CIBT Reports Signing of Purchase & Development Agreement to Develop Second Global Education City® Project
Vancouver, BC – March 21st, 2018 – CIBT Education Group Inc. (“CIBT” or the “Company”) (TSX: MBA, OTCQX International: MBAIF) is pleased to announce that one of its real estate investment limited partnerships (the “LP”) has entered into a definitive Purchase and Development Agreement (“PDA”) with a Vancouver developer to purchase and develop a second Global Education City® project in Metro Vancouver. Total project value is approximately $230 million inclusive of FF&E (furniture, fixture & equipment). Pursuant to the PDA, the developer will construct one office tower and two residential towers for CIBT’s newest flagship project totalling over 412,000 square feet. These three towers are a portion of a planned residential complex (the “Complex”) consisting of several towers, with over 1.5 million square feet of residential, commercial, retail and parking space. The total development budget for the site is over $600 million. The portion to be acquired by the LP will house up to 15 schools, education agents, supporting services, and approximately 1,200 beds for domestic and international students.
A subsidiary of CIBT will earn a development fee customary to CIBT’s business model. CIBT plans to hold a minimum of 20% equity interest in the LP. An entity within the CIBT group of companies has guaranteed the LP’s obligation to pay the first four deposits required to be made under the PDA totaling $45 million.
The Complex will be located on a main traffic artery across the street from a SkyTrain station, and will include retail shopping space for the convenience of all residents living at the Complex, both students and non-students. A deposit of $65 million will be paid by the LP over a period of 9 months. Rezoning for the Complex is well underway, and construction is scheduled to begin during the Fall of 2018.
CIBT is also pleased to report that $5 million in cash investment has been received and that the LP has received confirmations of interest from several accredited investors to invest $65 million into this project.
On October 3rd, 2016, CIBT reported the purchase of five parcels of land for $17 million as the future site of the GEC Education Super Center®. In light of this latest transaction described above, the Company plans to dispose of these five parcels of land for a moderate profit as the current market price for the area has steadily increased since the purchase. A large portion of the profit generated from the sale is expected to be re-invested into this newest Global Education City® project.
“We are pleased to be expanding our Global Education City® portfolio with significant size and scale,” commented Toby Chu, Chairman, President and CEO of CIBT. “By purchasing $218 million worth of properties within an overall project of $600+ million, we will gain an economy of scale that will allow a reduction in the cost per square foot, increased efficiency and improved resources. Total portfolio value consolidated under the GEC® brand inclusive of projects under development, hotel and serviced apartments in operation, appreciated value and this latest acquisition now exceeds $900 million.”
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 44 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 management company focused on developing education related real estate such as student hotels, serviced apartments and Education Super Centres totalling over $600 million. 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.
Toby Chu
Chairman, President and Chief Executive Officer
CIBT Education Group Inc.
Investor Relations Contact: 1-604-871-9909 extension 318 or | Email: info@cibt.net
Forward-Looking Statements:
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 planned budget, size and composition of the project, the expected start of construction, the LP’s ability to complete the purchase described herein, and the expected proceeds from the sale of the five parcels of land previously purchased for the planned GEC Education Super Center®. The 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 of the LP to raise the required funds from the sale of equity and to raise the necessary commercial debt financing on acceptable terms, usual construction risks, the ability to obtain all required municipal approvals, the market demand for the new Global Education City® project and the market demand for the five parcels of land planned to be sold. 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.