Annual General Meeting timing
- Completion of a successful $50 million IPO
- $2.68 million in rental revenues earned
- Distributable cash estimated at $0.0708 per unit for 2006
TORONTO, March 9 /CNW/ - Scott's Real Estate Investment Trust
(TSX: SRQ.UN) ("Scott's REIT" or the "REIT"), owner of 190 quick-service
restaurant properties in seven provinces across Canada, announced today its
financial results for its operations for the 87-day period from October 6,
2005 to December 31, 2005.
In 2005, Scott's REIT reported distributable income of $1.45 million or
$0.20 per unit and paid an initial cash distribution of $0.1302 per unit in
December for November and part of October. There are no prior comparable
periods. The REIT estimates monthly cash distributions of $0.0708 per unit in
the next 12 months. During 2006, distributions of $0.0708 per unit have been
paid for December 2005 and January, and declared for February and March.
"Since we began operations in 2005, the REIT has met our expectations,"
said John I. Bitove, Chairman and Chief Executive Officer of Scott's REIT.
"Our goal to become the premier small-box retail property owner in Canada is
attainable and we are on target to achieve it."
The REIT funds its operations primarily through rental income generated
from its properties. All leases are "quadruple-net," with tenants required to
pay all capital expenditures. The leases are also long term, lasting
approximately 13 years with no costs for lease renewals and attractive annual
rent-escalation clauses starting in 2006. Rental revenue for the period was
$2.68 million and net income before non-controlling interest was $437,000. Net
income was $0.06 per unit and the REIT incurred $2.24 million in expenses,
which include depreciation and amortization, interest and operating expenses,
and general and administrative expenses.
"We are Canada's largest quadruple-net landlord, with a unique asset
base," added Mr. Bitove. "Our growth strategy is to double our asset value in
the next five years through purchasing small-box retail locations in
attractive Canadian markets. The REIT also possesses contractual rights to
purchase properties developed by Obelysk Inc."
On October 6, 2005, Scott's REIT completed its $50 million initial public
offering (IPO) and started trading on the Toronto Stock Exchange under the
symbol SRQ.UN. "At the time of our IPO, the political climate was very
uncertain and a shadow was cast over the future of income trusts," Bitove
added. "But we persisted and were among the few IPOs of significant size to be
funded at that time."
The funds raised in the public market, when paired with a $65-million
credit facility, allowed the REIT to acquire 190 retail properties from
Obelysk Inc. (formerly Scott's Restaurants Inc.) and Yum! Brands Canada
Management LP (Yum!) for approximately $137 million.
Of these properties, 189 are currently leased to KIT LP, which operates a
total of 479 KFC(TM) restaurants and KFC(TM) restaurants multi-branded with a
Pizza Hut(TM), Taco Bell(TM) or Long John Silver's(TM). The other is leased by
Yum!, which operates a Pizza Hut(TM) on the property.
Annual General Meeting on April 25, 2006
Scott's REIT will hold its Annual General Meeting on April 25, 2006 at
10 a.m. (ET) at The Second City, 51 Mercer Street, Toronto, ON M5V 9G9.
About Scott's Real Estate Investment Trust
Scott's REIT (TSX: SRQ.UN) has a 68.9 per cent interest in Scott's Real
Estate LP, which owns more than 190 quadruple-net leased commercial properties
in seven provinces across Canada. Our goal is to become Canada's premier
small-box retail property owner.
Scott's REIT's units are traded on the Toronto Stock Exchange under the
symbol SRQ.UN. To find out more about Scott's REIT, visit our website at
Any forward-looking statements in this document are based on current
expectations that are subject to significant risks and uncertainties that are
difficult to predict. Actual results might differ materially from projections
suggested in any forward-looking statements due to factors such as the
competitive nature of the quick service restaurant, retail and real estate
industries, concentration of tenants, the ability of Scott's REIT and Scott's
LP to execute a growth and development strategy, the reliance of Scott's REIT
and Scott's LP on key personnel, and risk associated with the structure of
income trusts. Scott's REIT and Scott's LP assume no obligation to update the
forward-looking statements, or to update the reasons why actual results could
differ from those reflected in the forward-looking statements.
The financial information contained in this news release is unaudited,
unless otherwise noted.
Additional information identifying risks and uncertainties are contained
in Scott's filings with the Canadian securities regulators, available at
For further information: Richard Rotman, Wilcox Group, (416) 203-6666,
CO: Scott's Real Estate Investment Trust
NI: ERN MED REL
-0- Mar/09/2006 13:30 GMT
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