Canadian Tire reaches agreement to sell a non-strategic real estate asset for $149.7 million TORONTO, Oct. 30 /CNW/ - Canadian Tire Corporation, Limited (CTC, CTC.a)today announced that it has reached agreement on the sale of approximately40-acres of surplus lands in the Leslie and Sheppard area of Toronto to Concord Adex Investments Limited of Vancouver for total proceeds of $149.7million. In addition to the purchase price, the purchaser will make significant infrastructure investments in the local road network and toward the creation of a community park. The lands are located at the site of Canadian Tire's former warehouse property at Sheppard Avenue and Leslie Street in the North York region of Toronto. The site has been zoned for four million square feet of residential use, representing approximately 4,000 residential units. Canadian Tire will retain approximately three acres of land for future use and will also retain the existing Canadian Tire store site, which also includes a Mark's Work Wearhouse store. "By selling this property in Toronto we are continuing to surface value from our surplus real estate assets that no longer hold strategic value, a key imperative of our current strategic plan," said Tom Gauld, president and CEO, Canadian Tire Corporation, Limited. The structure of the transaction includes payment terms over 10 years or faster at the discretion of Concord Adex. The agreement follows a North American-wide competitive bid process. The transaction structure and purchase price are designed to maximize the value of the site, reflecting the significant upfront infrastructure investment required by the purchaser as well as the phased build-out schedule required due to the size of the property. Scheduled to close by the end of November 2006, the transaction will result in pre-tax earnings of approximately $121 million. A gain of approximately $51 million will be recorded on closing, with the remaining $70 million recorded as imputed interest over the life of the agreement. The gain of $51 million will be treated as a non-operating item and as such this transaction will not change the Company's existing earnings guidance for 2006 of $4.25 to $4.40 per share excluding non-operating items. Canadian Tire owns about 70 percent of its Canadian Tire Retail store network and leases the majority of its other retail properties. Canadian Tire views its Canadian Tire Retail store network as strategic assets due to the important flexibility real estate ownership provides for its continued store transformation activities. This transaction is part of Canadian Tire's stated strategy to monetize non-strategic real estate assets, which also includes the ongoing disposition of surplus real estate created by the store network transformation activities. Most recently, the Company announced a sale-leaseback transaction for two distribution centres in the first quarter of 2006, yielding a $50 million gain. In 2005, the Company undertook a sale-leaseback transaction of a Canadian Tire- anchored multi-tenant urban property in Vancouver and sold a property zoned for residential use in Toronto.