MI Developments (MIM) Completes Strategic Review, Outlines 5 Areas of Improvement

MI Developments Inc. (NYSE: MIM) has completed its previously announced strategic review process and unanimously approved a strategic plan that encompasses the following major elements and objectives:

1. Convert MID from a Canadian corporation to a Canadian Real Estate Investment Trust.
   
   
2. Increase the Company's quarterly dividend to US$0.50 per share to reflect a targeted annualized dividend of US$2.00 per share.
   
   
3. Fortify MID's relationship with Magna International Inc. (NYSE: MHA) by selectively investing in MID properties and opportunistically growing with Magna in new strategic locations.
   
   
4. Diversify by significantly increasing the lease revenue derived from new industrial tenants and reducing the proportion of capital invested in Magna properties to less than 50% within approximately three years.
   
   Increase leverage to 40% to 50% of total capital.

The conversion to a REIT (which will take place pursuant to a statutory plan of arrangement) will require shareholder and court approval, and satisfaction of certain regulatory requirements and other conditions. Although the REIT structure further improves the tax efficiency of MID's business, none of the other elements of the strategic plan are contingent upon the REIT conversion.

The revised dividend policy is expected to maintain financial capacity for MID to grow or reinvest in its portfolio.

The Company anticipates growth opportunities with Magna including the expansion of certain facilities currently owned by MID as well as the construction of new facilities.

The planned diversification will be global in nature, targeting favourable tax jurisdictions and focusing on acquiring manufacturing and industrial buildings leased to tenants outside the automotive sector. MID will be price disciplined in its acquisition approach and also intends to explore strategic partnerships with counterparties that can provide local capital, market intelligence and commercial opportunities.

By increasing financial leverage to 40% to 50% of total capital, the Company believes it can benefit from a lower blended cost of capital, provide some natural hedging against currency fluctuations, and efficiently pursue its accretive diversification strategy.

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