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Press Release

GT Canada Medical Properties REIT (TSX-V: MOB.UN) Announces First Quarter 2012 Financial Results

Canada NewsWire

TORONTO, May 28, 2012 /CNW/ - GT Canada Medical Properties Real Estate Investment Trust (the "REIT") is pleased to announce its financial results for the three month period ended March 31, 2012.

Financial Results

Net Income

  • Net income for the three months ended March 31, 2012 decreased to $1,537,830 or $0.099 per unit from $4,759,477 or $0.307 per unit for the three months ended March 31, 2011. Net income includes fair value gains for the three months ended 31 March 2012 of $1,686,574 and $4,479,538 for the corresponding period in 2011.

  • Net operating income increased to $1,291,973 for the three months ended March 31, 2012 from $863,615 for the three months ended March 31, 2011.  The improvement in net operating income reflects the addition of 5 properties from September 2011 through January 2012

Funds From Operations

The REIT's Funds From Operations ("FFO") represents the recurring cash flow generated through the ownership of income producing properties. The primary difference between net income and FFO is the fair value gain on investment properties and other fair value gains.

  • For the three months ended March 31, 2012 FFO was negative ($138,606) or ($0.009) per unit compared to FFO of $290,104 or $0.019 per unit for the same period in 2011.

  • The improvement in net operating income as a result of the five properties acquired from September 2011 through January 2012 was offset by the Strategic Transaction costs incurred in the period of $373,000 associated with the Offer to acquire the REIT's units described in the Subsequent Events below.

Highlights

Completed Acquisition

On January 6, 2012, the REIT acquired a portfolio of three medical office buildings located in Lindsay, Hamilton and St. Thomas, Ontario (the "Portfolio).  The Portfolio was acquired for approximately $10.6 million subject to customary closing adjustments.  Approximately $7.8 million of the purchase price was comprised of a combination of assumed mortgage debt on the Portfolio and coterminous vendor take back financing with a combined average interest rate of 4.09%.  The balance of the purchase price was funded with existing resources.

Subsequent Events

Offer to Acquire from NorthWest Value Partners Inc.

On April 16, 2012, the REIT announced that it had entered into a definitive agreement with NorthWest Value Partners Inc. ("NorthWest") pursuant to which NorthWest will acquire all of the REIT's outstanding units for $2.05 per unit (the "Offer").  The Offer price is subject to adjustment for dilution that may result from the issuance of additional units pursuant to the Rights Offering noted below. The Offer is subject to a number of conditions, including acceptance of the Offer by the holders of at least 66 2/3% of the outstanding units on a fully diluted basis (the "Minimun Tender Condition"). As a result of the issuance of the Rights Offering, NorthWest confirmed that it will adjust the price at which it is offering to acquire all of the REIT's outstanding units from $2.05 per unit to $1.87 per unit.

Rights Offering

On April 24, 2012, the REIT completed its' previously announced  offering of rights (the "Rights Offering") to acquire up to 3,880,212 units of the REIT to unitholders of record on March 30, 2012 at a price of $1.15 per unit. Pursuant to the Rights Offering, the REIT issued a total of 3,880,212 units of the REIT for net proceeds of $4,322,244.

Acquisition of additional property

On May 1, 2012, the REIT completed the acquisition of a 25,000 square foot medical office building in Port Hope, Ontario for approximately $7.5 million, subject to customary closing adjustments.  The building's tenants are medical practitioners with a pharmacy, lab and x-ray facilities and it is 100% occupied.

NorthWest Extends Offer Period

On May 25, 2012, NorthWest announced (i) that approximately 86% of the issued and outstanding units and approximately 65% of the fully diluted units of the REIT had been tendered to the Offer; (ii) its intention to extend the Offer for 10 days to June 4, 2012; and (iii) it intends to waive the Minimum Tender Condition on or before June 4, 2012 if required, in order to take-up units tendered to the Offer.

2012 First Quarter Financial Results

For the REIT's complete year first quarter 2012 Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis ("MD&A"), please visit www.sedar.com

GT Canada Medical Properties REIT

As Canada's only publicly traded issuer focused exclusively on medical office buildings, GT Canada Medical Properties Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT's objectives are to: (i) provide its unitholders with stable and growing cash distributions from investments focused on medical office buildings, on a tax efficient basis; (ii) enhance the value of the REIT's assets and maximize long-term unit value; and (iii) expand the asset base of the REIT.

Some financial measures used in this press release, such as FFO, are used by the real estate industry to measure and compare the operating performance of real estate companies, but they do not have any standardized meaning prescribed by IFRS. As such, they are unlikely to be comparable to similar measures presented by other real estate companies.  These non-IFRS measures are more fully defined and discussed in the REIT's MD&A for the first quarter of 2012, which is available on the SEDAR website at www.sedar.com

This press release contains forward-looking statements. Forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements may include, among other things, statements related to acquisitions; development and capital expenditure activities; future maintenance and leasing expenditures; financing; the availability of financing sources; and income taxes. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulations and the factors described under "Risk Factors" in the REIT's MD&A, which is available on www.sedar.com.  These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf.  Unless otherwise stated, all forward-looking statements speak only as of the date of this press release, and, except as expressly required by applicable law, the REIT assumes no obligation to update such statements.

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