VANCOUVER, Oct. 4, 2017 /CNW/ - Pure Industrial Real Estate
Trust (TSX: AAR.UN) (the "Trust") announced today the following
completed transactions:
- $135.7 million previously
announced acquisitions in Mississauga,
Ontario and Montreal,
Quebec;
- $24.0 million previously
announced acquisition in Pickering,
Ontario;
- $32.6 million previously
announced acquisition in Richmond,
British Columbia; and a
- $150 million new unsecured term
loan.
MISSISSAUGA AND MONTREAL ACQUISITIONS
The Trust announced today that it has closed $135.7 million of previously announced
acquisitions comprising four assets totaling 463,623 square feet
("SF") and representing a weighted average going-in capitalization
rate of approximately 5.3%.
Key highlights of the acquisitions include:
- Premier locations: Two of the assets, representing 72%
of the net operating income ("NOI") are located in Mississauga, Ontario, one of the Greater Toronto Area's ("GTA") strongest
industrial markets due in large part to its superior transportation
advantages. These sites have excellent access to 400-series
highways, Pearson International Airport, major rail intermodals and
public transit. The other two assets, representing 28% of NOI, are
located in Montreal with close
proximity to Trudeau International Airport, rail intermodals and
major highways.
- Long-term leases and strong tenant covenant:
The assets were part of a sale-leaseback transaction with TFI
International ("TFI"), a Canadian-based leader in the
transportation and logistics industry, operating across
the United States, Canada and Mexico through its subsidiaries. TFI has
entered into long-term leases at all properties, with a weighted
average lease term of 13.2 years.
- Accretive to AFFOPU: Applying proceeds from the bought
deal equity financing that closed on August
3rd, 2017, the acquisition will be immediately accretive to
the Trust's adjusted funds from operations per unit or
"AFFOPU".
Address
|
City
|
Region
|
GLA (SF)
|
Site
Area
(Acres)
|
Site
Coverage
|
Lease
Term
(yrs)
|
5425 Dixie
Road
|
Mississauga
|
Ontario
|
185,218
|
42.9
|
8.60%
|
15
|
5200 Maingate
Drive
|
Mississauga
|
Ontario
|
100,350
|
16
|
12.60%
|
10
|
3333 Rue
Joseph-Dubreuil
|
Montreal
|
Quebec
|
59,615
|
11
|
12.40%
|
10
|
2355 32e
Avenue
|
Montreal
|
Quebec
|
118,440
|
11
|
24.70%
|
15
|
Total
|
|
|
463,623
|
80.9
|
13.20%
|
13.2
|
The Mississauga and Montreal
Acquisitions closed in September 2017
and were funded with existing cash on hand and with net proceeds
from the Unsecured Term Loan disclosed herein. The remaining two
assets previously disclosed in the July
2017 announcement remain conditional.
GTA EAST ACQUISITION
On August 30, 2017 the Trust
completed the previously announced acquisition of a 190,000 SF
industrial asset and an adjacent 4.5 acre parcel of land located at
1865 & 1875 Clements Rd., Pickering,
Ontario (the "GTA East Acquisition") for a purchase price of
$24.0 million, representing a
going-in capitalization rate of 5.3% and a price per SF of
$118 for the income-producing asset.
The GTA East Acquisition was financed with existing cash on
hand.
RICHMOND ACQUISITION
On September 7, 2017, the Trust
closed the previously announced acquisition of a 268,000 SF
distribution facility located at 16108 Blundell Road in
Richmond, British Columbia (the
"Richmond Acquisition") for a purchase price of $32.6 million, representing a going-in
capitalization rate of 5.9% (inclusive of rental payments related
to a 49-year ground lease with the Vancouver Port Authority) and a
price per SF of $122. The Richmond
Acquisition was financed with existing cash on hand.
UNSECURED TERM LOAN
On September 29, 2017, the Trust
entered into a $150 million unsecured
term loan facility and drew $125
million at closing and has the option to draw the remaining
$25 million within six months (the
"Unsecured Term Loan"). The Unsecured Term Loan matures on
February 28, 2023 and bears interest
at investment grade levels.
IMPACT OF THE TRANSACTIONS
Following the acquisitions and the disposition described herein,
the Trust expects the following changes to the Trust's top 10
tenants as a percentage of total revenue:
|
Pre-Transactions
|
|
|
Post
Transactions
|
FedEx
|
21.3%
|
|
FedEx
|
20.5%
|
IKEA
|
4.9%
|
|
TFI
International
|
8.8%
|
TFI
International
|
4.8%
|
|
IKEA
|
4.8%
|
ContainerWorld
|
3.1%
|
|
ContainerWorld
|
3.0%
|
Kellogg's
|
2.8%
|
|
Kellogg's
|
2.7%
|
Best Buy
|
2.1%
|
|
Best Buy
|
2.0%
|
Toys 'R'
US
|
1.9%
|
|
Toys 'R'
US
|
1.8%
|
K+N.
|
1.6%
|
|
K+N.
|
1.5%
|
HBC
|
1.6%
|
|
HBC
|
1.5%
|
DHL Supply
|
1.6%
|
|
DHL Supply
|
1.5%
|
"Pre Transactions" figures represent the Trust's portfolio as at
Q2 2017 including subsequent events as disclosed in the Trust's
2017 Q2 Financial Statements and Management Discussion and Analysis
dated on Aug 9, 2017, the Richmond
Acquisition as outlined in the news release dated June 15, 2017, the transactions outlined in the
news release dated August 21, 2017,
and excludes assets held for sale.
Following these transactions, the Trust will have completed or
announced year-to-date acquisitions of approximately $682 million and year-to-date asset dispositions
of approximately $159 million.
Pro-forma these transactions, the Trust will have estimated
liquidity of approximately $230
million consisting of cash and available lines.
Kevan Gorrie, President and Chief
Executive Officer, commented, "We are pleased to close the
transactions noted above. The properties represent
exceptional location and scale in key Canadian markets, and they
are leased to leading transportation and logistics providers on
long-term leases, which will provide further stability and growth
to our cash flow and increase our concentration in Toronto and Vancouver, two of our primary target
markets. Furthermore, the new unsecured facility announced
today, on favourable terms in line with investment grade pricing,
will provide additional liquidity for future strategic acquisitions
and development."
ABOUT PURE INDUSTRIAL REAL ESTATE TRUST
The Trust is an unincorporated, open-ended investment trust that
owns and operates a diversified portfolio of income-producing
industrial properties in leading markets across Canada and key distribution and logistics
markets in the United States. The
Trust is an internally managed REIT and is one of the largest
publicly-traded REITs in Canada
that offers investors exposure to industrial real estate assets in
Canada and the United States.
Additional information about the Trust is available at
www.piret.ca or www.sedar.com.
Toronto Stock Exchange – AAR.UN
Non-GAAP Measures:
The Trust prepares and releases unaudited quarterly and
audited consolidated annual financial statements prepared in
accordance with IFRS (GAAP). The Trust may disclose and discuss
certain non-GAAP financial measures, including AFFOPU and
capitalization rate. The non-GAAP measures are further defined and
discussed in the MD&A dated August 9,
2017, available on SEDAR at www.sedar.com, which should be
read in conjunction with this release. Since AFFOPU and
capitalization rate are not determined by IFRS, such measures may
not be comparable to similar measures reported by other issuers.
The Trust has presented such non-GAAP measures as management
believes these measures are a relevant measure of the ability of
the Trust to earn and distribute cash returns to Unitholders and to
evaluate the Trust's performance. These non-GAAP measures
should not be construed as alternatives to net income (loss) or
cash flow from operating activities determined in accordance with
GAAP as an indicator of the Trust's performance. Please refer to
"Additional IFRS Measures and Non-IFRS Measures" in the Trust's
MD&A.
Forward-Looking Information:
Certain statements contained in this news release may
constitute forward-looking statements. Forward-looking statements
are often, but not always, identified by the use of words such as
"anticipate", "plan", "expect", "may", "will", "intend", "should",
and similar expressions. These statements involve known and unknown
risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in
such forward-looking statements. Forward looking statements in this
news release include the following: i) pro-forma the
announced transactions, the Trust will have estimated liquidity of
approximately $230 million comprising
of cash and available lines.
Although the Trust believes that the expectations and
assumptions on which the forward-looking statements are based are
reasonable, undue reliance should not be placed on the
forward-looking statements because the Trust can give no assurance
that they will prove to be correct. Since forward-looking
statements address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Actual
results could differ materially from those currently anticipated
due to a number of factors and risks. These include, but are not
limited to, competitive factors in the industries in which the
Trust operates, prevailing economic conditions, and other factors,
many of which are beyond the control of the Trust.
The forward-looking statements contained in this news release
represent the Trust's expectations as of the date hereof, and are
subject to change after such date. The Trust disclaims any
intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise, except as required under applicable securities
regulations.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT
ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS
RELEASE.
SOURCE Pure Industrial Real Estate Trust (PIRET)