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Enter Symbol
or Name
USA
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Cominar Real Estate Investment Trust
Symbol CUF
Shares Issued 143,908,457
Close 2014-09-30 C$ 18.90
Market Cap C$ 2,719,869,837
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Cominar closes $1.35-billion Ivanhoe property deal

2014-10-01 08:07 ET - News Release

Mr. Michel Dallaire reports

COMINAR ANNOUNCES CLOSING OF ACQUISITION OF LANDMARK REAL ESTATE PORTFOLIO FROM IVANHOE CAMBRIDGE

Cominar Real Estate Investment Trust has closed its previously announced acquisition of a real estate portfolio from Ivanhoe Cambridge Inc., the real estate subsidiary of the Caisse de depot et placement du Quebec, for a purchase price of approximately $1.35-billion. The acquired portfolio, comprising a total of approximately five million square feet of gross leasable area, consists of 10 retail properties (4.2 million square feet), three office properties (700,000 square feet), including one property under development, and one industrial and mixed-use property (100,000 square feet). The portfolio includes the 50-per-cent and 15-per-cent interests of the co-owners of Mail Champlain and Les Galeries de Hull, which Cominar also acquired today.

The acquisition increases Cominar's asset base by approximately 21 per cent to more than $7.8-billion with more than 44 million square feet of leasable area. The acquisition also enhances Cominar's asset type diversification profile, increasing its retail net operating income contribution from 24 per cent to 36 per cent, with office at 45 per cent and industrial and mixed use at 19 per cent. The acquisition has a marginal impact on geographic distribution.

The acquisition of Centre Rockland, consisting of a 649,174-square foot enclosed shopping mall located in the town of Mount Royal, remains subject to a right of first refusal of a third party, and is not included in the acquisition announced today. Cominar's offer to acquire Centre Rockland, if the right of first refusal is not exercised, remains in place.

The approximately 104 Ivanhoe Cambridge employees dedicated to the properties acquired today have been transferred to Cominar.

                              DETAILS OF THE PORTFOLIO

                        Property                           Location             GLA(1)

Retail                  Mail Champlain                     Brossard, Que.         718   
                        Centropolis                        Laval, Que.            674   
                        Galeries Rive-Nord                 Repentigny, Que.       569   
                        Les Rivieres                       Trois-Rivieres, Que.   422   
                        Dixie Outlet Mall                  Mississauga, Ont.      419   
                        Carrefour Rimouski                 Rimouski, Que.         345   
                        Centre Commercial Riviere-du-Loup  Riviere-du-Loup, Que.  312   
                        Carrefour St-Georges               St-Georges, Que.       311   
                        Les Galeries de Hull               Gatineau, Que.         306   
                        Carrefour Frontenac                Thetford Mines, Que.   180   
                                                                                -----
Total retail                                                                    4,256 
Office                  Edifice de la Haute-Ville          Quebec City, Que.      284   
                        55 University Ave.                 Toronto, ON            258   
                        3055 St-Martin Blvd. West(2)       Laval, Que.            118   
                                                                                -----
Total office                                                                      660   
Industrial              Le 505 Parc Technologique          Quebec City, Que.       99    
                                                                                -----
Total portfolio                                                                 5,015 

Notes:
(1) In thousands of square feet
(2) Under development

Private placement of trust units

Concurrently with the closing of the acquisition, Cominar has completed a private placement with Ivanhoe Cambridge, pursuant to which Ivanhoe Cambridge has purchased 13,158,000 trust units at $19 per trust unit for gross proceeds to Cominar of $250-million.

Ivanhoe Cambridge beneficially owns, or exercises control or direction over, directly or indirectly, an aggregate of 13,158,000 trust units of Cominar, representing approximately 8.4 per cent of the issued and outstanding trust units. Ivanhoe Cambridge has also agreed not to sell any trust units of Cominar it holds for a period of nine months from the closing of the acquisition, at which time 50 per cent of such trust units will cease to be subject to these restrictions, with the remaining trust units also ceasing to be subject to these restrictions 12 months from the closing of the acquisition. Ivanhoe Cambridge will also be invited to put forward a candidate for election on the board of trustees of Cominar, subject to the approval of the nominating and governance committee of Cominar. This will enable Ivanhoe Cambridge to contribute more readily to Cominar's future growth.

Financing of the acquisition

The purchase price of the acquisition, together with the transaction expenses, were financed through (i) a new 10-year hypothecary loan of $250-million provided by Otera Capital, the commercial real estate financing subsidiary of the Caisse, on Galeries Rive-Nord and Les Rivieres; (ii) the Ivanhoe Cambridge private placement; and (iii) the balance from Cominar's unsecured revolving credit facility and cash on hand.

Pro forma leverage

Following closing of the acquisition and the Ivanhoe Cambridge private placement, Cominar has a debt to gross book value ratio of approximately 55.3 per cent (approximately 53.0 per cent excluding convertible debentures). Cominar's long-term target leverage remains at approximately 50 per cent.

Cominar's unencumbered assets increased to more than $3.2-billion representing approximately 157 per cent of the principal amount of senior unsecured indebtedness outstanding following the closing of the acquisition and the Ivanhoe Cambridge private placement.

We seek Safe Harbor.

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