Wednesday, July 12, 2017
Vancouver, BC – July 12, 2017: Pure Industrial Real Estate Trust (TSX: AAR.UN) (the “Trust”) announced today the following:
- A lease agreement with IKEA Distribution Services CA Inc. for 100% of the Trust’s Richmond, B.C. development site; and
- $16.1 million acquisition of a property targeted for redevelopment in Scarborough, Ontario.
LEASE AGREEMENT IN RICHMOND, B.C.
The Trust announced today that it has entered into lease agreement with IKEA Distribution Services CA Inc (“IKEA”) to occupy 100% of the Trust’s Richmond development asset. IKEA will occupy the entire 330,540 square foot (“sf”) development on a 7-year lease term. In 2015, IKEA Canada announced its ambition to double in size and expand coast to coast. This facility will fulfill both IKEA’s in-store and e-commerce distribution requirements in Western Canada and will be their third distribution centre in Canada.
In October 2016, the Trust announced the commencement of the development of this asset on a speculative basis for a total estimated development cost of $40.0 million. Located on 7031 York Road, this state-of-the-art distribution facility is the fourth and final phase of development in the Trust’s existing East Richmond Business Park. The development is expected to reach substantial completion in Q4 2017 with rent scheduled to commence on December 1, 2017.
In April 2017, the Trust announced the acquisition of two Class A distribution centres in Houston, Texas, both leased to IKEA. Pro-forma this lease agreement in Richmond, IKEA will represent approximately 5.3% of the Trust’s total revenue and will become the Trust’s second largest tenant in its portfolio.
The Trust also today announced that it has reached an unconditional agreement to purchase a 150,000 sf warehouse in Scarborough, Ontario for $16.1 million (the “GTA development”). The warehouse is situated on a 14.8 acre site and is currently leased until the end of January 2018. The Trust will enter into a development agreement at closing to redevelop the site, on a speculative basis, with a new state-of-the-art 300,000 sf distribution centre for a total estimated cost of $35.1 million, including land. The Trust expects to close the acquisition on July 13, 2017 and will finance the acquisition with existing cash on hand. The completion of the GTA development is forecast for Q1 2019.
Kevan Gorrie, President and Chief Executive Officer, commented, “Today’s announcements affirm that selective development is a key part of our strategy, and we have a proven track record of enhancing cashflow through value-add opportunities. Over the last four years alone we have completed over $300 million of development and expansion projects across Canada and the U.S, all of which have translated into significant NAV growth per unit to the Trust and delivered real unitholder value.
“We continue to build on our industry-leading portfolio of modern distribution and e-commerce properties in key markets in Canada and the U.S., and we believe that strategic and selective development is a valuable component of our growth strategy.”
ABOUT PURE INDUSTRIAL REAL ESTATE TRUST
The Trust is an unincorporated, open-ended investment trust that owns and operates a diversified portfolio of income-producing industrial properties in leading markets across Canada and key distribution and logistics markets in the United States. The Trust is an internally managed REIT and is one of the largest publicly-traded REITs in Canada that offers investors exposure to industrial real estate assets in Canada and the United States.
For more information please contact:
Director, Investor Relations
(416) 479-8590 Ext 267
Pure Industrial Real Estate Trust
Suite 910, 925 West Georgia Street
Vancouver, BC V6C 3L2
Phone: (888) 681-5959
Toronto Stock Exchange – AAR.UN
The Trust prepares and releases unaudited quarterly and audited consolidated annual financial statements prepared in accordance with IFRS (GAAP). The Trust may disclose and discuss certain non-GAAP financial measures, including NAV (“net asset value”). The non-GAAP measures are further defined and discussed in the MD&A dated May 9, 2017, available on SEDAR at www.sedar.com, which should be read in conjunction with this release. Since NAV is not determined by IFRS, such measure may not be comparable to similar measures reported by other issuers. The Trust has presented such non-GAAP measure as management believes this measure is a relevant measure of the Trust’s underlying value. This non-GAAP measure should not be construed as an alternative to net income (loss) or cash flow from operating activities determined in accordance with GAAP as an indicator of the Trust’s performance. Please refer to “Additional IFRS Measures and Non-IFRS Measures” in the Trust’s MD&A.
Certain statements contained in this news release may constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "plan", "expect", "may", "will", "intend", "should", “forecast” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Forward looking statements in this news release include the following: (i) the Richmond development is estimated to cost $40.0 million; (ii) the Richmond development is expected to reach substantial completion in Q4 2017 with rent scheduled to commence December 1, 2017; (iii) IKEA will represent approximately 5.3% of the Trust’s total revenue and will become the Trust’s second largest tenant in its portfolio; (iv) the GTA development is estimated to cost $35.1 million, including land; (v) The Trust expects to close the GTA development acquisition on July 13, 2017 and will finance the acquisition with existing cash on hand; and (vi) the completion of the GTA development is forecast for Q1 2019.
Although the Trust believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Trust can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, competitive factors in the industries in which the Trust operates, prevailing economic conditions, and other factors, many of which are beyond the control of the Trust.
The forward-looking statements contained in this news release represent the Trust’s expectations as of the date hereof, and are subject to change after such date. The Trust disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
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