Primaris to commence trading independently
on January 5, 2022
TORONTO, Jan. 4, 2022 /CNW/ - H&R Real Estate
Investment Trust ("H&R") (TSX: HR.UN) and Primaris Real Estate
Investment Trust ("Primaris") (TSX: PMZ.UN) jointly announced today
that the internal reorganization of H&R pursuant to which
H&R's enclosed shopping mall business and certain other assets
were spun-out to Primaris was completed on December 31, 2021. The transaction was
implemented by way of a statutory plan of arrangement (the
"Arrangement") and H&R unitholders received one unit of
Primaris for every four units of H&R held immediately prior to
closing of the Arrangement.
"We are pleased to reach this significant milestone in the
strategic repositioning of H&R REIT, which is a product of the
considerable time and effort of management and the board in
consulting with investors, evaluating strategic options, and
executing several significant strategic transactions," said
Tom Hofstedter, President & CEO
of H&R REIT. "H&R REIT enters 2022 with a more focused
portfolio, clear strategic direction, and the resources to create
and surface value for unitholders."
"With the support and careful consideration of H&R REIT,
Primaris REIT today begins a new phase of its evolution, extremely
well positioned as an independent Canadian REIT," said Alex Avery, Chief Executive Officer of Primaris
REIT. "The entire Primaris team extends a sincere note of
appreciation to Tom, the board of H&R REIT, and to unitholders,
for the support and patience required to complete the strategic
repositioning and spin-off."
H&R contributed 27 properties with an appraised value of
approximately $2.4 billion. The
properties were secured with debt totalling approximately
$723 million. Such appraised value,
net of debt, equates to a net asset value of the Primaris spin-out
of $5.57 per H&R unit before any
working capital adjustments, which will be finalized with the
reporting of 2021 results.
Immediately following the Arrangement, Primaris acquired from
the Healthcare of Ontario Pension Plan ("HOOPP") an additional
portfolio of eight properties (the "HOOPP Transaction") with an
appraised value of $0.8 billion. As a
result of the Arrangement and the HOOPP Transaction, Primaris now
owns interests in 35 properties with an appraised value of
approximately $3.2 billion as at
September 30, 2021, encompassing 11.4
million square feet of gross leasable area. Including debt owing to
HOOPP pursuant to the HOOPP Transaction, Primaris has approximately
$930 million of debt outstanding.
Pursuant to the Arrangement and the HOOPP Transaction, an
aggregate of approximately 98.25 million units of Primaris were
issued. Primaris also issued approximately 3.34 million
exchangeable units. These exchangeable units are exchangeable into
Primaris units at any time and are entitled to receive the same
amount of distributions as a regular unit of Primaris. The combined
number of units issued amounts to approximately 101.6 million units
with H&R unitholders receiving approximately 74% and HOOPP
receiving approximately 26% of Primaris' units.
The Arrangement forms part of H&R's previously announced
strategic repositioning plan to transform from a diversified REIT
into a simplified, growth-oriented REIT with increased
multi-residential and industrial exposure, surfacing value through
a significant development pipeline. In addition, as a result of the
Arrangement, H&R's secured debt has been reduced by
approximately $580 million for the
outstanding mortgage balances on the Primaris properties.
As a result of the Arrangement and the HOOPP Transaction,
Primaris, led by Alex Avery as Chief
Executive Officer, Patrick Sullivan
as President and Chief Operating Officer and Rags Davloor as Chief
Financial Officer, has been established as one of the four largest
enclosed shopping centre platforms in Canada, with a fully-internalized management
platform and a strong independent board of trustees.
Trading in H&R's units will continue on a "due bill" basis
through the close of trading on January 4,
2022. H&R unitholders who sell their H&R units prior
to the close of trading on January 4,
2022 will be selling their units together with the Primaris
units received pursuant to the Arrangement. At the start of trading
on January 5, 2022, units of H&R
will trade on an "ex-distribution" basis and the units of H&R
will resume regular trading without any "due bill" entitlement,
reflecting that the Arrangement has been completed and that the
Primaris units will no longer trade together with the H&R
units.
At the start of trading on January 5,
2022, units of Primaris will commence trading on the TSX on
a regular-way basis under the ticker "PMZ.UN".
About H&R REIT
H&R REIT is one of Canada's
largest real estate investment trusts with total post-Primaris
spin-off pro forma assets of approximately $10.7 billion as at September 30, 2021. H&R REIT has ownership
interests in a North American portfolio comprised primarily of
high-quality office, industrial and residential properties
comprising over 29.4 million square feet post-Primaris spin off.
H&R is currently undergoing a five-year, strategic
repositioning to transform into a simplified, growth-oriented
company focusing on multi-residential and industrial properties to
surface significant value for unitholders.
About Primaris REIT
Primaris REIT is Canada's only
enclosed shopping centre focused REIT. Primaris REIT owns interests
in primarily enclosed shopping centres aggregating 11.4 million
square feet and valued at approximately $3.2
billion at Primaris REIT's share. Primaris REIT is fully
independent, with a differentiated low-leverage financial profile
and a fully internal, vertically integrated, at scale management
platform.
Forward-looking Statements
Certain statements in this news release contain forward-looking
statements within the meaning of applicable securities laws (also
known as forward-looking statements). These forward-looking
statements include, but are not limited to, H&R's and Primaris'
respective plans, objectives, expectations and intentions,
including the execution of further strategic transactions by
H&R and H&R's ability to surface value for unitholders of
H&R. Such forward-looking statements reflect H&R's and
Primaris' respective current beliefs and are based on information
currently available to management of H&R and Primaris. These
statements are not guarantees of future performance or events and
are based on H&R's and Primaris' estimates and assumptions that
are subject to risks and uncertainties, including those set forth
in H&R's management information circular dated November 5, 2021 and in H&R's and Primaris'
materials filed with the Canadian securities regulatory authorities
from time to time, which could cause the actual results and
performance of H&R or Primaris to differ materially from the
forward-looking statements contained in this news release. Although
the forward-looking statements contained in this news release are
based upon what H&R and Primaris respectively believe are
reasonable assumptions, there can be no assurance that actual
results will be consistent with these forward-looking statements.
All forward-looking statements in this news release are qualified
by these cautionary statements. These forward-looking statements
are made as of today and neither H&R nor Primaris, except as
required by applicable law, assume any obligation to update or
revise them to reflect new information or the occurrence of future
events or circumstances.
SOURCE H&R Real Estate Investment Trust