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

Michelle Zhu
Published Mon, Nov 7, 2022 · 04:43 PM

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).

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

VIEW ALL

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.

KEYWORDS IN THIS ARTICLE

READ MORE

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to  t.me/BizTimes

International

SUPPORT SOUTH-EAST ASIA'S LEADING FINANCIAL DAILY

Get the latest coverage and full access to all BT premium content.

SUBSCRIBE NOW

Browse corporate subscription here