measure of economic performance and is indicative of the REIT’s ability to pay distributions. The IFRS measurement most directly comparable to AFFO is net income. Please refer to the REIT’s MD&A for further discussion of this non-IFRS financial measure.
SOURCE Automotive Properties Real Estate Investment Trust