2018 Lease Renewals Complete with Strong 92.5% Retention Rate, Occupancy Rising to 99.3%
TORONTO, Sept. 27, 2018 /CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT") (TSX: SMU.UN) provided an update on its leasing activities to date. As of today, all 2018 lease renewals totaling 398,492 square feet have now been completed with a very strong 92.5% retention rate. Overall the 2018 renewals have generated an average 9.5% increase in monthly rents from the expiring rates, with a significant 12.7% increase over expiring rents in the REIT's Greater Toronto Area ("GTA") target market.
Summit has also made significant progress in proactively completing renewals for 484,234 square feet of space expiring in 2019. With these 2019 renewals, only 5.9% of the portfolio now has lease renewals remaining to be completed in 2019. The lease renewals completed to date for 2019 have resulted in an 12.0% increase in rents with a very strong 18.4% increase for the GTA properties. The REIT has also completed the early renewal of 53,253 square feet expiring in 2023. This tenant is adding 49,719 square feet of adjacent space in the property which expires in 2019. This lease renewal and expansion includes a 20% increase in monthly rents for the total 102,972 square feet beginning in November 2019. Including all the lease renewals and expansions completed to date, totaling 985,698 square feet, the renewals have generated an average 10.0% increase over the expiring rents with a 15.2% increase in the GTA.
The REIT has also successfully leased 110,652 square feet of vacant space, with all vacancies in the REIT's Western Canada portfolio now fully leased. Included in this vacancy leasing is 25,500 square feet of vacancy that was in place when the REIT acquired a property in Calgary in July 2018. The increased revenue from this lease will improve the going in yield on the initial cost of the acquisition from 5.86% to 6.90%. With these vacancies leased, occupancy for the total portfolio will rise to approximately 99.3% as of December 31, 2018, up from 98.6% as at June 30, 2018.
"Our success to date in renewing our leases speaks to the significant demand in our target markets, especially in the GTA, the expertise and experience of our team, and the strong relationships we have built with our tenants," commented Paul Dykeman, Chief Executive Officer. "Looking ahead, we believe we will continue to see further progress in proactively renewing leases and expect the increases in rents we are generating to result in very strong organic growth in the years ahead."
Summit Industrial Income REIT is an unincorporated open-end trust focused on growing and managing a portfolio of light industrial properties across Canada. Summit's units are listed on the TSX and trade under the symbol SMU.UN. For more information, please visit our web site at www.summitIIreit.com.
Caution Regarding Forward Looking Information
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "goal" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this news release contains forward looking statements and information concerning the goal to build Summit's property portfolio. The forward-looking statements and information are based on certain key expectations and assumptions made by Summit, including general economic conditions. Although Summit believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Summit can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties include, but are not limited to, tenant risks, current economic environment, environmental matters, general insured and uninsured risks and Summit being unable to obtain any required financing and approvals. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward looking information for anything other than its intended purpose. Summit undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE Summit Industrial Income REIT
For further information: please contact: Paul Dykeman, CEO at (902) 405-8813, [email protected]