Dundee REIT to sell industrial portfolio through an IPO of Dundee Industrial REIT
Dundee REIT announced that it intends to sell its industrial properties to Dundee Industrial REIT, a newly formed real estate investment trust, which intends to file a preliminary prospectus in respect of its initial public offering in all Provinces of Canada. The portfolio consists of 86 light industrial properties comprising 6.6 million square feet of gross leasable area located in key industrial markets across Canada that are currently owned or co-owned by Dundee REIT.
Included in the portfolio are 16 properties that are currently co-owned with certain limited partnerships that are affiliates of Return on Innovation Capital Ltd. Concurrently with the completion of the initial public offering, a subsidiary of Dundee Industrial REIT will also acquire the co-ownership interests in the 16 properties for approximately $158.8 million, to be satisfied by a combination of cash and the assumption of debt. The purchase is conditional on completion of the initial public offering of Dundee Industrial REIT.
Dundee REIT believes that the sale of the industrial properties portfolio through the initial public offering by Dundee Industrial REIT will provide Dundee REIT with an attractive purchase price for its industrial properties portfolio and complete its previously announced transformation into a pure-play office REIT. Following closing, Dundee Properties Limited Partnership and its subsidiaries are expected to own a significant interest in Dundee Industrial REIT of not more than 50 per cent. By retaining an ownership interest in Dundee Industrial REIT, Dundee REIT will continue to benefit from the strength of this sector and participate in growth opportunities that arise from the operation of a dedicated industrial REIT.
On closing, Dundee Industrial REIT will be the largest real estate investment trust in Canada to focus primarily on industrial real estate assets. Scott Hayes will be the President and Chief Executive Officer and Mario Barrafato will be the Chief Financial Officer of Dundee Industrial REIT.