TORONTO, Dec 19, 2005 (BUSINESS WIRE) -- Canadian Apartment Properties Real Estate Investment Trust ("CAP REIT") (TSX:CAR.UN) announced today that it had completed the sale of thirteen smaller, non-core apartment complexes in Ontario aggregating 797 suites. The total sale price was approximately $70.3 million, generating a gain on the disposition of approximately $10.0 million or $0.19 per Unit. The total cash proceeds from the sale, before closing costs, were approximately $42.5 million, and will be used to pay down the REIT's acquisition facility and finance future growth. The properties were purchased by Transglobe Property Management Services Ltd.
"With the closing of this innovative transaction we repositioned our portfolio by selling certain smaller, non-core Ontario properties that did not suit our current operating infrastructure, and redeployed the capital from the sale to expand our presence in the Greater Vancouver Area, Montreal and Quebec City, three of Canada's strongest rental markets," commented Thomas Schwartz, President and Chief Executive Officer. "One of our key objectives is to reduce Unitholder risk by enhancing the geographic diversification of our portfolio and increasing our presence in strong markets," Mr. Schwartz continued. "Through a number of transactions this year, we have made significant progress toward meeting this goal." With the completion of this transaction, CAP REIT's Ontario portfolio reduced to 70% of our total portfolio from 71% prior to the transaction, with the Greater Toronto Area now representing 51% of the total portfolio compared to 52% before the sale.
This transaction brings a number of other benefits to Unitholders. With the reduction in the acquisition facility, CAP REIT's proforma total debt to gross book value ratio improved to 62.5% from 63.3% as at September 30, 2005. In addition, the retention of cash and the gain from the sale will result in an increase in the REIT's net asset value and provide considerable capacity to finance further growth initiatives going forward.
Mr. Schwartz concluded: "This sale is yet another example of how, as a result of our recycling of capital strategy, we are using the significant increase in the value of our properties to generate enhanced returns for our Unitholders. Looking ahead, we will continue to evaluate how we can capitalize on our high-quality portfolio to build on our track record of growth and performance."