H&R REIT Provides COVID-19 Update and Declares April Distribution

TORONTO, April 17, 2020 /CNW/ - H&R Real Estate Investment Trust ("H&R" or "the REIT") (TSX: HR.UN) announces the following recent developments:

• A new $425 million unsecured credit facility from a syndicate of four Canadian banks
• A new 8.5-year $100 million mortgage secured (subject to customary closing conditions) by a previously unencumbered property
• Collection of 83% of total rents payable April 1^st

Following the significant economic and social disruption that has come with the COVID-19 pandemic, individuals and businesses alike are facing unprecedented challenges.  We are doing everything possible to protect and support everyone our organization touches, as we pull together as a community.  With ample liquidity and a diverse cross-section of asset class and geographic exposures the REIT has been working closely with its tenants, lenders and other stakeholders to navigate through these unprecedented times. 

Liquidity Bolstered

Notably, both the new credit facility and mortgage were arranged following the onset of the COVID-19 economic disruption, underscoring H&R's strong access to capital.  The $425 million credit facility has been provided by Canadian Imperial Bank of Commerce, The Bank of Nova Scotia, The Toronto-Dominion Bank and Bank of Montreal and for a one-year term.  The $100 million mortgage has been provided by a life insurance company. 

Following the arrangement of the new mortgage, H&R has 89 unencumbered properties valued at approximately $3.8 billion as at December 31, 2019.  In addition, reflecting H&R's 23-year history and conservative long-term financing strategy on individual properties, H&R has numerous properties with very low loan to value ratios. As at December 31, 2019, H&R had 40 properties valued at approximately $1.5 billion which are encumbered with mortgages totalling $221.8 million. In this pool of assets, the average loan to value is 14.8%, the minimum loan to value is 0.7% and the maximum loan to value is 29.2%. The weighted average remaining term to maturity of this pool of mortgages is 2.4 years.

April Rent Collection Statistics

Tenant receipts to date for April rent charges amount to:

• 99.5% from office tenancies (43.8% of total rent*)
• 56.0% from retail tenancies (33.2% of total rent)
• 94.5% from multi-residential tenancies (16.7% of total rent)
• 91.9% from industrial tenancies (6.3% of total rent)

* includes Government tenancies whose rent is only due at the end of April.

The above April payment collections include the following notable sub-segment April 1^st payments:

• 40.5% of rent from Primaris enclosed malls
• 83.9% of rent from ECHO Realty grocery anchored retail properties
• 90.3% of rent from other H&R retail properties
• 96.6% of rent from Jackson Park in Long Island City

Management has been evaluating rent deferral requests on a case by case basis. The REIT expects a significant portion of the balance of April rent owing will be collected over time.

Operating Cost & Capital Expenditure Initiatives

Like many businesses, H&R has reviewed expenses and reduced certain costs, including for example the suspension of certain third-party service contracts relating to properties that have closed for the time being.  The REIT has also postponed certain development projects that had not yet commenced construction, reducing near term capital commitments.

Monthly Distribution Declared

H&R today declared a distribution for the month of April scheduled as follows:

About H&R REIT

H&R REIT is one of Canada's largest real estate investment trusts with total assets of approximately $14.5 billion at December 31, 2019. H&R REIT has ownership interests in a North American portfolio of high-quality office, retail, industrial and residential properties comprising over 41 million square feet.

Forward-looking Statements

Certain statements in this news release contain forward-looking information within the meaning of applicable securities laws (also known as forward-looking statements). These forward-looking statements include, but are not limited to, H&R's plans, objectives, expectations and intentions, including with respect to the collection of April rent owing and the payment of distributions. Such forward-looking statements reflect H&R's current beliefs and are based on information currently available to management. These statements are not guarantees of future performance and are based on H&R's estimates and assumptions that are subject to risks and uncertainties, including those discussed in H&R's materials filed with the Canadian securities regulatory authorities from time to time, which could cause the actual results and performance of H&R to differ materially from the forward-looking statements contained in this news release. Although the forward-looking statements contained in this news release are based upon what H&R believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. All forward-looking statements in this news release are qualified by these cautionary statements. These forward-looking statements are made as of today and H&R, except as required by applicable law, assumes no obligation to update or revise them to reflect new information or the occurrence of future events or circumstances.

Additional information regarding H&R REIT is available at www.hr-reit.com and on www.sedar.com.

SOURCE H&R Real Estate Investment Trust