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TORONTO, Dec. 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 dealership group to purchase two automotive 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 Sherbrooke Street in Magog. The addition of the Properties is
expected to be immediately accretive to the REIT's Adjusted Funds
from Operations ("AFFO")¹ per unit on a leverage-neutral basis.
The Sherbrooke Honda property consists of a 26,990 square-foot,
full-service Honda dealership facility, renovated in 2014, that is
situated on 1.7 acres of land along a commercial corridor on
King Street West (Route 112). The
Sherbrooke Metropolitan Area has a
population of approximately 212,000, representing the fourth
largest metropolitan area in Quebec. On closing, the operating tenant of
Sherbrooke Honda will enter into a 15-year, triple-net lease with
the REIT that includes a contractual annual rent increase based on
the Quebec Consumer Price Index, and no less than 1.5%, after year
one of the lease term.
The Magog Honda property consists of two buildings totaling
56,195 square-feet, including a full-service Honda dealership
facility built in 2006 with expansions completed in 2009 and 2011,
and a used car and service facility, built in 2008. Magog
Honda is situated on 6.5 acres of land along a commercial corridor
at the intersection of Autoroute 55 and Route 112 in close
proximity to Sherbrooke. On
closing, the operating tenant of Magog Honda will enter into a
15-year, triple-net lease with the REIT that includes a contractual
annual rent increase based on the Quebec Consumer Price Index, and
no less than 1.5%, after year one of the lease term.
The REIT has 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 from a third party, that is subject to a
land lease paid by the operator of the Acura Langley dealership, an
affiliate of the Dilawri Group, and an existing tenant of the REIT.
The land lease matures on June 30,
2032. The purchase price for the land was approximately
$15.1 million (the "Acura Langley
Land and Lease Acquisition").
"The acquisition of the Sherbrooke Honda and Magog Honda
properties will increase our footprint in Quebec and expand our relationships with
leading dealership groups," said Milton
Lamb, President and CEO of the REIT. "The transaction
involving Acura Langley enables us to consolidate ownership of the
land and building and the related leases, thereby further enhancing
the value of our property portfolio in the Greater Vancouver Area."
The REIT expects to close the acquisitions of the Properties and
the Acura Langley Land and Lease Acquisition in January 2022, subject to customary closing
conditions, and fund their respective purchase prices by drawing on
its revolving credit facilities. The Acura Langley Land and
Lease Acquisition was unanimously approved by the REIT's
independent trustees.
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
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 Québec. 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.
(1) 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
earnings 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 earnings performance and is
indicative of the REIT's ability to pay distributions from
earnings. The IFRS measurement most directly comparable to AFFO is
net income. Please refer to the REIT's Management Discussion
& Analysis ("MD&A") most recently filed on SEDAR for
further discussion of this non-IFRS financial measure.
Forward-Looking Information
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" and "is expected".
Forward-looking information includes statements regarding the
financial impact of the acquisition on the REIT's AFFO per unit and
the expected timing of closing the acquisitions. 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 &
Uncertainties, Critical Judgements & 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 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 only as of the date of this news
release.
SOURCE Automotive Properties Real Estate Investment Trust