Granite Real Estate Investment Trust (“Granite”) (TSX: GRT.UN
/ NYSE: GRP.U) announced today that it has acquired two income
producing properties and has agreed to acquire three development
properties, together comprising approximately 2.5 million square
feet (“SF”) at a combined purchase price of approximately C$246.7
million. Collectively, the acquisitions represent an anticipated
stabilized yield of approximately 5.1%.
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330 E. Stateline Rd., Southaven, MS
(Photo: Business Wire)
Granite also announced it has extended its C$300 million term
loan to December 11, 2026 and refinanced the related cross-currency
interest rate swap resulting in Euro-denominated payments at a
1.355% fixed interest rate.
In addition, Granite announced that it has completed the
acquisition of the development property in Dallas, Texas that it
had contractually committed to acquire. Further, on December 4,
2019, Granite completed the disposition of its five western
Michigan assets that were held for sale for gross proceeds of
US$29.5 million.
Kevan Gorrie, Granite’s President and CEO, commented that,
“consistent with our strategy of acquiring and developing modern
e-commerce and distribution facilities in Granite’s target markets,
we expect these acquisitions to further enhance the quality of our
portfolio, deliver stable and growing cash flow and generate net
asset value growth. Further, as evidenced by the recent refinancing
outlined herein, we continue to leverage our unique access to lower
cost Euro-denominated debt to enhance our returns and cash flow.
Following these commitments, we estimate our pro forma liquidity to
be approximately C$650 million.”
330 & 440 E. Stateline Rd., Southaven, Mississippi,
USA
Granite has acquired 330 & 440 E. Stateline Road, two
multi-tenant modern distribution buildings totaling 1.7 million SF,
featuring 32’ clear height and situated on 95 acres of land in
Southaven, Mississippi for US$87.9 million. Constructed in 2005 and
2007, the properties are 81% leased to established tenants for a
remaining weighted average lease term of 5.6 years. The acquisition
closed on December 19, 2019.
The properties are located within 2.0 miles of Memphis
International Airport, the world’s busiest cargo airport and home
to the FedEx World Hub and UPS Airport Facility. The properties
benefit from superior access to Interstate 55, Interstate 22 and
the BNSF Memphis Intermodal Facility.
De Kroonstraat 1 (Tilburg), Francis Baconstraat 4 (Ede), Oude
Graaf 15 (Weert)
Granite has agreed to acquire three state-of-the-art facilities
in the Netherlands for approximately €89 million. Currently under
construction, the properties will be delivered mid-2020, with the
488,000 SF Tilburg property being delivered in two phases,
including a 142,000 SF second phase to be delivered in the first
quarter of 2021. The properties have a combined leasable floor area
of approximately 852,000 SF and include approximately 1.8 acres of
additional land for potential future expansion. The properties are
100% leased to three prominent European tenants for a weighted
average lease term of approximately 11 years.
In line with Granite’s European strategy, the properties are
located in highly-desirable distribution nodes along the main
supply corridor from Rotterdam, Europe’s largest port, to Germany
and continental Europe. Furthermore, the assets are situated in one
of the most densely populated areas in Europe, making them
attractive e-commerce locations. The design of these build-to-suit
properties incorporates several sustainability features, leading
management to expect the properties to receive a BREEAM “Very Good”
certification.
Extension of $300M term loan and refinancing of related
cross-currency interest rate swap
On November 27, 2019, Granite extended its C$300 million term
loan (the “Term Loan”) and refinanced the related cross-currency
interest rate swap (the “Euro Swap”). The Term Loan, with an
original maturity date of December 12, 2025, has been extended for
one year, on the same terms, to December 11, 2026. Concurrently,
the previously existing Euro Swap was terminated and Granite
entered into a new seven-year cross-currency interest rate swap
resulting in Euro-denominated payments at a 1.355% fixed interest
rate, approximately 85 basis points lower than the previous rate.
The refinancing is expected to result in interest expense savings
of approximately C$2.3 million, or C$0.04 of funds from operations
per unit, annually.
1301 Chalk Hill Road, Dallas, Texas
On November 19, 2019, Granite acquired 1301 Chalk Hill Road, a
state-of-the-art, 2.3 million SF, multi-level e-commerce
fulfillment centre, situated on 101 acres of land in Dallas, Texas.
The newly constructed property is 100% leased to a leading global
e-commerce provider for an initial lease term of 20 years. The
previously-announced acquisition closed on November 19, 2019.
The completed acquisitions were funded using cash on hand and
the acquisition of the European properties will be funded from
Granite’s available liquidity.
About Granite
Granite is a Canadian-based REIT engaged in the acquisition,
development, ownership and management of industrial, warehouse and
logistics properties in North America and Europe. Granite owns over
90 rental income properties representing approximately 40 million
square feet of leasable area.
Other Information
Copies of financial data and other publicly filed documents
about Granite are available through the internet on the Canadian
Securities Administrators’ Systems for Electronic Document Analysis
and Retrieval (SEDAR) which can be accessed at www.sedar.com and on
the United States Securities and Exchange Commission’s Electronic
Data Gathering, Analysis and Retrieval System (EDGAR) which can be
accessed at www.sec.gov.
For further information, please see our website at
www.granitereit.com or contact Teresa Neto, Chief Financial
Officer, at 647-925-7560 or Andrea Sanelli, Manager, Legal &
Investor Services, at 647-925-7504.
Forward Looking Statements
This press release may contain statements that, to the extent
they are not recitations of historical fact, constitute
“forward-looking statements” or “forward-looking information”
within the meaning of applicable securities legislation, including
the United States Securities Act of 1933, as amended, the United
States Securities Exchange Act of 1934, as amended, and applicable
Canadian securities legislation. Forward-looking statements and
forward-looking information may include, among others, statements
regarding the expected timing of the closing of the European
acquisitions, the expected stabilized yield of the Mississippi and
European acquisitions and impact of such acquisitions on Granite’s
cash flow and net asset value growth, the expected impact of the
extension of the Term Loan and refinancing of the Euro Swap on
Granite’s liquidity and interest expense obligations, the expected
BREEAM certification of the European acquisition properties,
Granite’s intention and ability to make future investments and
acquisitions and Granite’s plans, goals, strategies, intentions,
beliefs, estimates, costs, objectives, economic performance,
expectations, or foresight or the assumptions underlying any of the
foregoing. Words such as “may”, “would”, “could”, “will”, “likely”,
“expect”, “anticipate”, “believe”, “intend”, “plan”, “forecast”,
“project”, “estimate”, “seek”, “objective” and similar expressions
are used to identify forward-looking statements and forward-looking
information. Forward-looking statements and forward-looking
information should not be read as guarantees of the closing of the
European acquisitions, the expected stabilized yield of the
Mississippi and European acquisitions and impact of such
acquisitions on Granite’s cash flow and net asset value growth, the
expected impact of the extension of the Term Loan and refinancing
of the Euro Swap on Granite’s liquidity and interest expense
obligations, the expected BREEAM certification of the European
acquisition properties, Granite’s intention and ability to make
future investments and acquisitions or other events, performance or
results and will not necessarily be accurate indications of whether
or the times at or by which such impact of the acquisitions or
other events or performance will be achieved. Undue reliance should
not be placed on such statements. Forward-looking statements and
forward-looking information are based on information available at
the time and/or management’s good faith assumptions and analyses
made in light of its perception of historical trends, current
conditions and expected future developments, as well as other
factors management believes are appropriate in the circumstances,
and are subject to known and unknown risks, uncertainties and other
unpredictable factors, many of which are beyond Granite’s control,
that could cause actual events or results to differ materially from
such forward-looking statements and forward-looking information.
Important factors that could cause such differences include, but
are not limited to, the risks set forth in the annual information
form of Granite Real Estate Investment Trust and Granite REIT Inc.
dated March 6, 2019 (the “Annual Information Form”). The “Risk
Factors” section of the Annual Information Form also contains
information about the material factors or assumptions underlying
such forward-looking statements and forward-looking information.
Forward-looking statements and forward-looking information speak
only as of the date the statements and information were made and
unless otherwise required by applicable securities laws, Granite
expressly disclaims any intention and undertakes no obligation to
update or revise any forward-looking statements or forward-looking
information contained in this press release to reflect subsequent
information, events or circumstances or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191220005232/en/
Teresa Neto, Chief Financial Officer 647-925-7560 or Andrea
Sanelli, Manager, Legal & Investor Services 647-925-7504.
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