TORONTO, April 9, 2019 /PRNewswire/ - Granite Real
Estate Investment Trust ("Granite") (TSX: GRT.UN / NYSE: GRP.U)
announced today that it has acquired the leasehold interest in two
income producing properties located in Mississauga, Ontario, collectively comprising
approximately 943,000 square feet at a purchase price of
CAD 154 million. The properties are
being acquired at a current in-going yield of approximately 4.5%,
which is expected to be significantly enhanced by rental growth and
future expansion. The properties are located adjacent to Toronto
Pearson International Airport and are 100% leased to creditworthy
tenants with a weighted average lease term of 8.7 years.
Investment Highlights
Best-in-Class
Physical Attributes
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Core In-fill GTA
Location
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Both buildings
completed in 2018 to the highest design specifications
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Located next to
Toronto Pearson International Airport
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40' clear height
offering superior cubic capacity to comparable new generation
buildings in Mississauga
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Immediate access to
highways 407, 401, 410 and 427, reducing user freight
costs
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Dual-sided shipping
at 2020 Logistics Drive with an industry-leading number of dock
positions and trailer parking
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Property is serviced
by both Mississauga and Brampton public transit
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Site offers multiple
points of ingress and egress
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Population of 4.6
million within a 30km radius providing crucial last-mile
capabilities and access to a significant labour force
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Cash Flow
Stability with Growth
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Exceptional Market
Fundamentals
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The contractual rent
at 2020 Logistics Drive is significantly below market, providing
expected net operating income ("NOI") growth upon lease
rollover
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Mississauga is the
largest industrial sub-market in Canada with a vacancy rate of only
0.6%
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2095 Logistics Drive
will be expanded by approximately 59,000 square feet by February
2022, generating additional NOI at an estimated yield of
8.9%
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Rents have increased
by 16.8% over the past
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Limited new supply
and constrained availability of large land parcels in Mississauga
are expected to maintain upward pressure on occupancy and
rents
24 months
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2020 Logistics Drive, Mississauga, Ontario
2020 Logistics Drive is a 773,318 square foot state-of-the-art
e-commerce distribution centre. The 40' clear height dual-load
building has modern e-commerce design specifications including 138
truck level doors, LED lighting, 8" reinforced floors, 65' loading
bays and optimal column spacing. Constructed in 2018, the property
is 100% leased to Wayfair Inc. at below market rents for a
remaining lease term of 6.4 years.
2095 Logistics Drive, Mississauga, Ontario
2095 Logistics Drive is a 170,018 square foot state-of-the-art
freezer/cooler building. The 40'10" clear height facility has 28
shipping doors, LED lighting, 10" reinforced floors and ample car
parking. Constructed in 2018, the property is 100% leased to
Congebec Inc. on a long term lease. Within the next three years, a
building expansion of approximately 59,000 square feet is scheduled
to be completed.
The two buildings are situated on approximately 45 acres of
land, leased to Granite until 2056, subject to a further eight-year
extension option.
Granite funded the acquisition with existing cash on hand.
Kevan Gorrie, Granite's President
and CEO commented that "This core acquisition provides a strong
combination of cash flow stability and growth for our unitholders,
while increasing our presence in the GTA and advancing our strategy
of acquiring and developing institutional quality assets in key
e-commerce and distribution markets. These assets are exceptionally
well located and exemplify some of the highest quality e-commerce
and food distribution product in Canada. They will be great
additions to our portfolio."
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 85 rental income properties representing approximately 35
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 Andrea Sanelli, Manager, Legal & Investor
Services, at 647-925-7504 or Ilias
Konstantopoulos, Chief Financial Officer, at
647-925-7540.
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 Granite's intention and ability to
complete the expansion at 2095 Logistics Drive in the proposed
timeline, the expected impact of such expansion in terms of yield
and NOI growth, the expected NOI growth upon lease rollover at 2020
Logistics Drive, the expected enhancement to the yield of the
acquired properties from such expansion and rental growth,
Granite's ability to make future investments, 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 performance or results and will not
necessarily be accurate indications of whether or the times at or
by which such performance or results will be achieved, Granite's
intention or ability to complete the expansion at 2095 Logistics
Drive in the proposed timeline, the expected impact of such
expansion in terms of yield and NOI growth, the expected NOI growth
upon lease rollover at 2020 Logistics Drive, Granite's ability
to make future investments, 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 acquisition 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.
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SOURCE Granite Real Estate Investment Trust