Dream Global REIT announced that it has completed the acquisition of all the shares issued by SPE III Runway SPRL, a Belgian entity that holds as its main asset Airport Plaza, a multi-tenant office complex located in Brussels, Belgium. The purchase price was approximately €95.9 million ($143.0 million), representing a going in capitalization rate of 7.1%.
The purchase price wasfunded with proceeds from the Trust’s March equity offering and its revolving credit facility. The REIT is in negotiations to place long-term mortgage financing for a term of up to seven years and an interest rate of approximately 1.8% based on the current market rates.
The acquisition further expands the REIT’s geographic presence which also includes properties throughout Germany as well as in Vienna. The Trust remains in exclusive negotiations on an additional acquisition in Stuttgart, Germany, which is expected to close by the end of Q2 2017. Following this acquisition, the Trust will have fully deployed the proceeds raised in its most recent public offering of units.
“We are excited to have entered into the compelling Brussels market with this high-quality acquisition” said Jane Gavan, Chief Executive Officer of Dream Global REIT. “Brussels, headquarters of the European Union, is amongst the largest office markets in Europe and a strategic location for many multinational companies, making it an ideal location for the Trust’s expansion. We have now entered into our second market outside of Germany, further solidifying our reputation as a local European investor with a strong management platform.”
Corporate Gateway and International Hub – Belgium is centrally located in Europe and is a corporate gateway serving as the European and regional headquarters for many international companies. Belgium boasts a robust and highly developed transportation network, with extensive connectionsto neighbouring countries, including Germany. The capital city of Brussels is a top six European office market, a preferred location for international organizations and among the largest global centres for international cooperation, serving as the headquarters for both NATO and the European Union. Brussels is at the heart of one of the wealthiest regions in Europe and has office inventory totalling 143 million square feet, comparable in size to Hamburg or Frankfurt in Germany. For reference, Brussels ranks behind only Toronto in terms of total office market size relative to Canadian cities.
Source: Dream Global REIT