Place Val Est

On January 31, 2008 Charter REIT acquired Place Val Est in Sudbury, Ontario for an aggregate purchase price of $14.72 million before closing costs.

The Property is a 110,313 square foot food-anchored retail strip centre located in the north section of Sudbury (Valley East). It has the dominant grocery store in that area and is currently 98.4% leased, with 81% of the tenants being national/regional retailers. Tenants include LOEB (33,063 square feet), PharmaSave (6,500 square feet), Pro Hardware (5,358 square feet), RBC (4,900 square feet), LCBO (2,746 square feet), Harvey’s (3,350 square feet) and Tim Horton’s (2,450 square feet).

With the Valley East population of approximately 20,000, the Property has become the main shopping destination in the community. Valley East is the fastest growing area of Sudbury, with 27.9% of all Sudbury new home construction taking place there over the first 10 months of 2007. Furthermore, this number has grown by 20% on a year over year basis. The area’s growth will allow Charter REIT to raise rents as leases expire, and lead to significant organic growth at the Property.

The Property is stable with less than 30% of the leased area expiring before 2012. The average term to maturity of existing leases is 5.5 years. In the next five years, leases representing the percentage of leased retail square feet set out below will expire:

The estimated going-in yield for the acquisition on an unlevered basis is approximately 8.06% before closing costs. Charter REIT has agreed to assume an existing standard first mortgage loan in the amount of $8.1 million expiring in 2015. The remainder of the acquisition has been funded by Charter REIT’s operating/acquisition facility.

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