Dream Industrial REIT and GIC to acquire Summit Industrial Income REIT

Canada-based Dream Industrial Real Estate Investment Trust (DIR) and Singapore’s sovereign wealth fund GIC through their joint venture (JV) Canadian Industrial JV have agreed to acquire Summit Industrial Income REIT in an all-cash transaction valued at approximately C$5.9 billion ($4.4 billion), including debt.

Summit Industrial Income REIT is a Canadian open-ended mutual fund real estate investment trust (REIT). Its shareholders will receive $23.5 ($17.54) per unit from the buyers.

Dream Industrial Real Estate Investment Trust will acquire a 10% stake in Summit Industrial Income REIT for nearly C$470 million ($350.8 million). The remaining 90% of Summit Industrial Income REIT will be owned by GIC.

Through the acquisition, Dream Industrial Real Estate Investment Trust anticipates increasing its footprint in the Canadian industrial market, diversifying revenue streams, and introducing a new source of growth capital.

With a total gross leasable area (GLA) of 43 million square feet, Dream Industrial Real Estate Investment Trust will also more than double the scale of its Canadian industrial portfolio under management.

Brian Pauls — Dream Industrial Real Estate Investment Trust CEO said: “Combining with Summit will add scale and quality to our Canadian platform and amplify our fee generation business.

“The commitment from GIC, a best-in-class, global sovereign wealth fund investor, to partner with DIR on this large-scale transaction is a testament to the quality of our employees, platform, and vision as a leader in the Canadian industrial space.

“This transaction will provide DIR with the ability to grow accretively with a more diversified source of growth capital.”

Dream Industrial Real Estate Investment Trust said that its proforma exposure by owned GLA will be nearly 53% in Canada, 6% in the US, and 41% in Europe.

The acquisition of Summit Industrial Income REIT will also augment Dream Industrial Real Estate Investment Trust’s total development pipeline to 11.1 million square feet from 6.5 million square feet.

Dream Industrial Real Estate Investment Trust after the closing of the deal will manage 69 million square feet in total in Canada, the US, and Europe. This includes 32 million square feet on behalf of its institutional clients across North America.

The Canadian REIT is planning to finance the transaction through cash, available liquidity, and debt.

Subject to customary conditions, including Summit Industrial Income REIT’s unitholder, court, and regulatory approvals, the deal is expected to close in Q1 2023.