NEWS
CIBT Education to purchase Vancouver land for $30.3M
2019-01-07 07:21 ET - News Release
Mr. Toby Chu reports
CIBT SUBSIDIARY SIGNS AGREEMENT TO PURCHASE THREE PARCELS OF LANDS TO DEVELOP GEC OAKRIDGE FOR $103 MILLION
CIBT Education Group Inc. has signed three property purchase agreements for an aggregate purchase price of $30.3-million. These lands will be the site of the development of a highrise serviced apartment (the "Project") near the corner of Cambie Street and West 42nd Avenue in Vancouver, to be owned by GEC Oakridge Limited Partnership (formerly named GEC Langara Limited Partnership) in which a subsidiary of CIBT is an investor. The Project, named GECtrademark Oakridge, is situated at the centre of the City of Vancouver within the Cambie Corridor Plan ("CPP"), where the city has plans to allow for high-density rental zoning. The location is also approximately a one minute walk to the Oakridge SkyTrain station located at the corner of Cambie Street and West 41st Avenue.
The total development budget for this Project, including land, construction, FFE (furniture, fixture & equipment) and financing costs, is approximately $103 million. After construction, GECtrademark Oakridge will be an 18 storey, 125,000 square feet concrete highrise tower with the ability to accommodate up to 430 beds. The Project is subject to re-zoning and city approval.
"In nine months, we have successfully exited two GECtrademark projects, sold four ground floor commercial units at GECtrademark Burnaby Heights, and sold one out of the three planned towers within Global Education Citytrademark (Richmond) as reported in our news release of January 3rd, 2019. These transactions have proven our business model and achieved substantial returns for CIBT and the other investors in these projects," commented Toby Chu, Chairman, President and Chief Executive Officer of CIBT. "As part of these exits, the purchasers signed five to ten-year management contracts for GEC Management Limited Partnership to continue its management services post-transaction. While we are exiting smaller scale projects, we have added larger-scale projects such as Global Education Citytrademark (Richmond) and GECtrademark Oakridge to our portfolio during the same nine-month period. These transactions allow GEC to continue scaling our total bed count in rapid pace while increasing rental revenues and monetizing on the appreciated value of GECtrademark project holdings. Our ability to acquire new projects while selling certain holdings with high yields, and being retained as GECtrademark branded property has not only proved our business model but has also allowed us to take advantage of the latest real estate market slowdown by acquiring undervalued properties such as GECtrademark Oakridge."
"While Metro Vancouver is currently experiencing a slowdown in the residential housing market, the rental housing shortage is considered to be in crisis mode which has prompted continued appreciation in the market value of our GECtrademark rental real estate portfolio. Our strategy is to expand our education platform, continue scaling our bed count with our large pipeline of students, collect attractive rental returns, and finally exit when the next real estate economic cycle returns. We plan to repeat the process toward achieving our next milestone of $2 billion of GECtrademark branded properties."
The closing of the purchase of the GECtrademark Oakridge lands is expected to occur in late August 2019 subject to the satisfactory completion of all due diligence reviews and the removal or satisfaction of other conditions. During this time, the purchaser will apply for rezoning and prepare the development and construction plans.
Further to CIBT's news release dated November 1st, 2018, subjects were not removed in connection with the planned purchase of two parcels of land for the GECtrademark Langara project. Management feels that GECtrademark Oakridge is a larger scale project and presents the opportunity to yield a better return for our investors.
About CIBT Education Group:
CIBT Education Group Inc. is one of the largest education, and student housing investment companies in Canada focused on the global education market since 1994. Listed on the Toronto Stock Exchange and U.S OTCQX International, CIBT owns business and language colleges, student housing properties, recruitment centres and corporate offices at 43 locations in Canada and abroad. Total annual enrollment for the group exceeds 12,000 students. Its education providers include Sprott Shaw College (established in 1903), Sprott Shaw Language College, Vancouver International College and CIBT School of Business. Through these schools, CIBT offers business and management programs in healthcare, hotel management, language training, and over 150 career, language and vocational programs.
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