June 15, 2012
/CNW/ - Scotiabank has completed the sale of its interest in the Scotia Plaza complex in
to Dundee REIT and H&R REIT for
. The closing of the transaction today completes the sale process. The after-tax gain from this sale is estimated at approximately
and will be reflected in Scotiabank's third quarter financial results which will be issued on
August 28, 2012
"We are pleased to have completed this transaction," said
, Scotiabank Vice-Chairman and Chief Operating Officer. "Scotiabank was the last of the major Canadian banks to own its
-based head office buildings. This asset is not core to our banking business and provides an efficient source of funding and capital to finance our growth."
"Strong market conditions provided an opportune time to maximize the value from this asset," said
, Scotiabank Executive Vice-President and Chief Financial Officer. "Excluding the gain, the impact of the sale on ongoing operations is not financially significant to Scotiabank and will reduce annual earnings per share by less than
The sale is accretive to capital, increasing the Tier 1 capital ratio under Basel II by approximately 26 basis points and the Common Equity Tier 1 ratio under Basel III by approximately 25 basis points.
Concurrent with the transaction, Scotiabank entered into new lease arrangements with the purchasers which will see the Bank continue as the anchor tenant in the Scotia Plaza complex. These leases, which include in the main tower at 40 King Street West, and the historic bank building at 44 King Street West, have an average term of 13.5 years. There are other ancillary properties on the city block that are included in the sale. The complex contains approximately two million square feet of rentable area. Scotiabank occupies 61% of the area and the complex is currently 99.5% occupied.