TORONTO, June 6, 2019 /CNW/ - H&R Real Estate
Investment Trust ("H&R") (TSX: HR.UN) is pleased to announce
that it has closed the sale of The Atrium for $640 million. The sale price equates to a
4.56% capitalization rate on the next twelve months forecasted
property operating income.
The Atrium sale demonstrates H&R's commitment to its
industry-leading balance sheet and BBB+ credit rating, as well as
the capital discipline to prioritize investment opportunities and
recycle capital. At March 31,
2019, H&R had $536.8
million of properties under development, and multiple
additional higher-return development, redevelopment and
intensification opportunities embedded in its portfolio.
H&R purchased The Atrium for $344.8
million in 2011 and since the acquisition, has increased
annual net operating income by $6.5
million, creating substantial value for unitholders.
The Atrium's IFRS value as at March
31, 2019 was $600
million. The sale price for The Atrium was
approximately $295 million higher
than its original purchase price and management expects to record a
gain of approximately $40 million,
before closing costs, relative to its IFRS value.
The Atrium was unencumbered at the time of the sale.
H&R has provided the purchaser with a vendor take-back (VTB)
mortgage of $256 million, bearing
interest at an annual rate of 4.56% and maturing on January 2, 2020. H&R intends to use the
proceeds to repay approximately $230
million of debt outstanding under its revolving credit
facilities and also repay the Series M debentures, totalling
$150 million, when the debentures
mature on July 23, 2019.
About H&R REIT
H&R REIT is one of Canada's
largest real estate investment trusts with total assets of
approximately $14.5 billion at
March 31, 2019. H&R REIT
has ownership interests in a North American portfolio of high
quality office, retail, industrial and residential properties
comprising over 43 million square feet.
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, the use of proceeds from
the sale of The Atrium, H&R's expected gain relative to The
Atrium's IFRS value and H&R's higher-return development,
redevelopment and intensification opportunities. 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.
Additional information regarding H&R REIT is available at
www.hr-reit.com and on www.sedar.com.
SOURCE H&R Real Estate Investment Trust