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Summit Industrial REIT sold in Singapore-backed $5.9 billion deal

Government of Singapore Investment Corp. and Dream Industrial REIT acquire Summit’s industrial portfolio in all-cash transaction
Summit REIT had been buying industrial assets in Alberta. | Western Investor

The  Government of Singapore Investment Corp. (GIC Singapore) and Dream Industrial REIT (Dream) have entered into an agreement to acquire Summit Industrial Income Real Estate Investment Trust (Summit REIT) in an all-cash transaction valued at approximately $5.9 billion, Summit REIT announced November 2.

Under the terms of the agreement Summit REIT unitholders will receive $23.50 per unit in cash, which represents a premium of 31.1 per cent to Summit's closing unit price on November 4, 2022, and a 19.5 per cent premium to Summit's current 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, CEO of Summit. 

Summit had been on an acquisition binge across Alberta in recent years. In 2019 Summit REIT acquired an Alberta light industrial portfolio of 37 buildings totalling more than 3.3 million square feet in Edmonton, Calgary and Grande Prairie for $588 million.

The Summit REIT sale is structured with GIC as a 90 per cent partner, and Dream holding the other 10 per cent. Dream Asset Management will be the property manager for the venture. The deal will more than double Dream's Canadian industrial portfolio under management, with a total gross leasing area (GLA) of 43 million square feet. Dream Industrial's assets will be approximately 53 per cent in Canada, 41 per cent in Europe and six in the United States, based on GLA.

The combined Summit and Dream portfolios are focused on logistics and warehousing assets, with approximately 60 per cent of the total GLA in the Greater Toronto and Montreal areas. 

The Summit transaction is expected to close in the first quarter of 2023, subject to customary conditions, including Summit unitholder, court, and regulatory approvals.