GIC joint venture to acquire Canada’s Summit Industrial Income Reit

SINGAPORE sovereign wealth fund GIC is partnering Dream Industrial Real Estate Investment Trust (Reit) to acquire Summit Industrial Income Reit. It will offer unitholders a cash consideration of C$23.50 (S$24.45) per unit by way of a special distribution and a redemption of units.

Both Reits are listed on the Toronto Stock Exchange, and the deal is expected to complete in Q1 2023.

The transaction’s total value is estimated to be CS$5.9 billion after assuming certain debt. According to Reuters’ calculations based on Summit’s 189.85 million outstanding units as at Jun 30, the deal value is estimated to be some C$4.5 billion excluding debt.

Under the 90:10 joint venture (JV) partnership between GIC and Dream Industrial Reit, a subsidiary of Toronto-listed real estate manager and developer Dream Unlimited Corporation will serve as the JV asset manager.

Dream Industrial Reit has committed to provide property management, accounting, construction management and leasing services to the JV “at market rates”.

Both the Reit and developer intend to continue employing the majority of Summit employees following completion of the transaction, the two entities said in a joint statement with GIC and Summit on Monday (Nov 7).

SEE ALSO

GIC, ESR establish US$600m joint venture to invest in India’s logistics assets

GIC says global recession scenario possible, eyes Australia opportunities

GIC seeks Japan property deals as yen falls and tourists return

Singapore’s sovereign fund helps create Thailand’s latest unicorn

GIC buys into Sani/Ikos, valuing resorts group at 2.3b euros

More

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

The cash consideration of C$23.50 represents a premium of 31.1 per cent to Summit closing price on Nov 4, 2022; a premium of 33.4 per cent to the Reit’s 20-day volume weighted average price till Nov 4; and a 19.5 per cent premium to the Reit’s current equity research consensus net asset value estimate at C$19.66 per unit.

Highlighting Summit’s “premier portfolio of industrial properties defined by strong sector fundamentals, resilient cash flows, and stable market rent growth in key markets across Canada”, GIC’s head of Americas real estate Adam Gallistel sees the Reit as “another strong addition” to the sovereign wealth fund’s global real estate portfolio.

“Through our partnership, Summit’s assets will be positioned for continued success,” said Lee Kok Sun, chief investment officer of real estate at GIC.