Inovalis Real Estate Investment Trust is to purchase, on a 50-50 joint venture basis, an office property in Germany for an all-in-cost of approximately EUR45m (CAD67.5m).
The property, located in Duisburg, Germany, is an eight-storey office building developed in 2008 totalling 217,400 square feet of office space and is fully let to Mitsubishi Hitachi Power Systems Europe under a lease expiring on 31 December 2020.
The addition of the property will be immediately accretive to the REIT's AFFO per unit.
The REIT will be acquiring the property in a 50-50 co-ownership arrangement with a global institutional investor that has had a long-standing relationship with Inovalis SA.
The REIT's share of the acquisition will be funded through a combination of existing cash on hand, proceeds from re-financing and up-financing of the REIT's French properties and a first mortgage of CAD18.4m (Inovalis' REIT share).
As a result, the REIT will not need to raise additional equity capital to fund its portion of this acquisition.
Khalil Hankach, Inovalis REIT's newly appointed chief investment officer, says: "We are excited because the acquisition is consistent with our previously stated growth strategy of acquiring high-quality assets located in good locations in stable markets at attractive relative valuations. The REIT continues to see similar investment opportunities in the targeted European markets, and thanks to the possibility of the JV, we will have sufficient liquidity to continue buying assets throughout 2014. Additionally, and despite the fact that REIT has not yet closed its first fiscal year, its legitimacy is established enough to convince institutional investors from outside of Canada to invest alongside the REIT."