TORONTO, July 18, 2019 /CNW/ - 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 a third property, together
comprising approximately 1.4 million square feet ("SF") at a
combined purchase price of approximately C$120 million, representing an in-going weighted
average yield of approximately 5.8%. The properties are fully
leased with a weighted average lease term of 5.4 years and will be
immediately accretive to funds from operations and adjusted funds
from operations per unit. In addition, Granite has acquired,
through a joint venture with NorthPoint Development, a 191 acre
parcel of land in Houston, Texas
for the development of a multi-phased business park comprising a
total of approximately 2.5 million SF.
1901 Beggrow Street, Columbus,
Ohio, USA
Granite has acquired 1901 Beggrow Street, a 802,390 SF, 36'
clear height distribution centre situated on 51.1 acres of land in
Columbus, Ohio. This state of the
art facility was completed in 2018 and is 100% leased to a
subsidiary of Pepsico, Inc. for a remaining lease term of 4.7
years. The acquisition was previously announced on April 11, 2019 and closed on May 23, 2019.
The property is well located within the major southeast
Columbus industrial market,
benefiting from a strong labour pool and providing access to nearly
60% of the U.S. and Canadian population within a day's drive. The
property is also strategically located within two miles of the
Rickenbacker International Airport, one of the only cargo-dedicated
airports in the world. Further broadening the property's
appeal, the building can be expanded by approximately
200,000 SF providing attractive site flexibility and growth
potential.
Heirweg 3 Born, Netherlands
Granite has acquired Heirweg 3, a 259,388 SF distribution centre
situated on 7.4 acres of land in Born, Netherlands. Constructed in 2008, the property
is 100% leased to Broekman Logistics for a remaining lease term of
7.6 years. The acquisition closed on July 8,
2019.
The property is well located in an established business
park in Born. Its strategic location and close proximity to an
inland port, rail and the A2 motorway provide excellent
distribution access serving the local Dutch market as well as
broader European markets.
1222 Commerce Parkway, Horn
Lake, Mississippi, USA
Granite has agreed to acquire 1222 Commerce Parkway, a 300,145
SF, 32' clear height distribution centre situated on 20.9 acres of
land in Horn Lake, Mississippi.
The property was constructed in 2018 and is 100% leased to DSV
Solutions and EPE Industries for a remaining weighted average lease
term of 4.8 years. The acquisition is subject to customary closing
conditions and is expected to close in the third quarter of
2019.
The property is located within the DeSoto County submarket, less than 15 miles
from downtown Memphis, Tennessee.
The property offers exceptional access to Interstate 55 and
proximity to the Memphis
International Airport which is home to the FedEx World Hub, the
busiest air cargo airport in the United
States.
Houston, Texas
Development
On July 1, 2019, Granite, in
partnership with NorthPoint Development, acquired a 191 acre
greenfield site in Houston, Texas
for C$33.9 million for the future
development of a 2.5 million SF multi-phased business park capable
of accommodating buildings ranging from 250,000 SF to 1.2 million
SF. Speculative construction of the initial phase, consisting
of two buildings totaling 625,000 SF, is anticipated to begin in Q3
2019. The project is expected to generate a development yield
spread of greater than 200 basis points. Granite's partner
NorthPoint Development, will act as development manager for the
project.
The site is strategically located within Houston's northeast submarket, approximately
12 miles from downtown Houston and
10 miles from the Port of Houston,
the largest export port in the United
States. The property, located directly on U.S. Highway 90,
benefits from exceptional access to Houston's extensive interstate system, the
city's three class I railroads and the Houston International Airport.
Granite funded the completed acquisitions and expects to fund
the Mississippi acquisition with
existing cash on hand.
Kevan Gorrie, Granite's President
and CEO, commented that, "These acquisitions and development will
further advance our strategy of acquiring and developing leading
core product in key e-commerce and distribution markets in
North America and Europe. Collectively, we expect these
transactions to further enhance the quality of our portfolio,
generate stable and growing cash flow and provide an opportunity to
create significant net asset value growth for our
unitholders.
The acquisition of the Heirweg 3 property in the Netherlands represents our first
acquisition following the opening of our new office in Amsterdam. This office will increase our
presence in a key target market and enhance our ability to execute
on a strong pipeline of opportunities in Europe.
Finally, we are pleased to launch our first partnership with
NorthPoint Development, a leading developer of new generation
distribution properties in the U.S. The Houston project will enable us to build scale
in a strategic location in one of our target U.S. markets and the
project is expected to generate superior returns and net asset
value growth, both important components of our investment
strategy."
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 80 rental income properties representing approximately 34
million square feet of leasable area.
ABOUT NORTHPOINT
NorthPoint Development is a privately held development firm
based in Kansas City. Their focus
is development in the industrial and self-storage markets within
the central part of the United
States. They are currently active in 21 states
including Kansas, Missouri,
Texas, Illinois, Tennessee, Ohio, Indiana, Kentucky, Michigan, Pennsylvania, California, Arizona, Washington, New
York, Georgia, and
Florida. NorthPoint Development is
one of the most active industrial development firms in the country
having developed over 67,300,000 square feet of Class A industrial
product since 2012.
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 proposed acquisition of 1222
Commerce Parkway, Horn Lake,
Mississippi, (the "Mississippi Acquisition") on the terms
and conditions described herein, the expected timing of the closing
of the Mississippi Acquisition, Granite's intended source of funds
for the Mississippi Acquisition, the potential expansion of the
building on the acquired property at 1901 Beggrow Street,
Columbus, Ohio (the "Ohio
Property"), the expected construction on and development yield of
the acquired greenfield site in Houston,
Texas, the expected impact of the acquisitions on Granite's
funds from operations and adjusted funds from operations per unit,
net asset value and cash flow 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 the closing of the Mississippi
Acquisition on the terms described herein, the date on which
closing is expected to occur, Granite's intended source of funds
for the Mississippi Acquisition, Granite's intention or ability to
expand the building on the acquired site, the potential expansion
of the building on the Ohio Property, the expected construction on
and development yield of the acquired greenfield site in
Houston, Texas, the expected
impact of the acquisitions on Granite's funds from operations and
adjusted funds from operations per unit, net asset value and cash
flow growth, 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 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.
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SOURCE Granite Real Estate Investment Trust