Primaris Retail REIT Announces $377 Million Alberta Acquisitions

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES. 

Primaris Retail REIT (TSX:PMZ.UN) ("Primaris") announced today that it has
agreed to purchase a portfolio of shopping centres (the "Alberta Acquisition")
for $377 million dollars (the "Purchase Price"). Primaris will buy a 100%
interest in nine properties owned by Sherwood Park Mall Limited, Markalta
Developments Ltd. and Sleeping Bay Building Corp. (collectively the "Vendor")
which include: two enclosed regional shopping centres including an adjacent
professional building, five unenclosed strip plazas, one single tenant retail
building, and 4.47 acres of development land, as more particularly described
below.


The portfolio includes Medicine Hat Mall, Medicine Hat, Alberta and Sherwood
Park Mall, Edmonton, Alberta. Subject to typical conditions of closing for a
transaction of this type, closing of the Alberta Acquisition is expected to
occur on March 4, 2013.


Commenting on the acquisition, Primaris president and CEO, John Morrison, said,
"We are very pleased to extend Primaris' reach in western Canada. Medicine Hat
Mall and Sherwood Park Mall are both quality assets that are dominant in their
trade areas. Primaris' acquisition of these assets complements our existing
Alberta presence in Calgary, Edmonton and Lethbridge, and broadens our
visibility and reach in western Canada. We expect these acquisitions to be
accretive to our funds from operations per unit." 


Mr. Morrison added, "The acquisition of these shopping centres is part of our
defined property strategy to own dominant centres in secondary markets. This is
our strength and we excel at managing, leasing and enhancing the value of these
types of properties. Our shopping centres typically have high occupancy and low
turnover with the right blend of retail brands that consumers want."




----------------------------------------------------------------------------
                                                             Gross          
                                                          Leasable  Purchase
      Property Name                 Location                  Area  Interest
----------------------------------------------------------------------------
                                                                            
A) Medicine Hat Cluster:                                                    
                                                                            
   1) Medicine Hat Mall             Medicine Hat, AB       539,182      100%
                                                                            
   2) Trans-Canada Plaza            Medicine Hat, AB        20,115      100%
                                                                            
   3) Scotia Plaza                  Medicine Hat, AB        11,366      100%
                                                                            
   4) Carry Drive Plaza             Medicine Hat, AB        29,581      100%
                                                                            
   5) Dunmore Plaza                 Medicine Hat, AB        30,251      100%
                                                                            
   6) Park Plaza                    Medicine Hat, AB        60,504      100%
                                                        ----------          
                                                                            
                       Sub-total of Medicine Hat Cluster   690,999          
                                                                            
B) Sherwood Park Cluster (Suburb of Edmonton):                              
                                                                            
   7) Sherwood Park Mall            Sherwood Park, AB      460,875      100%
                                                                            
   8) Sherwood Park Plaza           Sherwood Park, AB       44,267      100%
                                                                            
   9) Development Land (4.47 acres) Sherwood Park, AB            -      100%
                                                        ----------          
                                                                            
                      Sub-total of Sherwood Park Cluster   505,142      100%
----------------------------------------------------------------------------
                                                                            
      Total Portfolio                                    1,196,141          
----------------------------------------------------------------------------



Primaris estimates that it will earn a going-in capitalization rate of 5.76%
(meaning the estimated first twelve months net operating income divided by the
purchase price) on these properties. This estimated return includes amounts that
represent the recovery of deferred capital expenditures made by the vendor. 


Medicine Hat Mall, Medicine Hat

Medicine Hat Mall is a single-level enclosed regional shopping centre containing
a net rentable area of approximately 539,000 square feet. It was built in 1980
and was recently renovated in 2008. The centre is anchored by Target, The Bay,
Safeway, Galaxy Cinemas and Sears. The site comprises approximately 51 acres.
Medicine Hat Mall is the premier enclosed shopping centre in the south eastern
Alberta market. This is the only Target store located between Calgary and
Regina. Sales for the 12 month period ended June 30, 2012, are estimated to be
$489 psf.


Sherwood Park Mall, Sherwood Park (Edmonton)

Sherwood Park Mall is a single-level enclosed regional shopping centre
containing a net rentable area of approximately 461,000 square feet. It was
built in 1972 and was recently renovated in 2012. The centre is anchored by
Target, Galaxy Cinemas and Safeway. A three-storey office building forms part of
the shopping centre. The site comprises approximately 36 acres. Sales for the 12
month period ended June 30, 2012, are estimated to be $477 psf.


Funding

The purchase price, including closing costs, is expected to be funded as follows
($millions):




Vendor Financing    $339.0  
Credit Facility     $41.0   
                    $380.0  



Primaris is seeking permanent long term mortgage financing to be secured by
Medicine Hat Mall, Trans-Canada Plaza, and Sherwood Park Mall. The vendor
financing has a term of 7 months and will be repaid out of new permanent
financing to be arranged, other future mortgages, unsecured debt or equity
financings. 


Liquidity Remains Solid

The draw on the line of credit will leave approximately $57 million dollars of
unused credit capacity. Primaris will remain in a liquid financial position
after completing this acquisition. In addition Primaris will have $575 million
of unencumbered assets, excluding those assets subject to the vendor financing.


The pro forma Debt to Total Assets ratio will be 45.1%. The pro forma annualized
EBITDA to interest expense will be 2.7x. Management believes that this liquidity
position and amount of debt are at levels that allow Primaris to continue to
meet current obligations comfortably and pursue future growth opportunities as
they become available.


Forward-Looking Information

This press release contains forward looking statements that reflect the current
expectations of Primaris about its future results, performance, prospects and
opportunities. Readers are cautioned not to place undue reliance on forward
looking information. Primaris has tried to identify these forward looking
statements by using words such as "may", "will", "should" "expect",
"anticipate", "believe", "intend", "plan", "estimate", "potentially" and similar
expressions. By its nature, such forward looking information necessarily
involves known and unknown risks and uncertainties that may cause Primaris'
actual results, performance, prospects and opportunities in future periods to
differ materially from those expressed or implied by such forward looking
statements. These risks and uncertainties include, among other things, risks
related to: the anticipated closing of the Alberta Acquisition; real property
ownership; tenant risks; fixed costs; liquidity; financing risks; limit on
activities; availability of cash flow; availability of growth opportunities;
access to capital; interest rate fluctuations; retail concentration; reliance on
anchor tenants; restrictions on redemptions; competition; land leases; general
uninsured losses; environmental matters; possibility of unitholder liability;
tax-related risk factors; potential conflicts of interest; dilution; specific
lease considerations; and nature of investment. There can be no assurance that
Primaris' expectations will prove to be correct. Primaris assumes no obligation
to update or revise any such forward looking statements to reflect new events or
circumstances.


Although the forward-looking statements contained in this press release are
based upon what management believes are reasonable assumptions, there can be no
assurance that actual results will be consistent with these forward-looking
statements. Certain assumptions made in preparing forward-looking information
and Primaris' objectives include the assumption that the Alberta Acquisition
will be completed on the terms and basis set out herein, the Canadian economy
will remain stable in 2013 and that inflation will remain relatively low.
Management has also assumed that interest rates will remain stable in 2013 that
conditions within the real estate market, including competition for
acquisitions, will be consistent with the current climate and that capital
markets will continue to provide Primaris with ready access to equity and/or
debt. 


Readers should not place undue importance on forward-looking information and
should not rely upon this information as of any other date. While Primaris may
elect to, Primaris is under no obligation and does not undertake to update this
information at any particular time, except as required by law.


Upon completion of these acquisitions, Primaris will own 43 income-producing
properties comprising approximately 15.9 million square feet located in Canada.
As of December 31, 2012, Primaris had 100,346,768 units issued and outstanding,
including 2,122,261 Exchangeable Units.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Primaris Retail REIT
John Morrison
President and Chief Executive Officer
(416) 642-7860


Primaris Retail REIT
Louis M. Forbes
Executive Vice President and Chief Financial Officer
(416) 642-7810
Primaris Real Estate Inv... (TSX:PMZ.UN)
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