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Artis looks south for best acquisition opportunities

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ARTIS Real Estate Investment Trust will continue to aggressively pursue acquisition opportunities in 2013, particularly south of the border, its top executive said Friday.

Armin Martens, the Winnipeg-based REIT's president and chief executive officer, said Artis doesn't expect to match last year's record-breaking performance; it added nearly $1 billion worth of new commercial properties to its rapidly expanding portfolio.

He said the company typically sets a target of between $400 million and $600 million in acquisitions per year, and this year is no exception.

"But it will depend on opportunities and the market conditions," he added. "It could be more than that."

That was the initial target for 2012 and the company ended up acquiring $990.3 million worth of properties.

While Artis will look for investment opportunities in both Canada and the United States, Martens told industry analysts the best opportunities may be south of the border.

He said the U.S. real-estate sector continues to improve, the U.S. economy is expected to outperform the Canadian economy this year, and real-estate prices are cheaper and property yields higher in the U.S. than in Canada right now. "In a perfect world, we'd like to buy more in Canada or even all in Canada," he said. "But it (buying U.S. properties) is an excellent value proposition (at the moment)."

Artis hosted a conference call with analysts on Friday to discuss its yearly and fourth-quarter (Q4) financial results for 2012.

The company saw its Q4 funds from operations (FFO) -- the term trusts use to indicate their financial performance -- jump by 37.3 per cent to $39.4 million, or 34 cents per unit, from $28.7 million, or 33 cents per unit in the same period in 2011.

And its FFO for the year jumped by 40.2 per cent to a record $140.1 million, or $1.30 per unit, from $99.9 million, or $1.21 per unit.

"We feel it was a great quarter and great year," chief financial officer Jim Green told analysts.

"And I think 2013 will be another very good year to be in the business we're in," Martens added.

He said Minneapolis and Phoenix will continue to be the company's primary target markets in the U.S. But it's also watching for acquisition opportunities in other cities in the U.S. Midwest.

Artis units (AX.UN) trade on the Toronto Stock Exchange and closed Friday down two cents to $16.03.

murray.mcneill@freepress.mb.ca

Republished from the Winnipeg Free Press print edition March 2, 2013 B5

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