GIC, Dream Industrial REIT to acquire Canada’s Summit in C$5.9bn deal

GIC, Dream Industrial REIT to acquire Canada's Summit in C$5.9bn deal

A joint venture between Singapore’s sovereign wealth fund GIC and Dream Industrial REIT (DIR) has agreed to acquire Canada’s Summit Industrial Income REIT (Summit) in an all-cash transaction valued at C$5.9 billion.

GIC and DIR have formed a limited partnership for the deal with an ownership structure of 90% and 10%, respectively.

Under the terms of the arrangement agreement, Summit unitholders will receive $23.50 per unit in cash by way of a special distribution and a redemption of units, which represents a premium of 31.1% to Summit’s closing unit price on November 4, 2022, a premium of 33.4% to the REIT’s 20-day volume weighted average price through November 4, 2022, and a 19.5% premium to Summit’s current equity research consensus net asset value estimate of $19.66 per unit.

“We are pleased to provide an immediate and certain premium value to our unitholders through this all-cash transaction with GIC and Dream,” said Paul Dykeman, Chief Executive Officer and Trustee of Summit.

“The entire board of trustees and management team are proud to have executed on our strategy to develop and aggregate an attractive, diversified portfolio with a team that is dedicated to delivering best-in-class services to our tenants, and this value optimization transaction represents a successful culmination of these efforts. We are confident this transaction is in the best interest of the REIT and unitholders,” added Dykeman.

“We are pleased to bring GIC’s expertise in real estate investing together with Dream’s 25 years of experience as a world-class real estate developer, owner and asset manager. Through our partnership, Summit’s assets will be positioned for continued success,” said Lee Kok Sun, Chief Investment Officer of Real Estate, GIC.

“Summit has a premier portfolio of industrial properties defined by strong sector fundamentals, resilient cash flows, and stable market rent growth in key markets across Canada,” said Adam Gallistel, Head of Americas Real Estate, GIC. “This is another strong addition to GIC’s global real estate portfolio.”

“We have been impressed by Summit and their continued strong execution and we are thrilled to welcome an exceptional team to Dream,” said Michael Cooper, Founder, Dream Group of Companies, and Trustee, Dream Industrial REIT. “Summit’s business fits perfectly with Dream’s experience and management expertise, and we look forward to partnering with GIC.”

A subsidiary of Dream Unlimited Corporation(Dream) will be the asset manager for the joint venture and DIR will provide property management, accounting, construction management, and leasing services to the joint venture at market rates.

DIR and Dream intend to continue employing the majority of Summit employees post-closing of the transaction.

The transaction is expected to close in the first quarter of 2023.

Summit Industrial Income REIT is an unincorporated open-ended trust focused on growing and managing a portfolio of light industrial properties in key markets across Canada. 

In September, Singapore’s GIC and real estate investment firm Oak Street acquired the internally managed net-lease real estate investment trust (REIT) Store Capital Corp.(Store Capital) in a deal valued at about $14 billion.