Canada's Dream Global REIT capped its listing in Germany this week with the completion of the acquisition of the Siemens office campus in Nurenburg for 鈧�50 mln.
Dream Global began trading on Frankfurt Stock Exchange under the ticker symbol DRG on Tuesday.
In a statement about the listing on Monday, the real estate investment company announced that it completed the acquisition of the 54,900 m2, 14.6-hectare office campus, in the northern Bavarian city of Nuremberg.
Dream Gobal said that the asset is located in a predominantly residential area south of the city centre, is well connected to a major highway and the subway and 'offers considerable long-term mixed-use intensification opportunities'.
The transaction is a sale and lease-back with engineering and technology group Siemens on a ten-year initial lease term with no break options. The investment volume of CA$73.1 mln (鈧�50 mln) reflects a going-in cap rate, including committed capital expenditures, of 8.1%. The purchase was partially financed with a new eight-year mortgage for $51.2 mln at a fixed interest rate of 1.2%.
The property was built between 1985 and 1989 and has undergone significant updates over the past number of years. It consists of five multi-storey office buildings, a restaurant, training and conference facilities, parking and several outbuildings. Siemens, which is headquartered in Germany, is one of the world's largest engineering and technology companies.
Dream Global is also in exclusive negotiations for the acquisition of a 33,000 m2 office property located in one of Germany's top ten markets for a purchase price of CA$82.5 mln at a going-in cap rate of 6.3%. The deal is expected to close by end-2016.
Listing
Ratings agency Moody's has given the Canadian REIT an issuer rating of Baa3 stable, reflecting the quality of the company's assets and its track record in Europe, according to Dream Global REIT CEO, Jane Gavan (pictured).
'The listing of Dream Global on the Frankfurt Stock Exchange and the credit rating from Moody's are important steps in bridging the valuation gap between our trading price and the valuation of our German peers,' Gavan commented. 'We believe that both initiatives are significant milestones for the REIT and should make it easier for European investors to gain exposure to Dream Global, improve the Trust鈥檚 cost of capital and enhance its financial flexibility.'
According to Dream Global, the stock market listing will enable the REIT to source better priced unsecured debt capital in Europe, where it is seeking further growth in the light of Germany's current strong fundamentals.
