Plaza Retail REIT Partners with Canadian Pension Fund to Increase its Interests and Returns in Two Moncton-area Plazas

FREDERICTON, Feb. 1, 2018 /CNW/ - Plaza Retail REIT (TSX: PLZ.UN) ("Plaza" or the "REIT") today announced that it has increased its interest in each of two Moncton-area plazas from 10% to 50%, with a Canadian pension fund buying the other 50% on a co-ownership basis. Both properties were previously co-owned with Plaza through two retail syndications.  The REIT's incremental gross investment is approximately $17.0 million, and its incremental net investment is approximately $5.6 million.  This transaction reflects Plaza's strategy to capitalize on opportunities within its existing portfolio and enter into value-enhancing transactions that both increase the assets of the REIT and provide for higher unitholder returns.

"We are pleased to have structured a deal whereby we increase our ownership from 10% to 50% in these two assets that we have been operating for many years and as a result we grow our FFO, AFFO and cash flow per unit," said Michael Zakuta, President and CEO of the REIT.

Plaza owned its previous 10% interests in the 205,148 square foot Northwest Centre and the 65,842 square foot Shediac West Plaza since 2003 and 2009, respectively. Accordingly, the REIT knows the properties well and management is very comfortable increasing its interest. As a result of the change to 50% ownership, Plaza will account for the results of the plazas on a proportionate consolidation basis, as opposed to the previous equity/fair value method.

The previous syndications for these two properties, whose interests were bought out as a result of these transactions, included certain related parties of Plaza – namely; Earl Brewer, Michael Zakuta, Edouard Babineau and Denis Losier.  A Special Committee of Independent Trustees of Plaza was formed to review and approve the related party transactions.

About Plaza
Plaza is an open-ended real estate investment trust and is a leading retail property owner and developer, particularly in Eastern Canada.  Plaza's portfolio at September 30, 2017 includes interests in 295 properties totaling approximately 7.7 million square feet across Canada and additional lands held for development.  Plaza's properties include a mix of strip plazas, stand-alone small box retail outlets and enclosed shopping centres, anchored by approximately 90% national tenants.  For more information, please visit www.plaza.ca.  

Forward-looking Information
This press release contains forward-looking statements.  All statements or phrases other than those which relate to historical facts may constitute forward-looking statements, including statements in this press release related to the anticipated financial performance of the REIT as a result of the transaction, such as growth to FFO, AFFO and cash flow per unit.  Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Plaza to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements contained in this press release, including but not limited to those described in Plaza's Annual Information Form for the year ended December 31, 2016 and Management's Discussion and Analysis for the period ended September 30, 2017, which can both be obtained on SEDAR at www.sedar.com.  Forward-looking statements are based on a number of expectations and assumptions made in light of management's experience and perceptions of historical trends and current conditions including that the properties will continue to perform as anticipated and that the expected benefits from the transaction will be realized. Although the forward-looking statements contained in this press release are based upon information currently available to management and what management believes are reasonable expectations and assumptions, there can be no assurances that forward-looking statements will prove to be accurate. Therefore, readers should not place undue reliance on forward-looking statements. All forward-looking statements speak only as of the date of this press release and Plaza undertakes no obligation to update such statements, except as required by law. These cautionary statements qualify all forward-looking statements contained in this press release.

 

SOURCE Plaza Retail REIT