Ontario-based Skyline Industrial Real Estate Investment Trust (REIT) has completed its largest-ever transaction, entering the city of Edmonton and expanding its holdings in Calgary.
On September 8, 2022, the REIT purchased a portfolio of four business parks in Alberta with a total of more than two million square feet of industrial space, from a major Canadian pension plan.
The portfolio, which is 97.7 per cent occupied, comprises 16 buildings on 129.5 acres of land. Together, the properties accommodate 51 tenants.
The total purchase price of the portfolio was $309.25 million.
All four business parks are in sub-markets of Calgary and Edmonton, providing tenants with immediate access to national transportation channels, according to Skyline.
“The transaction is not only the largest ever for Skyline Industrial REIT, but also the largest closing across all of Skyline Group of Companies’ investment products,” said Jason Castellan, co-founder and CEO, Skyline Group of Companies.
“This transaction was a momentous one for Skyline Industrial REIT, and we are thrilled to be entering the city of Edmonton, expanding our Calgary holdings, and enhancing our presence across Canada,” said Mike Bonneveld, president, Skyline Industrial REIT.
Each of the properties provides exceptional logistics, distribution, and warehousing facilities, Bonneveld added.
The REIT recently completed a strategic disposition program and has significantly increased its weighting in modern industrial assets and developments. Proceeds from the sale of these assets have continued to be redeployed into new acquisitions and toward the many development partnerships in the REIT’s pipeline.
Skyline REIT believes there is significant upside to this portfolio as both Calgary and Edmonton continue to experience significant net rental growth, according to a company statement.
CBRE’s Q2 2022 Canada Industrial report noted that Calgary leasing activity has persisted with two million square feet of net positive absorption, and the market has experienced extraordinary rent acceleration, with rents rising 15.3 per cent, year-over-year, to $9.49 per square foot.
Post-acquisition, Skyline Industrial REIT now consists of 57 properties in 33 communities in five provinces across Canada, with a total of more than 8.7 million square feet of industrial space.
Skyline Industrial REIT was previously Skyline Commercial REIT. In June 2022 the REIT updated its name to better reflect its portfolio composition and target sector.