Prospectus of CT Real Estate Investment Trust
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No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. These securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the ‘‘U.S. Securities Act’’) or the securities laws of any state of the United States and, subject to certain exceptions, may not be offered, sold or delivered, directly or indirectly, in the United States or to, or for the account or benefit of, a U.S. person unless registered under the U.S. Securities Act and applicable state securities laws or except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws in accordance with the Underwriting Agreement (as defined herein). This prospectus does not constitute an offer to sell or solicitation of an offer to buy any of these securities in the United States. See ‘‘Plan of Distribution’’. PROSPECTUS Initial Public Offering October 10, 2013 6SEP201314471048 CT REAL ESTATE INVESTMENT TRUST $263,500,000 26,350,000 Units This prospectus qualifies the distribution to the public (the ‘‘Offering’’) of 26,350,000 units (the ‘‘Units’’) of CT Real Estate Investment Trust↩ (the ‘‘REIT’’), an unincorporated, closed-end real estate investment trust established under, and governed by, the laws of the Province of Ontario, at a price of $10.00 per Unit (the ‘‘Offering Price’’). Canadian Tire Corporation, Limited (together with its Subsidiaries, unless the context otherwise requires, ‘‘CTC’’) has taken the initiative in establishing the REIT in order to create an investment grade public real estate entity that will benefit from its relationship with CTC to generate reliable, durable and growing monthly cash distributions on a tax-efficient basis. The REIT was formed to own income producing commercial properties primarily located in Canada. Concurrently with the completion of the Offering and related transactions (the ‘‘Closing’’), the REIT will indirectly acquire, through CT REIT Limited Partnership (the ‘‘Partnership’’), a portfolio of 256 properties totaling approximately 19 million square feet of gross leasable area (‘‘GLA’’), consisting of 255 retail properties across Canada and one distribution centre (collectively, the ‘‘Initial Properties’’). The retail properties will be made up of 229 properties with a stand-alone retail store operating under the Canadian Tire↧ name and trademark (‘‘Canadian Tire Retail’’) and 26 properties anchored by a Canadian Tire Retail store and containing one or more stores operating under other CTC names and trademarks (each, including Canadian Tire Retail, a ‘‘CTC Banner’’) and/or third-party tenants. All of the Initial Properties are currently directly or indirectly owned by CTC (including six long-term ground leases) and represent approximately 72% of its owned real estate portfolio (measured by square feet). CTC will be the REIT’s most significant tenant for the foreseeable future with Canadian Tire Retail stores and the distribution centre (which supports Canadian Tire Retail operations) representing approximately 95.7% of the REIT’s base minimum rent during the Forecast Period (as defined below), or approximately 97.4% of the REIT’s base minimum rent if all CTC Banner stores are included. On Closing, the REIT will enter into leases with CTC in respect of Canadian Tire Retail stores with staggered initial terms ranging from 10 to 21 years, with a weighted average initial term of approximately 16 years, and the REIT and CTC will enter into a lease in respect of the distribution centre with an initial term of 17 years. See ‘‘Acquisition of the Initial Properties’’ and ‘‘Assets of the REIT’’. CTC has been in business for over 90 years, now offering a range of products and services to Canadians through a family of businesses including: (i) Canadian Tire Retail, one of Canada’s most shopped general merchandise retailers, with stores that are easily identified by the Canadian Tire name and trade-mark, which has established a strong reputation and high recognition throughout the communities it serves; (ii) Canadian Tire Petroleum↧, one of Canada’s largest independent retailers of gasoline; (iii) FGL Sports↧, the largest sporting goods retailer in Canada, selling footwear, sports equipment and apparel through retail businesses that include Sport Chek↧ and Sports Experts↧; (iv) Mark’s↩, one of the largest specialty apparel retailers in Canada, offering casual and industrial clothing and footwear to men and women for work and leisure, operating under the name ‘‘L’Equipeur´ ↧’’ in Quebec; and (v) Canadian Tire Financial Services↧, which markets financial and other products and services including credit cards, in-store financing, product warranties, retail deposits and home services. CTC licenses its Associate Dealers (as defined below) to operate 491 Canadian Tire Retail stores and a total of 1,184 stores are operated under various other CTC Banners. CTC’s outstanding Common Shares and Class A Non-Voting Shares are listed on the Toronto Stock Exchange (the ‘‘TSX’’) and are traded under the symbols ‘‘CTC’’ and ‘‘CTC.a’’, respectively. CTC had a market capitalization of approximately $7.6 billion as of the date of this prospectus and 2012 annual revenues of more than $11.4 billion. CTC has had an investment grade corporate debt credit rating from each of DBRS Limited (‘‘DBRS’’) and Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. (‘‘S&P’’) for over 20 years. (continued on next page) IRREPLACEABLE NATIONAL REAL ESTATE PORTFOLIO EscalatinG LONG-TERM LEASES WITH INVESTMENT GRADE TENANT Vancouver, British Columbia IRREPLACEABLE NATIONAL PORTFOLIO DIVERSIFIED BY GEOGRAPHY YUKON % OF FORECAST BASE MINIMUM RENT* 1 NortHWEST TERRITORIES PROPERTIES 8% ATLANTIC 0.1M SQ. FT. 18% 1 SMALL 256 PROPERTIES <19,999 21% 65K SQ. FT. PROPERTIES QUEBEC % 14% 43 MEDIUM ONTARIO 20,000 – 99,000 BRITISH COLUMBIA 68% NEWFOUNDLAND LARGE URBAN Bowmanville, Ontario >100,000 Pembroke, Ontario % MANITOBA 28 QUEBEC WESTERN 6 20 ALBERTA PROPERTIES PROPERTIES 1.4M SQ. FT. 6 0.3M SQ. FT. >100,000 PROPERTIES 52 ONTARIO LARGE URBAN 32 0.4M SQ. FT. PROPERTIES 20,000 – 99,000 WESTERN PROPERTIES MEDIUM 5.4M SQ. FT. QUEBEC 2.0M SQ. FT. SMALLSaskatc <19,999HEWAN ATLANTIC ONTARIO NEW BRUNSWICK PRINCE EDWARD ISLAND DIVERSIFIED BY MARKET SIZE 8 % OF FORECAST BASE MINIMUM RENT* PROPERTIES 103 0.5M SQ. FT. PROPERTIES 14 1 7.3M SQ. FT. PROPERTIES PROPERTIES 8% 0.8M SQ. FT. 51K SQ. FT. ATLANTIC 18% SMALL <20,000 NOVA SCOTIA 21% QUEBEC % 14% 43 MEDIUM ONTARIO 12 20,000 – 100,000 PROPERTIES 68% 0.6M SQ. FT. LARGE URBAN >100,000 28% WESTERN 19 MILLION SQUARE FEET GLA ONTARIO LARGE URBAN >100,000 WESTERN *excludes Quebec distributionMEDIUM centre property 20,000 – 100,000 Lévis, Quebec Sallaberry-de-Valleyfield, Quebec QUEBEC SMALL <20,000 ATLANTIC INVESTMENT HIGHLIGHTS Exceptional Cash Flow Predictability & Reliable Monthly Distributions Irreplaceable Canadian Real Estate Portfolio Investment Grade Anchor Tenant Well-Planned Solid Long-Term Growth Durable Portfolio Features Oakville, Ontario (continued from cover) On Closing, it is expected that CTC will hold an approximate 85.0% effective interest in the REIT through ownership of 59,711,094 Units and all of the Class B limited partnership units (‘‘Class B LP Units’’) of the Partnership that are economically equivalent to and exchangeable for Units (or an approximate 83.1% effective interest in the REIT if the Over-Allotment Option (as defined below) is exercised in full). In addition, CTC will hold all of the Class C limited partnership units (‘‘Class C LP Units’’) of the Partnership. See ‘‘Retained Interest — Retained Interest of CTC’’. Over many decades, CTC has built and maintained a significant ownership interest in its Canadian Tire Retail store properties and views that ownership interest as being an important component of CTC’s long-term strategy. CTC views the creation of the REIT as a preferred structure by which it can continue to own a significant interest in its Canadian Tire Retail store properties and believes that continuing to own an effective majority ownership interest (comprised of Units and Class B LP Units) in the REIT is consistent with its long-term strategy. The objectives of the REIT are to: (a) provide holders of Units (‘‘Unitholders’’) with reliable, durable and growing monthly cash distributions on a tax-efficient basis; (b) expand the REIT’s asset base while also increasing its adjusted funds from operations (‘‘AFFO’’) per Unit and net asset value per Unit, including through contractual rent escalations, accretive acquisitions of properties from CTC and third parties and further development (including intensification) of its properties; and (c) otherwise enhance the value of the REIT’s assets in order to maximize long-term Unitholder value. The REIT initially intends to make monthly cash distributions of $0.054167 per Unit to Unitholders, which are estimated to be approximately 90% of the REIT’s AFFO, on an annual basis, during the period from January 1, 2014 to December 31, 2014 (the ‘‘Forecast Period’’). See ‘‘Additional GAAP and Non-GAAP Measures’’ and ‘‘Distribution Policy’’. On Closing, the REIT will employ an experienced internal senior executive team which will be supported, pursuant