FOR IMMEDIATE DISTRIBUTION. NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES.
EDMONTON, Alberta, Dec. 08, 2020 (GLOBE NEWSWIRE) — Melcor Real Estate Investment Trust (TSX:MR.UN) (“the REIT”) today announced that its Board of Trustees held its annual strategic planning and budgeting session for the upcoming year on December 4, 2020. Among other matters, the content and recommendations of the press release issued by FC Private Equity Realty Management Corp. (“Firm Capital”) on Monday, November 23, 2020 were further reviewed.
Ralph Young, Chairman of the Board reported on the results of the meeting: âThe REIT board has and will continue to serve and represent all unitholders.
âWe understand unitholder concerns regarding the recent decline in unit value and the reduced monthly distribution from April â December 2020. The REIT Board points to three primary factors for these adjustments to unit price and distributions:
| i) | the decline in the Alberta economy, which began in 2014 | |
| ii) | capital market concerns regarding new and emerging trends in office and retail assets | |
| iii) | capital market concerns regarding the COVID pandemic impact on business operations and reaction to the remedial measures announced | |
The Boardâs duty is to protect the assets, earnings and distributions of the Trust. Given the challenges that the REIT currently faces, the Board believes that its focus must remain on securing future sustainability until we have greater certainty on COVID-19âs impact on our business.
The Board has conducted its duty of care in a responsible manner, as demonstrated by the following actions:
- Approval by the independent trustees on matters as required by the Declaration of Trust and the use of the independent committee on all related party transactions with Melcor.
- The use of the independent committee on all matters as required by the Declaration of Trust.
- The use of outside independent advisors to the independent committee where appropriate.
- Immediate steps were taken to preserve cash and to mediate against the potential of a severe impact to our business from COVID-19. Initial measures were announced on March 20, 2020.
- The reduction in director retainers effective April 1, 2020; non-independent Trustee retainers were reduced by 50% and independent Trustee retainers were reduced by 25%. Meeting fees were also reduced. In addition, we did not replace two trustees who did not seek re-election at the 2020 AGM.
- Strategic options are regularly reviewed and considered at all board meetings.
- The REIT entered into various management agreements with Melcor Developments in 2013 (at IPO). These agreements were renewed in 2018 with no increase in costs to the REIT, other than standard provisions for revenue and asset growth.
In reviewing the strategic plan and budget for 2021, the REIT Board made the following decisions:
- To continue to review distributions quarterly, with adjustments made according to financial conditions. The next regularly scheduled dividend announcement will be made on January 15, 2021.
- To review management agreements with Melcor Developments for possible cost reductions to the REIT.
- To continue to review strategic options, with the independent committee taking the lead in this endeavor.
- To continue to focus on sustainable returns to unitholders while at the same time providing strong leasing, service, management and effective care to our tenants and assets.â
About Melcor REIT
Melcor REIT is an unincorporated, open-ended real estate investment trust. Melcor REIT owns, acquires, manages and leases quality retail, office and industrial income-generating properties in Western Canada. Its portfolio is currently made up of interests in 39 properties representing approximately 3.21 million square feet of gross leasable area located across Alberta and in Regina, Saskatchewan and Kelowna, British Columbia. For more information, please visit www.melcorREIT.ca.
Forward-Looking Statements
This press release may contain forwardâlooking information within the meaning of applicable securities legislation, which reflects the REIT’s current expectations regarding future events. Forwardâlooking 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 forwardâlooking information. Such risks and uncertainties include, but are not limited to, general and local economic and business conditions; the financial condition of tenants; the REITâs ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest rate fluctuations. The REITâs objectives and forwardâlooking statements are based on certain assumptions, including that the general economy remains stable, interest rates remain stable, conditions within the real estate market remain consistent, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forwardâlooking information in this press release speaks as of the date of this press release. The REIT does not undertake to update any such forwardâlooking information whether as a result of new information, future events or otherwise.
Additional information about these assumptions and risks and uncertainties is contained in the REITâs filings with securities regulators.
Contact Information:Investor RelationsNicole ForsytheTel: 780.945.4707Tel:1.855.673.6931 (x4707)