TORONTO, Sept. 16, 2019 /CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT") (TSX: SMU.UN) announced today that it has waived conditions and will acquire 100% of a brand new single tenant light industrial property and 100% of a second recently constructed multi-tenant light industrial property totaling 431,930 square feet in a newly-created industrial park with frontage on The Hanlon Expressway near Highway 401 in Guelph, Ontario. Summit will pay $57.0 million in cash for the two properties, funded by its recently completed bought-deal equity offering, generating a going-in capitalization rate of approximately 5.4%. Both properties are 100% occupied. Closing is anticipated on or before the end of September 2019.
Summit is also acquiring a 50% interest in 49 acres of development land in the same industrial park for $13.8 million and entering into a 50/50 joint venture partnership with Cooper Construction Limited, a well- respected real estate development and construction company, to fully develop the property adding an estimated 774,000 square feet of Class A light industrial space over the next few years. There are currently two buildings under construction in the park which, when completed, will total 386,929 square feet. Summit will acquire the remaining 50% interest in these two buildings and own 100% once completed and leased. Summit also has the option to acquire 100% of additional buildings being developed over time under the joint venture partnership as they are completed and leased.
"We are very pleased to be expanding our presence in the Greater Toronto Area region with these well-located properties," commented Paul Dykeman, Chief Executive Officer. "We are purchasing new buildings with strong tenants and acquiring a 50% interest in development lands at a cost significantly less than comparable and more centrally land located in the GTA. We are also pleased to be entering into a joint venture partnership with a proven developer to build-out the remaining space over the next few years, generating very accretive returns for our Unitholders."
Including its interest in the two Guelph industrial park developments, Summit currently has approximately 685,000 square feet under development primarily located within the GTA region with significant future additional growth opportunities on owned land and property expansions.
"At Summit we have significant and proven expertise in developing light industrial properties. These investments can generate much stronger capitalization rates and returns for our Unitholders in comparison to acquiring properties," Mr. Dykeman continued. "However, we will maintain our conservative approach to development and limit these investments to under 10% of our total assets."
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.
About Cooper Construction
Founded in 1905, Cooper Construction is an Ontario based best-practices real estate development and construction company specializing in design/build construction, construction management, turn-key leasing and property management. Over the last 10 years, Cooper has managed the development and/or construction of over 20,000,000 square feet of industrial and suburban office space. For more information please visit www.coopercon.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: Paul Dykeman, CEO at (902) 405-8813 [email protected]