TORONTO, ONTARIO–(Marketwired – May 16, 2017) – DREAM GLOBAL REIT (TSX:DRG.UN)(FRANKFURT:DRG) today announced that it has completed the acquisition of all the shares issued by SPE III Runway SPRL, a Belgian entity that holds as its main asset Airport Plaza, a multi-tenant office complex located in Brussels, Belgium. The purchase price was approximately EUR95.9 million ($143.0 million), representing a going in capitalization rate of 7.1%. The purchase price was funded with proceeds from the Trust’s March equity offering and its revolving credit facility. The REIT is in negotiations to place long-term mortgage financing for a term of up to seven years and an interest rate of approximately 1.8% based on the current market rates. The acquisition further expands the REIT’s geographic presence which also includes properties throughout Germany as well as in Vienna.
The Trust remains in exclusive negotiations on an additional acquisition in Stuttgart, Germany, which is expected to close by the end of Q2 2017. Following this acquisition, the Trust will have fully deployed the proceeds raised in its most recent public offering of units.
“We are excited to have entered into the compelling Brussels market with this high-quality acquisition,” said Jane Gavan, Chief Executive Officer of Dream Global REIT. “Brussels, headquarters of the European Union, is amongst the largest office markets in Europe and a strategic location for many multinational companies, making it an ideal location for the Trust’s expansion. We have now entered into our second market outside of Germany, further solidifying our reputation as a local European investor with a strong management platform.”
Corporate Gateway and International Hub – Belgium is centrally located in Europe and is a corporate gateway serving as the European and regional headquarters for many international companies. Belgium boasts a robust and highly developed transportation network, with extensive connections to neighbouring countries, including Germany. The capital city of Brussels is a top six European office market, a preferred location for international organizations and among the largest global centres for international cooperation, serving as the headquarters for both NATO and the European Union. Brussels is at the heart of one of the wealthiest regions in Europe and has office inventory totalling 143 million square feet, comparable in size to Hamburg or Frankfurt in Germany. For reference, Brussels ranks behind only Toronto in terms of total office market size relative to Canadian cities.
Airport Plaza, Brussels: http://media3.marketwire.com/docs/1094931.jpg
“With strong corporate demand, a rising rent environment and compressing yields, Brussels shares similar favourable characteristics with both Germany and Vienna,” said Alex Sannikov, SVP Commercial Properties. “We have been looking for opportunities to enter this market and believe that Airport Plaza is an excellent first step, with a strong yield and great tenant roster.”
Well Located Suburban Office Complex with Strong Diversified Tenant Base – Airport Plaza was built in 2011 and is currently 97% occupied, with a weighted average lease term of 8.1 years. The complex consists of five multi-story office buildings with underground parking, totalling 387,500 square feet of gross leasable area. The buildings are linked by means of a shared lobby, providing internal access to restaurants and amenities. In addition, the complex features significant outdoor amenities including terraces and patios located at grade level as well as on several rooftops. Airport Plaza has obtained BREEAM environmental certification in recognition of the sustainability of the complex.
The complex is located in the Airport district, a preferred location for many international companies that offers lower corporate tax, convenient access and rent advantages relative to the inner city. Airport Plaza is home to a high-profile tenant base that includes Samsung, Levi Strauss, Air Products, Estée Lauder, Sanofi, McDonalds, Chevron and NN Belgium (the insurance arm of ING). The property is situated next to the Brussels International Airport with excellent access to major motorways and public transportation.
Dream Global REIT is an unincorporated, open-ended real estate investment trust that provides investors with the opportunity to invest in commercial real estate exclusively outside of Canada. Dream Global REIT’s portfolio currently consists of approximately 13.3 million square feet of gross leasable area of office, industrial and mixed-use properties across Germany, Austria and Belgium. For more information, please visit www.dream.ca/global.
This press release may contain forward-looking information within the meaning of applicable securities legislation, including statements regarding expected interest expense savings. 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 Global 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; the financial condition of tenants; our ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest and currency rate functions. Our objectives and forward-looking statements are based on certain assumptions, including that the Canadian and European economies remain stable, interest rates remain stable, conditions within the real estate market remain consistent, competition for 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 press release speaks as of the date of this press release. Dream Global 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 Global REIT’s filings with securities regulators, including its latest annual information form and MD&A. These filings are also available at Dream Global REIT’s website at www.dreamglobalreit.ca.
President and Chief Executive Officer
Chief Financial Officer
Senior Vice President, Commercial Properties