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