August 20, 2012

Lanesborough Real Estate to spend $2.1 million on capital improvements

Lanesborough Real Estate Investment Trust of Winnipeg reported its latest financial results Tuesday night.

For the three months ending June 30, the firm had net income of $7.4 million from continuing operations.

Rentals from investment properties were $9.388 million during the quarter, down from $10.363 million for the same period in 2011.

In Ontario, Lanesborough REIT owns the Elgin Lodge Retirement Home in Port Elgin and a Purolator Sorting Facility in Burlington.

In its management discussion and analysis posted to SEDAR on Tuesday, the firm said it anticipates capital improvements are expected to be about $2.1 million for the remainder of 2012, including $481,000 for capital improvements for six apartment properties located in Fort McMurray, Alberta.

During the latest quarter, the company reported a gain, from $23.3 million to $43.3 million, in the value of Parsons Landing, an apartment building in Fort McMurray, that was destroyed by a fire in February. The firm says agreements were finalized in June, under which the builder has agreed to complete the reconstruction of the building and “attend to the recovery of the insurance claim” for the property.

Lanesborough REIT noted that as of June 30, there were 25 properties in its real estate portfolio, comprised of 22 properties in the investment property portfolio and three seniors housing complexes, which are reflected in discontinued operations.

Of the 22 investment properties, 13 are in Fort McMurray, one of which is the damaged Parsons Landing. The other 12 accounted for 53 per cent of its total revenue.

"Employees from the oil sands industry represent the primary tenant base of the Fort McMurray portfolio," according to the management discussion and analysis. "Based on the recent growth in the level of construction activity in the oil sands industry and the resulting substantial increase in occupancy levels of the Fort McMurray properties, the residential property market in Fort McMurray has improved; however, there can be no assurance as to the extent of the improvement and there is the possibility that market conditions may decline."

DCN DIGITAL MEDIA

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