TORONTO,
April 4, 2013 /CNW/ - H&R Real
Estate Investment Trust ("H&R" or "H&R REIT") (TSX: HR.UN)
and Primaris Retail Real Estate Investment Trust ("Primaris") (TSX:
PMZ.UN) today announced that H&R has completed its previously
announced acquisition of Primaris. As part of the transaction, a
KingSett Capital-led consortium, which consists of certain KingSett
Capital managed funds, Ontario Pension Board and RioCan REIT,
acquired 17 Primaris properties pursuant to separate purchase
agreements between Primaris and the consortium members. H&R
then acquired Primaris and its remaining 27 properties.
Transaction Details
Unitholders who elected cash for their Primaris
units are entitled to $28 cash per
Primaris unit for approximately 55% of their Primaris units and
1.166 H&R stapled units per Primaris unit for the
balance. All other former Primaris unitholders are entitled
to 1.166 H&R stapled units for each Primaris unit.
H&R delivered an aggregate of approximately 62.1 million
stapled units pursuant to the transaction1.
As a result of the transaction, H&R has
acquired a $3.1 billion portfolio of 27 shopping centres. A
complete list of the acquired properties is appended to this
release. H&R expects to complete its previously announced sale
of South Cambridge Centre in Cambridge,
Ontario to RioCan for $35
million on April 5, 2013.
In connection with the transaction, holders of
approximately 2.1 million exchangeable units of certain
subsidiaries of Primaris now hold an equal number of exchangeable
units of certain subsidiaries of H&R each of which are
exchangeable for 1.166 H&R stapled units. Similarly, the 6.75%
(remaining aggregate principal amount outstanding $1,220,000), 6.30% (remaining aggregate principal
amount outstanding $7,726,000), and
5.40% (remaining aggregate principal amount outstanding
$74,963,000) convertible debentures
issued by Primaris (TSX: PMZ.DB, PMZ.DB.B, PMZ.DB.C) have been
assumed by H&R and are now convertible into H&R stapled
units at previously announced conversion ratios (new ticker symbols
TSX: HR.DB.F, HR.DB.G, HR.DB.H respectively). H&R intends
to promptly deliver to CIBC Mellon Trust Company, as trustee for
its 6.75% and 6.30% convertible debentures, notice of its intent to
redeem all such remaining outstanding debentures in accordance with
their terms. It is anticipated that such redemption will be
completed approximately 45 days following the delivery to the
trustee of the notice of intention to redeem.
In addition to the convertible debentures which
have been assumed by H&R, H&R has assumed an aggregate of
$1.4 billion principal amount of
mortgages on the acquired properties and has guaranteed the
operating line of PRR Trust, now a subsidiary of H&R REIT, the
outstanding principal of which is expected to be approximately
$105 million after all closing costs
have been paid.
The transaction was structured so former holders
of Primaris units who are resident in Canada and who held their Primaris units as
capital property received their H&R stapled units on a
substantially tax-deferred rollover (the receipt of H&R Finance
Trust units, the fair market value of which is 3.788% of the
aggregate fair market value of the total unit consideration
received by Primaris unitholders, is taxable).
_____________________________
1 Does not include 433,174 units held by a subsidiary of
H&R in partial satisfaction of exchange obligations related to
the H&R exchangeable units.
Executive Appointments
H&R REIT is pleased to announce the
appointments of Patrick Sullivan as
Chief Operating Officer of Primaris and Lesley Gibson as Executive Vice President,
Finance of Primaris, which continues operations as a wholly-owned
subsidiary of H&R.
Prior to this appointment, Mr. Sullivan served
as Primaris' Senior Vice President, Portfolio Management since
2011, where he had overall responsibility for operations and
leasing of Primaris' portfolio of properties; previously he was
Vice President of Portfolio Management for western Canada. Prior to joining Primaris, Mr.
Sullivan served as Director of Leasing with Oxford Properties Group
where he was responsible for its portfolio of shopping centres in
western Canada.
Mr. Sullivan holds a Bachelor of Commerce degree
from the University of British
Columbia.
Lesley Gibson has
been the Vice President of Finance with Primaris since its IPO in
2003. In this position, she oversaw corporate finance, accounting
and public reporting responsibilities for Primaris. Before
joining Primaris, Ms. Gibson worked at Borealis Capital Corporation
as Director, Client Reporting and at KPMG LLP as a Senior Manager
in the Real Estate Group.
Ms. Gibson earned a Bachelor of Arts (Economics)
at the University of Western Ontario
and holds a Chartered Accountant designation.
About H&R
H&R REIT is an open-ended real estate
investment trust, which owns a North American portfolio of 41
office, 112 industrial and 1642 retail properties
comprising over 53.4 million square feet and two development
projects, with a fair value of approximately $13.1 billion. The foundation of H&R's
REIT success since inception in 1996 has been a disciplined
strategy that leads to consistent and profitable growth. H&R
REIT leases its properties long term to creditworthy tenants and
strives to match those leases with primarily long-term, fixed-rate
financing.
H&R Finance Trust is an unincorporated
investment trust, which primarily invests in notes issued by a U.S.
corporation, which is a subsidiary of H&R REIT. The current
note receivable is U.S. $211.4
million. In 2008, H&R REIT completed an internal
reorganization, which resulted in each issued and outstanding
H&R REIT unit trading together with a unit of H&R Finance
Trust as a "Stapled Unit" on the Toronto Stock Exchange.
Primaris specializes in owning and operating
Canadian enclosed shopping centres that are dominant in their local
trade areas. Merchandising for each property is dynamic in order to
meet the unique needs of its local customers and the community.
Primaris maintains a high occupancy rate at its shopping centres
and has retail tenants that offer new and exciting brands. The
Primaris units are expected to be delisted from the Toronto Stock
Exchange on April 8, 2013.
FORWARD LOOKING INFORMATION
This press release contains forward looking
statements that reflect current expectations of each of Primaris
and H&R about their future results, performance, prospects and
opportunities, including with respect to costs and benefits of the
transaction and other statements that are not historical facts.
Readers are cautioned not to place undue reliance on forward
looking information. Each of Primaris and H&R has tried to
identify these forward looking statements by using words such as
"may", "will", "should" "expect", "anticipate", "believe",
"intend", "plan", "estimate", "potentially" and similar
expressions. By its nature, such forward looking information
necessarily involves known and unknown risks and uncertainties that
may cause actual results, performance, prospects and opportunities
in future periods of Primaris or H&R to differ materially from
those expressed or implied by such forward looking statements.
______________________________
2 Does not include South Cambridge Centre.
New H&R Properties
|
|
|
|
|
|
Property |
Location |
Tenants (>50,000
sq.ft.) |
Build Date/
Last Renovation |
GLA (sq.ft.) |
Occupancy |
Enclosed
Centres |
|
|
|
|
|
|
Sunridge Mall |
Calgary, AB |
The Bay, Target |
1981 / 2005 |
814,000 |
99.40% |
|
Place d'Orleans |
Orleans, ON |
Target, The Bay, Sport Check, Fed.
Govt. |
1979 / 1999 |
759,000 |
96.10% |
|
Orchard Park Shopping Centre |
Kelowna, BC |
The Bay, Sears |
1971 / 2007 |
712,000 |
98.50% |
|
Catarqui Centre |
Kingston, ON |
Sears, The Bay, Target |
1982 / 2006 |
596,000 |
98.50% |
|
Place du Royaume |
Saguenay, QC |
Wal-Mart, Canadian Tire |
1973 / 2008 |
592,000 |
97.50% |
|
Dufferin Mall |
Toronto, ON |
Wal-Mart, No Frills |
1956 / 2007 |
563,000 |
96.20% |
|
Medicine Hat Mall |
Medicine Hat, AB |
Target, The Bay, Sears,
Safeway |
1980 / 2008 |
539,000 |
100.00% |
|
Stone Road Mall |
Guelph, ON |
Sears, The Bay, Target |
1975 / 2007 |
513,000 |
98.80% |
|
Northland Village Mall |
Calgary, AB |
Wal-Mart |
1971 / 2005 |
503,000 |
100.00% |
|
McAllister Place |
Saint John, NB |
Sears, Target |
1978 / 2011 |
489,000 |
98.30% |
|
Regent Mall |
Fredericton, NB |
Sears, Wal-Mart |
1976 / 2010 |
488,000 |
99.80% |
|
Park Place Shopping Centre |
Lethbridge, AB |
Sears |
1988 / 2001 |
471,000 |
98.00% |
|
Sherwood Park Mall |
Sherwood Park, AB |
Target, Safeway |
1972 / 2012 |
461,000 |
99.00% |
|
Grant Park |
Winnipeg, MB |
Target, Safeway |
1962 / 1996 |
386,000 |
96.30% |
|
St Albert Centre |
Edmonton, AB |
Target, The Bay, Winners |
1980 / 1995 |
316,000 |
100.00% |
|
Total / Weighted Average |
|
|
|
8,202,000 |
98.4% |
Other
Properties |
|
Garden City |
Winnipeg, MB |
Home Depot |
1976 / 2004 |
161,000 |
98.70% |
|
Edinburgh Market Place |
Guelph, ON |
Metro |
1996 / 2008 |
113,000 |
97.60% |
|
Park Plaza |
Medicine Hat, AB |
n/a |
1981 / 2004 |
61,000 |
100.00% |
|
Northland Professional Centre |
Calgary, AB |
n/a |
1978 |
51,000 |
100.00% |
|
Sherwood Park Plaza |
Sherwood Park, AB |
n/a |
1988 / 2005 |
44,000 |
100.00% |
|
Dunmore Plaza |
Medicine Hat, AB |
n/a |
1989 / 1999 |
30,000 |
100.00% |
|
Carry Drive Plaza |
Medicine Hat, AB |
n/a |
1989 / 2004 |
30,000 |
98.00% |
|
Trans-Canada Plaza |
Medicine Hat, AB |
n/a |
2005 |
20,000 |
100.00% |
|
Northland Shoppes |
Calgary, AB |
n/a |
1974 / 1999 |
14,000 |
100.00% |
|
Scotia Plaza |
Medicine Hat, AB |
n/a |
1996 |
11,000 |
100.00% |
|
Development Land |
Sherwood Park, AB |
n/a |
0 |
0 |
0 |
|
Total / Weighted Average |
|
|
|
535,000 |
99.0% |
Total/Weighted
Average |
|
|
|
8,737,000 |
98.4% |
SOURCE H&R Real Estate Investment Trust