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Press release from Marketwire

Calloway REIT Announces Acquisition of Four New Walmart-Anchored Centres in Ontario

Thursday, August 01, 2013

Calloway REIT Announces Acquisition of Four New Walmart-Anchored Centres in Ontario

09:00 EDT Thursday, August 01, 2013

TORONTO, ONTARIO--(Marketwired - Aug. 1, 2013) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES

Calloway Real Estate Investment Trust (TSX:CWT.UN) (Calloway) announced today that following a bidding process led by an independent third party broker on behalf of a joint venture between Walmart Canada Realty Inc. and SmartCentres Realty Inc., "the Sellers" Calloway was the successful bidder on four shopping centres. Accordingly, after review and approval by the Independent Trustees of Calloway, Calloway has a binding purchase agreement to acquire four Walmart-anchored shopping centres, located in Ottawa, Kanata, Niagara Falls, and Port Perry, Ontario for a total initial consideration of approximately $231.5 million. These properties currently comprise approximately 820,000 sq. ft. of leasable area, with the potential to add approximately an additional 260,000 sq. ft. in the future through earn outs. Notably, the Ottawa property is a mixed-use retail/office complex with a prominent North American consulting engineering firm (listed on the TSX and NYSE) as the major long-term tenant in the 5-storey office tower that is in process of receiving its LEED Silver certification. Calloway is currently in negotiations with a third party partner with respect to taking a 50% ownership interest in the Ottawa property, for an estimated consideration of $50.5 million.

All four shopping centres are anchored by a Walmart Supercentre and are very well positioned in their respective market. The currently developed portions of the shopping centres are 100% occupied, with national tenants accounting for 97% of in-place tenants. The weighted average remaining lease term is 15.5 years, which compares favorably to the weighted average remaining lease term in our existing portfolio of 7.5 years.

The transaction is expected to be immediately accretive to Calloway's AFFO when it closes during the third quarter of 2013. The properties will be funded by a combination of the proceeds of Calloway's previously announced $150 million Series J senior unsecured debenture offering which is expected to close in early August, existing financing facilities and the potential issuance of Calloway Limited Partnership units.

"We are delighted to be adding these high quality, national tenant dominated shopping centres to Calloway's existing strong portfolio of open format shopping centres," said Huw Thomas, Calloway's President and CEO. "In addition to our stable core business, we have a healthy growth agenda based on internal development programs and earn outs, strategic acquisitions, our joint venture with Simon Property Group, for which our first Premium Outlets centre will open today, and the long term high density mixed-use development of the Vaughan Metropolitan Centre with SmartCentres," added Thomas.

The Ottawa mixed-use centre is located at the northeast corner of Clyde Avenue and Baseline Road in an established urban market surrounded by a mix of low and medium-density residential dwellings. The centre is currently approximately 246,000 square feet including a newly built Walmart Supercentre and a 5-storey 100,000 square foot office tower that is 75% occupied with a major tenant. Leases for the remaining office space will be arranged by the sellers on an earn-out basis. Upon completion, the centre will comprise approximately 300,000 square feet of office and retail space.

The Kanata centre is located southwest of the Ottawa city centre along Terry Fox Drive with considerable new residential development in the area. This Walmart-anchored centre comprises 190,000 square feet of retail space and includes strong retailers such as Dollarama, CIBC and RBC branches. Approximately 20,000 square feet of additional retail is planned for future development.

The Niagara Falls centre is located off of the QEW at the McLeod Road exit in a strong retail node in close proximity to the city centre. The centre currently comprises 250,000 square feet of retail anchored by a Walmart Supercentre and other key tenancies including LCBO and Dollarama. The property can accommodate a further 130,000 square feet of future retail uses.

The Port Perry centre, located northeast of Toronto and well-situated on Highway 7A, is in an underserved market and provides a convenient shopping destination for residents and the surrounding communities. Totaling 190,000 square feet upon completion, the property is currently comprised of 130,000 square feet of strong retail tenants including Walmart, Dollarama, LCBO, Mark's and Scotiabank.

The sellers will have the right to develop the undeveloped square footage referred to above on an earn-out basis.

This press release contains "forward looking statements" subject to various significant risks and uncertainties which may cause actual results, performances or achievements of Calloway to be materially different from any future results, performances or achievements expressed or implied by such forward looking statements. Such risk factors include, but are not limited to, risks associated with real property ownership, closing on the acquisitions, entering into a joint venture agreement in respect of the acquisitions, availability of cash flow, restrictions on redemption, general uninsured losses, future property acquisitions, environmental matters, tax related matters, debt financing, Unitholder liability, potential conflicts of interest, potential dilution, and reliance on key personnel. Calloway cannot assure investors that the transactions referred to herein will close or that actual results will be consistent with these forward looking statements and Calloway assumes no obligation to update or revise them to reflect new events or circumstances.

About Calloway

Calloway is one of Canada's largest real estate investment trusts with total assets of approximately $7 billion on completion of this transaction. Including the above noted acquisition, it will own and manage approximately 27 million square feet in 121 value-oriented retail centres having the strongest national and regional retailers, as well as strong neighbourhood merchants. Calloway's vision is to provide a value-oriented shopping experience to Canadian consumers. For more information on Calloway, visit www.callowayreit.com.

FOR FURTHER INFORMATION PLEASE CONTACT:

Contact Information:
Calloway Real Estate Investment Trust
Huw Thomas
President and Chief Executive Officer
(905) 326-6400 x7649
www.callowayreit.com

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