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Press release from Marketwire

Calloway REIT Announces Closing of Purchase of Four Large Scale Walmart SuperCentre Anchored Centres and introduces a New Partner to the REIT

Thursday, September 05, 2013

Calloway REIT Announces Closing of Purchase of Four Large Scale Walmart SuperCentre Anchored Centres and introduces a New Partner to the REIT

14:49 EDT Thursday, September 05, 2013

TORONTO, ONTARIO--(Marketwired - Sept. 5, 2013) -

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

Calloway Real Estate Investment Trust (TSX:CWT.UN) announced today that it had closed the previously announced acquisition of four new, unenclosed, large-scale, Walmart SuperCentre anchored shopping centres which includes a mixed-use 5-storey office tower in Ottawa, totalling 820,000 square feet of leasable area, for a gross purchase price of approximately $231.5 million, including transaction costs. Of this purchase price, $181 million was paid by Calloway for full ownership of the properties in Kanata, Niagara Falls and Port Perry, and a 50% interest in the Ottawa property. The remaining 50% interest in the Ottawa property was purchased by I.G. Investment Management Ltd. as trustee for Investors Real Property Fund, a mutual fund distributed by Investors Group, a member of the IGM Financial Inc. (TSX:IGM) group of companies. IGM is one of Canada's premier financial services companies with approximately $125 billion in total assets under management as of August 31, 2013.

These four properties increase Calloway's total assets to over $7 billion and add to Calloway's existing portfolio of 117 properties, of which, 95 in total are now anchored by Walmart. The currently developed portions of the properties are 100% occupied, with national tenants accounting for 97% of in-place tenants. Alongside Walmart, other national retailers operating in these four centres include Dollarama, Mark's, Children's Place, and national banks. The Ottawa office property is principally occupied by Stantec, a prominent North American consulting firm. The weighted average remaining lease term of the centres is 15.5 years, which compares very favourably to the weighted average remaining lease term of the existing portfolio, which is 7.5 years.

"The addition of these four Walmart SuperCentre anchored properties is consistent with our strategy of creating a balance of stability of income from our core business with a renewed focus on growth," noted Huw Thomas, President & CEO of Calloway REIT. "We are delighted to be partnering with Investors Real Property Fund, who have a history of providing predictable and stable returns to its unit holders through investments in real estate," added Thomas. "Partnering with one of Canada's largest Real Estate Investment Trusts and certainly the dominant player in open format shopping centres, will give Investors Real Property Fund additional opportunities to grow its real estate portfolio with these types of properties," added Graham Zakaluk, Vice President, Portfolio Manager for IG.

Calloway financed its share of the transaction, principally through the issuance of $150 million of Series J unsecured debentures, with a coupon of 3.385%, maturing on December 1, 2017. The balance of the purchase price was satisfied with the issuance of 397,000 units of a subsidiary limited partnership at $25.72, ("the LP units") exchangeable into Calloway REIT units on a one-for-one basis, representing approximately $10.2 million of the purchase price and the balance from cash resources. The LP units were issued to Mr. Mitchell Goldhar, owner of a 21% interest in Calloway and owner of SmartCentres.

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, 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 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.

About Investors Group

Investors Group, founded in 1926, is a national leader in delivering personalized financial solutions to Canadians through a network of approximately 4,500 Consultants located throughout Canada. In addition to an exclusive family of mutual funds and other investment vehicles, Investors Group offers a wide range of insurance, securities, mortgage and other financial services. Investors Real Property Fund is an open-ended mutual fund established by Investors Group in 1983 that invests in a diversified portfolio of income-producing real properties with net assets under management of over $4.3 billion.

FOR FURTHER INFORMATION PLEASE CONTACT:

Contact Information:
Calloway Real Estate Investment Trust
Huw Thomas
President and Chief Executive Officer
(905) 326-6400 ext. 7649
(905) 326-0783 (FAX)
www.callowayreit.com

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