TORONTO--(BUSINESS WIRE)--Dream Industrial REIT (TSX: DIR.UN) (“Dream Industrial”, “DIR”, or the “Trust”) in response to news reports, confirms that it is in advanced discussions with a third party with regards to the acquisition of shares of a corporation that owns a portfolio of 31 institutional quality, logistics properties across Europe valued at approximately €880 million or C$1,300 million (the "Portfolio")(1). The properties are primarily located in Germany, the Netherlands and France. The Portfolio totals approximately 8.9 million square feet, is 100% occupied, has a 5.3 year weighted average lease term and has an average clear height of approximately 35 feet. The portfolio also has significant excess land offering intensification opportunities in excess of 1 million square feet. All the assets are well located in their respective geographies, with easy access to transportation networks and are well poised for growth in income and value.
On January 22, 2020, Dream Industrial REIT announced its expansion into the European light industrial and logistics market by leveraging Dream’s existing local European acquisition and asset management team along with long-standing relationships with the European real estate community. Over the past 15 months, despite challenges arising from the COVID-19 pandemic, the Trust was able to successfully execute on approximately €330 million of high quality and accretive acquisitions in Germany and the Netherlands that will deliver long-term cash flow and net asset value growth to the Trust.
The Trust believes this Portfolio provides a unique and transformational opportunity to accelerate its European expansion strategy, which enhances its institutional asset management, leasing and in-house development platform. This platform will enable the Trust to source and execute on acquisitions and value-add opportunities that are of higher quality and can provide higher returns to our unitholders. Additionally, the Trust has identified a significant development and redevelopment pipeline within the portfolio on which it can execute in the near to mid-term.
The Portfolio has approximately $500 million of in place debt. The Trust has considerable liquidity available to it today to fund the transaction including $150 million of cash and $350 million of capacity on its revolving line of credit. The Trust is also in advanced negotiations on various dispositions and joint venture strategies, primarily involving its U.S. portfolio, and anticipates it will repatriate over $250 million of equity at values in excess of IFRS carrying values in the near term. However, the Trust intends to issue unsecured bonds, which after swapping to euros, based on current all-in rates would be well below 1% on average for terms up to 7 years to optimize the permanent financing of the Portfolio. The Trust may also opportunistically raise equity while maintaining leverage within its previously communicated target range of mid to high 30%.
The Trust believes the acquisition of the Portfolio will expedite Dream Industrial REIT’s goal of becoming the premier investment vehicle for TSX investors to access a European logistics portfolio of quality and scale in addition to its presence primarily in Canada.
The Trust anticipates that, if an agreement is entered into, the transaction will close in the next 60 days.
There is no assurance that any agreement or transaction will be entered into and, if so, on what terms. Unless and until such time as Dream Industrial REIT has a transaction to announce, Dream Industrial REIT does not intend to make any further comment.
About Dream Industrial Real Estate Investment Trust
Dream Industrial REIT is an unincorporated, open-ended real estate investment trust. As at March 31, 2021, Dream Industrial REIT owns and operates a portfolio of 186 industrial assets (280 properties) comprising approximately 28.8 million square feet of gross leasable area in key markets across North America and a growing presence in strong European industrial markets. Dream Industrial REIT’s objective is to continue to grow and upgrade the quality of its portfolio and to provide attractive overall returns to its unitholders. For more information, please visit www.dreamindustrialreit.ca
Forward Looking Information
This news release may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans”, or “continue”, or similar expressions suggesting future outcomes or events. Some of the specific forward-looking information in this news release may include, among other things, statements regarding our potential acquisition of the Portfolio and the terms and conditions upon which any such transaction may take place; the timing of any acquisition of the Portfolio; the ability of our recent acquisitions to deliver long-term cash flow and net asset value growth to the Trust; the Trust’s ability to accelerate our European expansion strategy; the Trust’s ability to source and execute on acquisitions and value-add opportunities that are of higher quality that provide higher returns to unitholders; the Trust’s development and acquisition opportunities and pipeline; the Trust’s disposition and joint venture strategies; the Trust’s plans to issue unsecured bonds, and the terms of such bonds; and the Trust’s plans with respect to raising equity and future leverage levels. Forward looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream Industrial REIT’s control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, global and local economic and business conditions; uncertainties surrounding the COVID19 pandemic; failure to obtain required approvals for development projects; timing of when we are able to repay indebtedness; interest and currency rate fluctuations; and the risk that there may be unforeseen events that cause the Trust’s actual capital structure, overall cost of debt and results of operations to differ from what the Trust currently anticipates. Our objectives and forward-looking statements are based on certain assumptions with respect to each of our markets, including that the general economy remains stable, the gradual recovery and growth of the general economy continues over the remainder of 2021, interest rates remain stable, conditions within the real estate market remain consistent, competition for and availability of acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forward-looking information in this news release speaks as of the date of this news release. Dream Industrial REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise except as required by law. Additional information about these assumptions and risks and uncertainties is contained in Dream Industrial REIT’s filings with securities regulators, including its latest annual information form and MD&A. These filings are also available at Dream Industrial REIT’s website at www.dreamindustrialreit.ca.
1. All figures are presented in Canadian dollars, unless otherwise noted. If applicable, converted at the respective foreign exchange rate as at May 18, 2021.