Granite Real Estate Investment Trust (“Granite”) (TSX: GRT.UN / NYSE: GRP.U) announced today that it has entered into an agreement to acquire a warehouse and logistics property in Erfurt, Germany consisting of approximately 717,000 square feet of gross leasable area.
The purchase price of euro 53.9 million represents an in-going yield of approximately 5.4% excluding transaction costs. The property is located in one of Granite’s core European markets and builds on Granite’s existing presence in the German logistics market.
The property which was built in 2010 is fully leased with a weighted average lease term of approximately 4.7 years.
The primary tenant is LGI TechLog GmbH, a German subsidiary of Elanders Group, a public Swedish company traded on the NASDAQ OMX Nordic Exchange, which is a global provider of supply chain management and e-commerce logistics services. The transaction will be immediately accretive to funds from operations and adjusted funds from operations and will be funded from a combination of cash on hand and Granite’s credit facility. The transaction is expected to close during the third quarter of 2018.
Granite also announced today that it recently entered into an agreement to sell its office properties in Aurora, Ontario that serve as the corporate headquarters for Magna International Inc. (“Magna”). The sale will generate total gross proceeds of $60 million representing a capitalization rate of approximately 6.2%. The sale will be accretive to Granite’s net asset value and is subject to customary closing conditions with the closing expected to take place towards the end of the third quarter of 2018.
Michael Forsayeth, Granite’s CEO, commented that “Together with the sale of Magna’s corporate headquarters being net asset value accretive and consistent with Granite’s strategy, these transactions will further reduce Granite’s Magna concentration.”
FORWARD LOOKING STATEMENTS
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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 REIT and Granite GP dated March 1, 2018 (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.