M&A

11 November, 2009

Allied Properties REIT ready for more acquisitions

* REIT sees property opportunities in Toronto, Montreal

* Says Vancouver market too expensive to enter right now

By Ka Yan Ng

TORONTO, Nov 11 (Reuters) - Allied Properties Real Estate Investment Trust (AP_u.TO) is ready to buy more properties in Toronto and Montreal, building on an existing portfolio of urban office space, the REIT said on Wednesday.

That was a more optimistic outlook than earlier this year, when Allied said it was not optimistic on prospects to buy new property, even though it had cash available.

"Happily, I was wrong in holding out little hope but entirely correct in proclaiming readiness," Chief Executive Michael Emory said in a conference call with analysts.

"The expectation that Allied Properties REIT will continue to be an active acquisitor going forward is a reasonable expectation to have."

Allied released slightly weaker-than-expected third quarter results after markets closed on Tuesday and said it agreed to buy two properties in downtown Toronto for about C$31 million [ID:nWNAB4095]. It announced a $192 million deal in September.

One of the new acquisitions will build on an existing project in a high-traffic downtown retail area with restaurants and night life, as well as chain and independent stores.

Allied mostly focuses on "Class I" office properties. Emory said it would also consider "conventional" office space as long as its geography and financial criteria make sense.

But Allied hasn't had as much success in Vancouver, British Columbia. It said its core markets in Toronto and Montreal, which account for the bulk of its over 30 million square feet of urban office space, appear to offer better opportunities, thwarting for now its wish to enter the Pacific coast market.

"We are going to continue to strive to enter that market, but right now the pricing remains not quite as prohibitive as it was, but in our view, prohibitive," said Emory.

Separately, Primaris Retail Real Estate Investment Trust (PMZ_u.TO) said it was also seeing more properties come to market than in the past and was optimistic on the potential for acquisitions.

The REIT, with 9.3 million square feet of retail space, said the economy remains soft, but its tenants are moving on with expansions and upgrades, and signing longer leases. ($1=$1.05 Canadian) (Reporting by Ka Yan Ng; editing by Janet Guttsman)

Source: http://www.reuters.com