Business
Inovalis Real Estate Investment Trust announces it has entered into an agreement to purchase an office property in Germany with joint-venture partner
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About this update from Inovalis Reit
[{"type":"text","content":"\n\n\n/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE\n UNITED STATES/\n\n\nTORONTO, Feb. 18, 2014 /CNW/ - Inovalis Real Estate Investment Trust\n (the \"REIT\") (TSX: INO.UN) announced today that it has entered into a conditional\n agreement to purchase, on a 50-50 Joint-Venture basis (\"JV\"), an office property (the \"Property\") located in Germany, for an all-in-cost of approximately €45 million\n (C$ 67.5 million) (the \"AIC\"), representing a going-in capitalization rate of 7.4%.\n\n\nThe Property, located in Duisburg, Germany, is an eight-storey office\n building developed in 2008 totalling 217,400 square feet of office\n space and is fully let to Mitsubishi Hitachi Power Systems Europe GmbH\n under a lease expiring on December 31, 2020.\n\n\nThe addition of the Property will be immediately accretive to the REIT's\n AFFO per unit.\n\n\nThe REIT will be acquiring the Property in a 50-50 co-ownership\n arrangement with a strategic, global institutional investor that has\n had a long-standing relationship with Inovalis SA.\n\n\nThe REIT's share of the acquisition will be funded through a combination\n of existing cash on hand, proceeds from re-financing and up-financing\n of the REIT's French properties and a first mortgage of C$ 18.4 million\n (Inovalis' REIT share).\n\n\nAs a result, the REIT will not need to raise additional equity capital\n to fund its portion of this acquisition.\n\n\nHighlights of the acquisition include:\n\n\n\nThe REIT is executing its growth plan by acquiring a well-located, high\n quality property with a stable cash flow from tenant of strong credit\n quality (Mitsubishi Hitachi Power Systems Europe GmbH),\n\n\n\n\nThe Property is being acquired from a fund managed by a global European\n insurance company.  The closing is expected to take place on or about\n May 2014,\n\n\n\n\nThe Property is being acquired by the REIT for an AIC of approximately\n C$ 33.7 million (Inovalis REIT's share), reflecting an attractive\n going-in capitalization rate of 7.4%,\n\n\n\n\nThe REIT has negotiated a new first mortgage on the entire Property\n totalling C$ 36.7 million.  The terms of the mortgage are: interest\n only, with a minimum term of 4 years with a 2 year extension, at an\n interest rate of 1.75% over 3-month EURIBOR (with possibility of a cap\n on the 3-month EUR...