GEC® Pearson Receives Occupancy Permits
August 1, 2018
Vancouver, BC August 1st, 2018 – CIBT Education Group Inc. (“CIBT” or the “Company”) (TSX: MBA, OTCQX International: MBAIF) is pleased to report that GEC® Pearson, one of the GEC® new construction projects, has received occupancy permits issued by the city of Vancouver. It is expected that Global Education City Management Corp. (“Global Management”) will take possession of the building on behalf of GEC Pearson Limited Partnership in the next two weeks.
The purchase contract for GEC® Pearson was signed on May 12th, 2014. After four years of construction, GEC Pearson® is scheduled to commence operations by mid-August 2018 after furniture and fixture installations have been finalized. Reservations for GEC® Pearson began back in early 2018, and due to the buildings’ location along the Skytrain route, the response has been overwhelming. This project is conveniently located within a few blocks of the nearby Marine Drive SkyTrain Station, and is one station from Langara College, two stations from Sea Island (on which the Vancouver International Airport is located), three stations from Kwantlen Polytechnic University’s Richmond Main Campus, and six stations from Downtown Vancouver which is home to hundreds of language schools, colleges and universities.
“We are thrilled to announce the receipt of the occupancy permits for GEC® Pearson”, commented Toby Chu, President, CEO, and Chairman of CIBT Education Group. “With the permits now in place, Global Education City Management Corp. is scheduled to take possession of the building two weeks from today. The addition of another 320 beds to the growing GEC® portfolio of student housing in the Greater Vancouver area allows us to supply the growing demand which is showing no signs of slowing down. As the leading source of student accommodations in Western Canada, we are aggressively expanding the GEC® footprint to capture as much of the international and domestic student demand as possible by acquiring attractive assets such as GEC® Pearson, leading to strong returns for CIBT.”
GEC® Pearson consists of two concrete and wood framed six-storey residential apartment buildings with all furniture, fixture, kitchen utensils, beds, linens and other day-to-day amenities included. Also provided are internet WiFi, NetFlix, 24/7 video surveillance of all public areas, an on-site caretaker and weekly housekeeping.
The total purchase price for this project is $42.5 million excluding FFE (furniture fixture and equipment). A recent appraised value for this project is $87.1 million, which represents an appreciation of $44.6 million in four years. The total combined cash investment by CIBT and two other limited partners was $12 million. Based on the current appraised value of $87.1 million less bank financing, the total return for the $12 million investment is approximately $38 million, a return on capital of 317% over four years, or an effective return of 71.4% per year. CIBT owns 38.5% of GEC Pearson Limited Partnership. Global Management is the manager and another CIBT subsidiary is the general partner of GEC Pearson Limited Partnership. Total recurring rental revenue to be generated from this location is expected to be approximately $4.5 million per year.
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 15,000 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. CIBT owns Global Education City Holdings Inc., an investment holding and development company focused on developing education related real estate such as student hotels, serviced apartments and education super centres. Total portfolio and development budget of projects under the GEC® brand is more than C$1 billion. CIBT also owns Global Education Alliance (“GEA”) and Irix Design Group (“Irix Design”). GEA recruits international students on behalf of many elite kindergartens, primary and secondary schools, colleges and universities in North America. Irix Design is a leading design and advertising company based in Vancouver, Canada. Visit us online and watch our corporate video at www.cibt.net.
Chairman, President and Chief Executive Officer
CIBT Education Group Inc.
Investor Relations Contact: 1-604-871-9909 extension 318 or | Email: email@example.com
Some statements in this news release contain forward-looking information (the “forward-looking statements”). Forward-looking statements are statements that are not historical facts and in this news release include, without limitation, statements as to the expected possession date of GEC® Pearson and the total recurring rental revenue to be generated from this location. Forward-looking statements are subject to various risks, uncertainties and other factors (collectively, “Risks”) that could cause CIBT’s actual results or achievements to differ materially from those expressed in or implied by forward-looking statements. The Risks include, without limitation, that the closing of the purchase of the land and buildings comprising GEC® Pearson doesn’t occur when expected, and that the vacancy rate and rental rates of GEC® Pearson will be as forecast by management. Forward-looking statements are based on the beliefs, opinions and expectations of CIBT’s management at the time they are made, and CIBT does not assume any obligation to update its forward-looking statements if those beliefs, opinions or expectations, or other circumstances should change, except as may be required by law.