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TORONTO, December 30, 2021 / CNW / – Automotive Properties Real Estate Investment Trust (TSX: APR.UN) (“Automotive Properties REIT” or the “REIT”) announced today that it has entered into agreements with a group of dealers to purchase of two car dealership properties in Quebec (the “Properties”) for a combined purchase price of $ 23.4 million. The properties consist of Sherbrooke Honda, located at 2555/2615 King Street West in Sherbrooke and Magog Honda, located at 2390/2400 rue Sherbrooke in Magog. The addition of the properties is expected to have an immediate accretive effect on the REIT’s adjusted funds from operations (“AFFO”) ¹ per unit on a non-leveraged basis.
The Sherbrooke Honda property consists of a full-service, 26,990 square foot Honda dealership, renovated in 2014, which is located on 1.7 acres of land along a commercial corridor on King Street West (Route 112). the Sherbrooke The metropolitan area has a population of approximately 212,000, making it the fourth largest metropolitan area in Quebec. At closing, the operating tenant of Sherbrooke Honda will enter into a 15-year triple net lease with the REIT which includes a contractual annual rent increase based on the Quebec consumer price index, and of at least 1.5 %, after the first year of the lease term.
The Magog Honda property consists of two buildings totaling 56,195 square feet, including a full-service Honda dealership built in 2006 with expansions completed in 2009 and 2011, and a used and service car plant, built in 2008. Magog Honda is located on 6.5 acres of land along a commercial corridor at the intersection of highway 55 and route 112 in the immediate vicinity of Sherbrooke. At closing, the operating tenant of Magog Honda will enter into a 15-year triple net lease with the REIT which includes a contractual annual rent increase based on the Quebec consumer price index, and of at least 1.5 %, after the first year of the lease term.
The REIT also exercised its right of first refusal and entered into an agreement to purchase approximately 2.15 acres of land at 20257 Langley Bypass in Langley, British Columbia a third party, which is the subject of a ground lease paid by the operator of the Acura Langley dealership, a subsidiary of the Dilawri group and a current tenant of the REIT. The land lease expires on June 30, 2032. The purchase price of the land was around $ 15.1 million (the “Acura Langley Land and Lease Acquisition”).
“The acquisition of the Sherbrooke Honda and Magog Honda properties will increase our footprint by Quebec and expand our relationships with major dealer groups, ”said Milton Lamb, President and Chief Executive Officer of the REIT. “The transaction involving Acura Langley allows us to consolidate the ownership of the land and building and related leases, thereby further increasing the value of our real estate portfolio in the Greater Vancouver area. ”
The REIT expects to complete the Acura Langley Property Acquisitions and Land Acquisitions and Leases in January 2022, subject to customary closing conditions, and fund their respective purchase prices using its revolving credit facilities. The Acura Langley land acquisition and leases have been unanimously approved by the independent trustees of the REIT.
About Automotive Properties REIT
Automotive Properties REIT is an unincorporated open-ended real estate investment trust focused on the ownership and acquisition of primarily lucrative auto dealership properties located in Canada. The REIT’s portfolio currently consists of 66 income-producing commercial properties, representing approximately 2.5 million square feet of gross leasable area, in metropolitan markets across British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebecois. Automotive Properties REIT is the only public vehicle Canada focused on consolidating real estate properties from car dealerships. For more information, please visit: www.automotivepropertiesreit.ca.
(1) Financial measure not in accordance with IFRS
This press release contains a financial measure that is not defined under IFRS and may not be comparable to similar measures presented by other companies or REITs. AFFOs are a key measure of earnings performance used by real estate companies. This measure is not defined by IFRS and does not have a standardized meaning prescribed by IFRS, and should therefore not be interpreted as an alternative to net income or cash flows from operating activities calculated in accordance with IFRS. The REIT believes that AFFOs are an important measure of the performance of economic earnings and are indicative of the ability of the REIT to make distributions from earnings. The most directly comparable IFRS measure to AFFOs is net income. Please refer to REITs Management Discussion and Analysis (“MD&A “) most recently filed on SEDAR for a more in-depth discussion of this non-IFRS financial measure.
This press release contains forward-looking information within the meaning of applicable securities laws, which reflects the REIT’s current expectations regarding future events and, in some cases, may be identified by terms such as “will” and “is expected. “. Forward-looking information includes statements regarding the financial impact of the acquisition on the REIT’s net operating cash flow per unit and the expected timing of the acquisitions to close. 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 control of the REIT and which could cause actual results and events to occur. differ materially from those disclosed or implied by such forward-looking information. These risks and uncertainties include, without limitation, the factors described under “Risks and Uncertainties, Critical Judgments and Estimates” in the REIT’s most recent MD&A and in the REIT’s Annual Information Form dated March 23, 2020, both of which are available on SEDAR (www.sedar.com). The REIT assumes no 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 is only valid as of the date of this press release.
SOURCE Automotive Properties real estate investment fund
For further information: Bruce Wigle, Investor Relations, Bay Street Communications, Tel. : 647-496-7856; Milton Lamb, President and CEO, Automotive Properties REIT, Tel. : (647) 789-2445; Andrew Kalra, Chief Financial Officer and Corporate Secretary, Automotive Properties REIT, Tel. : (647) 789-2446