- Agreements signed for first two acquisitions, subject to due diligence
- Distributable income of $1.57 million
- $2.87 million revenues earned
- Distributable cash estimated at $0.0708 per unit for 2006
TORONTO, May 10 /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 the first quarter ended March 31, 2006. There are no prior
comparable periods as the REIT's inception occurred on October 6, 2005.
Scott's reported distributable income of $1.57 million or $0.216 per unit
during the quarter. The REIT estimates monthly cash distributions of $0.0708
per unit for the balance of the year. During the first quarter 2006,
distributions of $0.0708 per unit have been paid for January through April and
have been declared for May. Revenue for the period was $2.87 million and net
income before non-controlling interest was $501,000. Net income was $0.07 per
unit and the REIT incurred $2.37 million in expenses, which include
depreciation and amortization, interest and operating expenses, and general
and administrative expenses.
"In the first quarter, many of Scott's REIT's financial performance
measures have met our initial projections," said John I. Bitove, Chairman and
Chief Executive Officer of Scott's REIT. "Revenue, net earnings, distributable
income and earnings per unit are all higher than initial pro-rated forecasts
in our prospectus."
During the quarter, the REIT began its small-box retail and restaurant
property acquisition program by signing two agreements, subject to due
diligence and other customary closing conditions, for its first acquisitions
since inception. The target properties are located in the Toronto and Montreal
"The two acquisition agreements are an important first step in what
promises to be an exciting element of our growth and development," said
Bitove. "They were brought to the REIT's attention by a third party and
neither is exclusively leased to Scott's current brands or tenants. The
potential acquisitions demonstrate our dedication to becoming Canada's premier
restaurant and small-box retail property owner."
Both acquisitions are expected to be completed in the third quarter and
are subject to management review, due diligence and Board of Directors'
approval and other customary conditions for closing being satisfied.
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 expenses. 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.
"We are pleased to commence our growth strategy with two attractive
acquisition opportunities," added Bitove. "We hope to double our asset value
over the next five years, with a disciplined approach, targeting only
properties that meet our investment acquisition criteria."
About Scott's Real Estate Investment Trust
Scott's REIT's (TSX: SRQ.UN) goal is to become Canada's premier small-box
retail property owner. The REIT 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. The REIT also possesses contractual rights
to purchase properties developed by Obelysk Inc.
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, ext.
CO: Scott's Real Estate Investment Trust
NI: ERN REL
-0- May/10/2006 12:16 GMT
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