HALIFAX, NS,
Nov. 15, 2012 /CNW/ - Summit
Industrial Income REIT ("Summit II" or the "REIT") (TSXV: SMU.UN)
announced today its operating and financial results for the nine
months ended September 30, 2012.
Effective October 3, 2012 the REIT
changed its name from Proventure Income Fund ("Proventure").
HIGHLIGHTS:
- Acquired four light industrial properties during and subsequent
to third quarter aggregating 507,997 square feet of gross leasable
area for total costs of approximately $50.1
million
- Issued 74.9 million units in third quarter on a private
placement basis for total net proceeds of $30.75 million
- Arranged a $32 million revolving
credit facility
"We are very pleased with the progress made in
starting to build the REIT's portfolio and establish its presence
in the Canadian light industrial real estate business," commented
Lou Maroun, Chairman. "Looking
ahead, we will aggressively and accretively grow our property
portfolio, capitalizing on the significant and proven expertise of
our management team."
"We are executing a three-part strategy aimed at
building substantial value for our unitholders," stated
Paul Dykeman, CEO. "First, we will
acquire properties at values at or below replacement cost that
generate stable, consistent and increasing cash flows as we capture
operating synergies and economies of scale through growth in our
portfolio. Second, over time we will maximize all development and
expansion opportunities on our existing properties to enhance
returns. Third, we will prudently finance and undertake development
projects with independent third parties to build properties
designed to our exacting standards. Our team has proven successful
in building value through this focused strategy in the past, and we
are confident Summit II provides the vehicle for us to do it
again."
FINANCIAL RESULTS:
Net income for the nine months ended
September 30, 2012 was $0.863 million compared to $1.55 million in the prior year.
Revenue, operating expenses and net operating
income for the nine months ended September
30, 2012 were lower than the prior year due to the sale of
14 non-core properties on January 5,
2012. The light industrial properties acquired on
September 27, 2012 had minimal impact
on the results for the period.
The reduction in Funds from Operations ("FFO")
for the nine months ended September 30,
2012 was due to the smaller size of the portfolio compared
to the prior year.
Cash distributions were $13.346 million in 2012 compared to $383,000 in the prior year. On January 23, 2012 a special distribution was paid
from the proceeds of the above-mentioned property sale. The REIT
did not pay any further distributions during the nine-month period
ended September 30, 2012. Currently
management's view is that the REIT intends to start distributions
when the REIT has reached a minimum of $200
million in income producing properties or no later than
sometime in 2013.
On September 27,
2012 the REIT closed a debt financing of $28.8 million secured by three properties.
Subsequent to September 30, 2012 a
fourth property was added to the facility, which increased the
credit limit to $32 million. As of
September 30, 2012 $17.0 million was drawn on the loan.
At September 30,
2012, the REIT's debt leverage ratio was 40.7%, down from
52.1% at December 31, 2011 due
primarily to equity offerings completed during 2012. If the REIT
increased its borrowing to the 65% maximum allowed under its
Declaration of Trust, it would have the capacity to purchase
approximately $43 million in new
properties as at September 30,
2012.
About Summit II
Summit Industrial Income REIT is an open‐ended mutual fund trust
focused on growing and managing a portfolio of light industrial
properties across Canada. Summit
II's units are listed on the TSX Venture Exchange and trade under
the symbol SMU.UN.
Caution Regarding Forward Looking Information
This news release contains forward-looking
statements and forward-looking information within the meaning of
applicable securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "objective", "ongoing",
"may", "will", "project", "should", "believe", "plans", "intends",
"goal" and similar expressions are intended to identify
forward-looking information or statements. More particularly and
without limitation, this news release contains forward looking
statements and information concerning the goal to build Summit II's
property portfolio and the start of distributions. The
forward-looking statements and information are based on certain key
expectations and assumptions made by Summit II, including general
economic conditions. Although Summit II believes that the
expectations and assumptions on which such forward-looking
statements and information are based are reasonable, undue reliance
should not be placed on the forward looking statements and
information because Summit II can give no assurance that they will
prove to be correct. By its nature, such forward-looking
information is subject to various risks and uncertainties, which
could cause the actual results and expectations to differ
materially from the anticipated results or expectations expressed.
These risks and uncertainties include, but are not limited to,
tenant risks, current economic environment, environmental matters,
general insured and uninsured risks and Summit II being unable to
obtain any required financing and approvals. Readers are cautioned
not to place undue reliance on this forward-looking information,
which is given as of the date hereof, and to not use such forward
looking information for anything other than its intended purpose.
Summit II undertake no obligation to update publicly or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, except as required by
law.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE Summit Industrial Income REIT