Business
Inovalis Real Estate Investment Trust Provides Transaction Update - Completion of the Previously Announced Acquisition of 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\n\n\n/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE\n UNITED STATES/\n\n\nTORONTO, July 16, 2014 /CNW/ - Inovalis Real Estate Investment Trust\n (the \"REIT\") (TSX: INO.UN) announced today that it has completed the acquisition,\n on a 50-50 Joint-Venture basis (\"JV\"), of an office property (the \"Property\") located in Germany, for a total purchase price of $65.7 million (the\n REIT's share being $32.8 million), representing a going-in\n capitalization rate of 7.4%. The addition of the Property will be\n immediately accretive to the REIT's AFFO per unit.\n\n\nThe Property is located in Duisburg, Germany, in the district of\n Kasslerfeld, at the Innenhafen harbour. It is situated near the federal\n motorways A40 to the North, A59 to the East and near the city centre of\n Duisburg in the South. The Property is an eight-storey office building\n developed in 2008 totalling 217,431 square feet of lettable space with\n 632 parking spaces and is fully let to Mitsubishi Hitachi Power Systems\n Europe GmbH under a lease expiring on December 31, 2020.\n\n\nThe REIT is acquiring the Property in a 50-50 co-ownership arrangement\n with Injazzat Real Estate Development Company K.S.C., a strategic,\n global institutional investor that has had a long-standing relationship\n with Inovalis SA, the manager of the REIT. The Property has been\n acquired from a fund managed by a global European insurance company.\n\n\nThe acquisition has been financed with a first mortgage of $35.8 million\n and equity investments of $29.9 million. The REIT's share of the equity\n investment ($15.0 million) is coming from existing cash on hand and\n increased financing on the REIT's existing French properties.\n\n\nThe $35.8 million first mortgage was granted by Pfandbrief Bank (one of\n the largest German mortgage banks). It is an interest only 5-year term\n facility at an all-in fixed interest rate of 2.28%. The Property was\n valued by Jones Lang LaSalle as at November 1, 2013 at $73.0 million,\n reflecting a loan to value of 49.0%.\n\n\nFollowing the acquisition of the REIT's share of the Property, the\n French properties and the German properties will represent 78% and 22%\n respectively of Inovalis REIT's rental income for the next twelve\n months.\n\n\nDavid Giraud, Inovalis REIT's Chief Executive Officer, commented: \"We ar...