Monday, October 30, 2006
The lands are located at the site of Canadian Tire's former warehouse property at Sheppard Avenue and Leslie Street in the North York region of Toronto. The site has been zoned for four million square feet of residential use, representing approximately 4,000 residential units. Canadian Tire will retain approximately three acres of land for future use and will also retain the existing Canadian Tire store site, which also includes a Mark's Work Wearhouse store.
"By selling this property in Toronto we are continuing to surface value from our surplus real estate assets that no longer hold strategic value, a key imperative of our current strategic plan," said Tom Gauld, president and CEO, Canadian Tire Corporation, Limited.
The structure of the transaction includes payment terms over 10 years or faster at the discretion of Concord Adex. The agreement follows a North American-wide competitive bid process. The transaction structure and purchase price are designed to maximize the value of the site, reflecting the significant upfront infrastructure investment required by the purchaser as well as the phased build-out schedule required due to the size of the property.
Scheduled to close by the end of November 2006, the transaction will result in pre-tax earnings of approximately $121 million. A gain of approximately $51 million will be recorded on closing, with the remaining $70 million recorded as imputed interest over the life of the agreement. The gain of $51 million will be treated as a non-operating item and as such this transaction will not change the Company's existing earnings guidance for 2006 of $4.25 to $4.40 per share excluding non-operating items.
Canadian Tire owns about 70 percent of its Canadian Tire Retail store network and leases the majority of its other retail properties. Canadian Tire views its Canadian Tire Retail store network as strategic assets due to the important flexibility real estate ownership provides for its continued store transformation activities. This transaction is part of Canadian Tire's stated strategy to monetize non-strategic real estate assets, which also includes the ongoing disposition of surplus real estate created by the store network transformation activities. Most recently, the Company announced a sale-leaseback transaction for two distribution centres in the first quarter of 2006, yielding a $50 million gain. In 2005, the Company undertook a sale-leaseback transaction of a Canadian Tire- anchored multi-tenant urban property in Vancouver and sold a property zoned for residential use in Toronto.
Canadian Tire Corporation, Limited (TSX: CTC, CTC.a), Canada's most-shopped general merchandise retailer, operates more than 1,100 stores, gas bars and car washes in an inter-related network of businesses engaged in retail, financial services and petroleum. Canadian Tire Retail, with 464 stores operated by Associate Dealers across Canada offers a unique mix of products and services through three specialty categories in which the organization is the market leader - Automotive, Sports and Leisure, and Home Products. www.canadiantire.ca offers Canadians the opportunity to shop online.
PartSource is an automotive parts specialty chain with 59 stores designed to meet the needs of purchasers of automotive parts - professional automotive installers and serious do-it-yourselfers. Canadian Tire Petroleum is one of the country's largest and most productive independent retailers of gasoline, operating 262 gas bars, 248 convenience stores and kiosks, and 73 car washes.
Mark's Work Wearhouse is one of the country's leading apparel retailers operating 330 stores in Canada. Under the Clothes that Work(TM) marketing strategy, Mark's sells apparel and footwear in work, work-related, casual and active-wear categories, as well as health-care and business-to-business apparel. www.marks.com offers Canadians the opportunity to shop online.
Canadian Tire Financial Services manages over 4 million Canadian Tire MasterCard accounts and markets related financial products and services for retail and petroleum customers. Canadians can also access Financial Services online at www.ctfs.com. Over 50,000 Canadians work across Canadian Tire's organization from coast-to-coast in the enterprise's retail, financial services, and petroleum businesses.
For further information: Media: Caroline Casselman, Director, Community & Public Affairs, (416) 480-8159, firstname.lastname@example.org; Investors: Michelle Dodokin, Director, Investor Relations, (416) 480-3070, email@example.com
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