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TORONTO, March 30, 2017 /CNW/ – Automotive Properties Real Estate Investment Trust (TSX: APR.UN) (the “REIT”) today announced that it has entered into agreements to purchase two automotive dealership properties: the Heritage Honda dealership property in Calgary, Alberta and the Barrie Volkswagen dealership property in Barrie, Ontario. The combined purchase price for the two properties, which were part of the Dilawri Group development pipeline at the time of the REIT’s IPO, is approximately $32.5 million. The addition of these properties is expected to be immediately accretive to the REIT’s Adjusted Funds from Operations (“AFFO”) on a per unit basis.
The purchase price for the Heritage Honda property is $23.6 million. The dealership facility is newly built and operated by the Dilawri Group, Canada’s largest automotive dealership operator. The 58,913 square-foot, full-service facility is located on 4.19 acres at 11609 40 Street SE in Calgary, with convenient access from the high-traffic Deerfoot Trail Highway and in close proximity to substantial retail and industrial activity. On closing, Heritage Honda, the operating tenant, will enter into an 18-year triple-net lease with the REIT, with four extension terms of five years each. The lease includes a contractual 1.5% annual rent increase after year one.
The Barrie Volkswagen property, which is being acquired from the Dilawri Group for $8.9 million, was expanded and completely renovated in 2016. The 20,102 square-foot, full-service facility is located on 1.75 acres at 50 and 60 Fairview Road in Barrie, Ontario, just north of Toronto. It has excellent visibility from Highway 400, the major north/south arterial roadway, with a number of major retail outlets, hotels and restaurants in close proximity. On closing, Barrie Volkswagen, the operating tenant, will enter into a 17-year, triple-net lease with the REIT with four extension terms of five years each. The lease includes a contractual 1.5% annual rent increase after year one.
“The acquisition of these properties is consistent with the REIT’s strategy to accretively acquire modern, well-located dealership properties in major markets, tenanted by industry-leading automotive dealership operators,” said Milton Lamb, President and CEO of Automotive Properties REIT.
The REIT intends to satisfy the cumulative purchase price through a combination of proceeds from the $46 million offering of REIT units in February 2017 and existing credit facilities. The REIT has completed its due diligence in connection with these acquisitions and both are expected to close in April 2017, 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 33 income producing commercial properties represents approximately 1.3 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”, “anticipates” and “expected”. 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 most recently filed on SEDAR (www.sedar.com) and in the REIT’s current annual information form which is also available on SEDAR. 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. This forward-looking information speaks as of the date of this news release.
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
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