Real Estate — November 6, 2012

Melcor Reports Third Quarter Earnings For 2012 and Declares $0.23 Dividend

EDMONTON, ALBERTA--(Marketwire - Nov. 6, 2012) - Melcor Developments Ltd. (TSX:MRD), an Alberta-based real estate development company, today reported net income of $49.55 million or $1.65 per share (basic) on revenue of $132.97 million for the nine months ended September 30, 2012. These figures represent growth in net income and revenues of 68% and 46% respectively over 2011 results for the same period. Earnings include net fair value gains of $29.30 million, primarily from the Investment Property division, where changes in capitalization rates on certain office properties and higher leasing activity contributed $23.24 million to these fair value gains.

Third quarter net income was $24.83 million or $0.83 per share (basic) on revenue of $64.67 million compared to net income of $21.14 million or $0.70 per share (basic) on revenue of $41.45 million in the third quarter of 2011.

Funds from operations (FFO) per share was $0.53 per share in Q3-2012, an increase of $0.19 per share, or 56% from the same quarter last year. FFO per share adjusts for all non-cash earnings items included in income such as fair value adjustments on investment properties and stock based compensation expense.

Brian Baker, Melcor's President and COO, reported on the quarter: "We had a successful development season and healthy sales and leasing activity throughout the third quarter, all of which led to strong results. In addition, we continue to build for the future and have received approvals on a number of key projects. These approvals ensure that a steady pipeline of 'shovel-ready' assets remains available to the company. We are in a good position for a strong finish to 2012 and we are optimistic about our future opportunities as we approach 2013."

Highlights for Q3-2012 include:

  • The Community Development division had a strong quarter with revenue of $47.57 million, a 56% increase from Q3-2012. Year-to-date single-family lot sales totalled 613, 49% more than the same period of 2011. Lot sales in Red Deer, Calgary and Lethbridge were particularly strong.
  • The Community Development division also completed land acquisitions in the third quarter of 2012, adding 233 acres of land strategically located near our existing land holdings in St. Albert and Red Deer.
  • The Investment Properties division's retail, commercial and office portfolio continues to grow in size and operating profitability. During the quarter, Melcor negotiated a 7-year fixed rate loan at 3.32% for $8.25 million on a neighbourhood commercial centre in Edmonton, Alberta.
  • The Property Development division completed construction on 44,000 sq. ft. in leasable space in the quarter and expects to complete construction on a number of projects by the end of the year.
  • The Recreational Properties division had a successful golf season, with a 7% increase in the number rounds played compared to 2011.

Melcor's Board of Directors declared a semi-annual dividend of $0.23 per share, payable on December 28, 2012 to shareholders of record on December 14, 2012.

About Melcor Developments Ltd.

Melcor is a diversified real estate development and management company with a rich heritage of integrity and innovation in real estate since 1923.

Through four integrated operating divisions, Melcor manages the full life cycle of real estate development: from acquiring raw land, to community planning, to construction and development, to managing leasable office, retail and residential sites. We develop and manage mixed-use residential communities, business and industrial parks, office buildings, retail commercial centres and golf courses.

Our headquarters are in Edmonton, Alberta, with regional offices throughout Alberta and British Columbia. Our developments span western Canada and the US. We have been publicly traded since 1968 (TSX:MRD).

FFO is a non-IFRS measure used in this Press Release that does not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and is therefore unlikely to be comparable to similar measures presented by other issuers. This non-IFRS measure is more fully defined and discussed in Melcor's management's discussion and analysis of the Company for the nine-months ended September 30, 2012.

Contact Information

Melcor Developments Ltd.
Business Contact
Brian Baker
President & COO
(780) 423-6931

Melcor Developments Ltd.
Investor Relations
Jonathan Chia, CA
VP Finance & CFO
(780) 423-6931
www.melcor.ca

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