CIBT Subsidiary Signs Agreement to Purchase Three Parcels of Lands to develop GEC Oakridge for $103 Million
January 7, 2019
Vancouver, BC – January 7th, 2019 – CIBT Education Group Inc. (“CIBT” or the “Company”) (TSX: MBA, OTCQX International: MBAIF) is pleased to announce the signing of 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 GEC® 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, GEC® 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 GEC® projects, sold four ground floor commercial units at GEC® Burnaby Heights, and sold one out of the three planned towers within Global Education City® (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 City® (Richmond) and GEC® 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 GEC® project holdings. Our ability to acquire new projects while selling certain holdings with high yields, and being retained as GEC® 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 GEC® 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 GEC® 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 GEC® branded properties.”
The closing of the purchase of the GEC® 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 GEC® Langara project. Management feels that GEC® 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. 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: firstname.lastname@example.org
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 the closing of the purchase of the lands for the Project, 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 removal of conditions precedent under the agreement for the purchase of the lands for the Project, the ability to negotiate and enter into a binding agreement for the construction of the Project, the ability of GEC Oakridge Limited Partnership to raise the required funds for the Project from the sale of equity and 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.