Huntingdon Capital Corp. (HNT.TO) announced that it has entered into a binding agreement to sell Portage Place, Peterborough, Ontario. The company noted that the previously announced agreement in February 2012 to sell 4 Ontario retail properties has been amended to include Portage Place. The revised terms of the agreement include the sale of 5 Ontario retail properties for gross sale proceeds of $80.0 million.
Based on 2012 budgeted net operating income, this transaction represents a 6.3% capitalization rate.
The revised agreement also includes a $5.0 million interest only vendor take-back mortgage bearing interest at a rate of 5.5% per annum and maturing two years after the closing date. The vendor take-back mortgage is secured by a second charge on Portage Place. The sale will result in net cash, excluding the vendor take-back mortgage, of approximately $59.4 million after expenses, closing adjustments and the repayment of $14.2 million of mortgage debt.
Portage Place is a 226,714 square foot enclosed shopping centre located in Peterborough, Ontario with occupancy of 87.8% as at December 31, 2011.
The company noted that the proceeds from the sale will be used for the repayment of mortgage debt, the return of capital to shareholders and potential acquisitions. The transaction is expected to close in May 2012.
by RTT Staff Writer
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