CIBT Subsidiary Signs Formal Agreement to Acquire the 9th GEC Branded Property
November 1, 2018
Vancouver, BC – November 1st, 2018 – CIBT Education Group Inc. (“CIBT” or the “Company”) (TSX: MBA, OTCQX International: MBAIF) is pleased to announce the signing of a formal Purchase and Sale Agreement for the purchase by GEC Langara Limited Partnership of two parcels of land to develop a highrise serviced apartment (the “Project”) near the corner of Cambie Street and 49th Avenue in Vancouver. The Project, named GEC® Langara, is located at the centre of the City of Vancouver and is approximately 20 feet from the Langara SkyTrain station.
GEC® Langara is the ninth GEC® branded project and, once constructed, will be the 12th building within the GEC® portfolio. The Project is expected to have a gross building area of approximately 63,000 square feet. The total development budget for this Project, including land, construction, FFE (furniture, fixture & equipment) and financing costs, is approximately $60 million.
“After our successful exit of two GEC® projects and the sale of 4 ground floor commercial units, we have proven our business model to be successful. Since March 2018, approximately $118.5 million of GEC® properties have been monetized, providing liquidity to our limited partnership investors and CIBT”, commented Toby Chu, Chairman, President and Chief Executive Officer of CIBT. “In addition to these exits, $260 million worth of properties have been added to the GEC® portfolio and new development budgets. These properties are GEC® Pearson in Vancouver and Global Education City® located in Richmond, B.C. While Metro Vancouver is currently experiencing a slow down in the residential housing market, a rental housing shortage continues to be in crisis mode which prompted rapid appreciation in market value of the GEC® real estate portfolio. Regarding financial performance, the exits of GEC® Granville and GEC® Viva resulted in an ROIC (return on invested capital) to the respective limited partners of 138% and 333% respectively. The GEC® Pearson property appreciated in value by $44.6 million, or an increase of 105%, between the time of signing the purchase contract in 2014 and the recent completion of its purchase. This proven track record has allowed us to expand the GEC® portfolio rapidly and raise new capital at reasonable terms. We intend to take advantage of the latest real estate market slow down by acquiring undervalued properties, developing new projects, filling them with our large pipeline of students, collecting attractive rental returns, and finally exiting when the next real estate economic cycle returns in a few years”.
About GEC® Langara:
GEC® Langara will be a 12 storey concrete construction accommodating approximately 220 beds. The location is three blocks from the Vancouver Community College Langara Campus, and approximately 10 minutes of travel time by SkyTrain to downtown Vancouver, Richmond City Centre and the Vancouver international airport. This Project has received re-zoning approval, and a development permit application is expected to be submitted shortly. Construction for this Project is expected to commence in early 2019.
The closing date of the purchase of the GEC® Langara lands is expected to be January 15th 2019 subject to the satisfactory completion of all due diligence reviews and the removal or satisfaction of other conditions.
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. 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, the statements as to the expected acquisition and development of the Project, the expected Project budget, the expected timing of the submission of the development permit application, the expected timing of Project construction, the expectation that the demand for rental accommodations will continue to be strong and the expectation that a strong real estate economic cycle will return in a few years. 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, the ability to negotiate and enter into a binding agreement for the construction of the Project, the ability of GEC Langara Limited Partnership to raise the required funds from the sale of equity and to raise the necessary commercial debt financing on acceptable terms, the ability to obtain all required municipal approvals, usual construction risks, and the market demand for accommodations in the Project, once completed. 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.