TORONTO, Oct. 6, 2016 /CNW/ - H&R Real Estate
Investment Trust ("H&R") (TSX: HR.UN; HR.DB.D; HR.DB.E;
HR.DB.H) has, subject to customary conditions, entered into an
agreement to sell a 50% non-managing interest in the TransCanada
Tower in Calgary to HOOPP Realty
Inc., a wholly-owned subsidiary of the Healthcare of Ontario
Pension Plan ("HOOPP") for approximately $257.4 million which equates to a 5.15%
capitalization rate on current net operating income. The
property has almost doubled in value since its construction by
H&R in 2001.
Use of proceeds will be to repay debt, including the existing
mortgage of $82.1 million.
H&R's proforma debt to total asset ratio is expected to improve
to 44.2% from 45.8% at June 30,
2016. H&R's unencumbered pool of assets is expected to
grow to $2.6 billion while total
unsecured debt is expected to decrease to $1.3 billion, resulting in a 2.0 times
unencumbered asset coverage ratio.
H&R's President and CEO, Thomas
Hofstedter, said: "We are pleased to be partnering
with HOOPP, one of Canada's
premier pension funds and look forward to the beginning of a
successful and long-term relationship. The selling price and
capitalization rate of this property validates our strategy of
acquiring high quality properties leased long-term to creditworthy
tenants."
Closing is expected to occur in November
2016.
About H&R REIT and H&R Finance Trust
H&R REIT is Canada's
largest diversified real estate investment trust with total assets
of approximately $14.5 billion at
June 30, 2016. H&R REIT is a
fully internalized real estate investment trust and has ownership
interests in a North American portfolio of high quality office,
retail, industrial and residential properties comprising over 46
million square feet.
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
balance is U.S. $220.4 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.
Forward-looking Statements
Certain statements in this news release contain forward-looking
information within the meaning of applicable securities laws (also
known as forward-looking statements). These forward-looking
statements include, but are not limited to H&R's plans,
objectives, expectations and intentions, including the repayment of
the existing mortgage on TransCanada Tower, the expected closing
date of the 50% non-managing interest in TransCanada Tower,
H&R's expected pro forma debt to asset ratio and H&R's
proforma unencumbered assets and unsecured debt. Such
forward-looking statements reflect H&R's current beliefs and
are based on information currently available to management. These
statements are not guarantees of future performance and are based
on H&R's estimates and assumptions that are subject to risks
and uncertainties, including those discussed in H&R's materials
filed with the Canadian securities regulatory authorities from time
to time, which could cause the actual results and performance of
H&R to differ materially from the forward-looking statements
contained in this news release. Although the forward-looking
statements contained in this news release are based upon what
H&R believes are reasonable assumptions, there can be no
assurance that actual results will be consistent with these
forward-looking statements. All forward-looking statements in this
news release are qualified by these cautionary statements. These
forward-looking statements are made as of today and H&R, except
as required by applicable law, assumes no obligation to update or
revise them to reflect new information or the occurrence of future
events or circumstances.
SOURCE H&R Real Estate Investment Trust