Armel Corporation

Privately held, Armel Corporation is a leading residential and commercial property developer in suburban Canadian markets. Founded in 1956, the Company builds integrated residential and commercial developments. Including projects now underway, Armel has developed more than 20,000 residential units and 1.5 million square feet of shopping centre and other commercial space. The Company has generated positive cash flow since its founding.

Market value of real estate assets (approx.): $250 million
Operating regions : Ontario, Alberta and Florida
Commercial rentable area, including developmentpipeline (approx.): 1.5 million square feet
Key commercial tenants:

Brewers Retail, Imperial Oil, KFC,
Loblaws, Rogers, Royal Bank,
Shoppers Drug Mart, Subway Restaurants, Tim Horton's, Winners.

Commercial occupancy rate (Dec. 2005): 95%
Residential development pipeline (to 20) 4 locations, comprising of 1200 residential units
Raw land inventory (approx.): 2,000 acres (in Ontario and Alberta)

Corporate History

Since its founding in 1956, Armel has focused on building large-scale planned communities that combine full-cycle residential development with commercial development and ongoing property management. In particular, the Company has planned, zoned, serviced and delivered more than 20,000 residential lots, and has built, acquired or is now developing shopping centres and other commercial property exceeding a total of 2 million square feet, including properties that have since been sold. This total includes more than 1,000,000 square feet of shopping centre space in southern Ontario; a further 500,000 square feet of shopping centre space is now in active development with most anchor tenants already identified.

In the 1980s, Armel acquired the shopping centre properties of Deltona Corporation, subsequently developing an additional 1,000,000 square feet of new shopping centre space in south Florida.

Since 2001, Armel has developed and sold more than 2,000 residential lots, and built 3 shopping centres and other commercial properties comprising 750,000 square feet. The Company expects to maintain its growth through ongoing development of its 2,000 acre land inventory. As attractively-priced land parcels become available, further purchases will be made.

Market Opportunity

Armel is positioned to capitalize on the notably attractive growth prospects for central Alberta, south-central Ontario and northern Florida. Over the next five years, population growth in these regions is forecasted to substantially outstrip the Canadian average, as Alberta benefits from the energy boom while the GTA and surrounding areas continue to be a magnet for business and immigration.

The long-term demographic trend together with the climate and relative value of land in northern Florida portends great promise for this market. The Company’s prospects will also benefit from the ongoing penetration of US-based retail chains into Canada.

When viewed in conjunction with positive overall economic projections, Armel expects to continue its growth, capitalizing particularly on its financial strength and its record of success in creating and marketing integrated residential and commercial developments.

Growth Strategy

Armel’s growth strategy starts with the identification and purchase of land, and proceeds to an overall plan for development, with residential properties providing a natural customer base for related shopping centres and other commercial development.

This approach has delivered consistent profits and the cash flow necessary to build a growing project pipeline. Including projects already underway, Armel plans to build 4 communities with a total of 1,500 residential units over the next five years.