Business
Inovalis Real Estate Investment Trust announces it has entered into an exclusivity agreement to purchase an office property in Germany with joint-venture partner
/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES / ...
About this update from Inovalis Reit
[{"type":"text","content":"\n\n/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/\n\n\n\nTORONTO, Jan. 21, 2015 /CNW/ - Inovalis Real Estate Investment Trust (the \"REIT\") (TSX: INO.UN) announced today that it has entered into an exclusivity 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 €18 million (C$ 25 million). \n\nThe Property, located in Bad Homburg (15km North of Frankfurt), Germany, is a five-storey multi-tenanted office building developed in 2004 with 77,662 square feet of office space. The Property also comprises 31,442 square feet of storage and service space as well as 204 parking spaces. \n\nThe REIT has the ability to acquire the property at a going-in cap rate of 7.0%. The Property has an occupancy rate of 77% and offers additional revenue potential through the lease-up of vacancy.\n\nThe addition of the Property will be immediately accretive to the REIT's AFFO per unit.\n\nThe REIT will be acquiring the Property in a 50-50 co-ownership arrangement with another strategic, global institutional investor that has had a long-standing relationship with Inovalis SA.\n\nThe REIT's share of the acquisition will be funded through a combination of existing cash on hand and a first mortgage. Upon completion of the Property acquisition, the debt to gross book value of the REIT will remain below 55%.\n\nFollowing the acquisition of the Property, the French properties and the German properties will represent 76% and 24% respectively of Inovalis REIT next twelve month's rental income.\n\nThe transaction is expected to close in the first half of 2015.\n\nStéphane Amine, Chairman of Inovalis REIT's, commented: \"The proposed acquisition is another step forward for Inovalis REIT. Consistent with our previously stated growth strategy, the Property is a high-quality asset in a well located and stable market. The Property is being purchased at an attractive relative valuation with rental income from tenants of strong credit quality, and we will focus on actively managing the Property in order to benefit from the additional revenue growth potential. We continue to see similar investment opportunities in the REIT's targeted European markets, and thanks to this new joint-venture and our cash on hand, we w...