By Mario Marroquin
A syndicate of Singapore sovereign wealth fund GIC and Dream
Industrial REIT of Toronto penned a $4.4 billion acquisition of Canadian Summit
Industrial income REIT this week. GIC and Dream Industrial agreed to acquire
Summit in an all-cash transaction that includes the assumption of some of
Summit’s outstanding debts and a 21.6 million-square-foot portfolio of
industrial properties largely in Ontario, British Columbia and Alberta.
A prepared statement from GIC says Summit unitholders will
receive $23.50 per unit, which according to GIC represents a 31.1% premium to
Summit’s closing price November 4.
GIC and Dream Industrial will form a limited partnership
with a 90% – 10% ownership structure, respectively and a subsidiary of Dream
Unlimited Corporation will be the asset manager for the joint venture.
A ratings report from DBRS Mornigstar said the purchaser “will
assume Summit’s outstanding Senior Unsecured Debentures amounting to $925
million, and intends to assume Summit’s existing mortgages, subject to lender
consent.
“As backstop for nonconsenting mortgage lenders, the joint venture
has arranged committed bank financing. The purchaser will also have access to a
new $400 million committed revolving credit facility for future liquidity
requirements, which is expected to be largely undrawn at closing.”
Reuters reported the deal will more than double the scale of
Dream Industrial’s portfolio under management in Canada and that Summit’s total
net book value approached $US$5 billion by June 30.
The acquisition by GIC and Dream Industrial comes one week
after the sovereign wealth fund from Singapore set up a $600 million joint
venture with UK investment manager ESR Group to buy industrial and logistics
assets in India.
GIC and Oak Street Real Estate Capital, a division of Blue
Owl Capital, also agreed to acquire STORE Capital in September for US$14
billion in September.
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