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On the purchase of the Dream Industrial REIT portfolio in Halifax.

In September 2019, Dream Industrial REIT sold 38 industrial assets to Kingsett Capital. marking the largest industrial portfolio sale in Atlantic Canada. Below we’ve highlighted the top six reasons this is such a noteworthy transaction – for business owners not just in Halifax but across Atlantic Canada.

  1. Largest industrial portfolio in Atlantic Canada – 2.7 million square feet

Composed of 38 office and industrial assets – including 37 in the Burnside Industrial Park in Dartmouth, Nova Scotia, and one (1) in the Moncton Industrial Park in Moncton, New Brunswick. Properties are primarily multi-tenant, light industrial.

  1. Largest sale of industrial assets to ever sell in Atlantic Canada – $271 million (August 2019)

The previous (most recent) large-scale industrial portfolio transaction was $60 million and comprised of 20 assets.

  1. Historically low cap rate – 6.44%

Capitalization rates for the other industrial portfolio sales in Atlantic Canada have ranged between 7% and 8%, between 2008 and 2019.

  1. Return of KingSett Capital (in a bigger way) to the Halifax marketplace, operating as KS Eastern Industrial Inc.

KingSett significantly expanded its Halifax presence. “Pleased with this $270M acquisition in our Growth LP7 where we have significant capacity to complete transactions of scale,” said KingSett CEO Jon Love in a brief statement on LinkedIn.

  1. Validation of Halifax as a national investment location

A stable economy, a growing diversified population and vibrant housing market have garnered the attention of national and international investors to Halifax. The industrial marketplace has historically stable, quality assets, and a downward trend in the industrial vacancy rate, making the product attractive to those firms looking to enlarge their portfolios, including Fiera Real Estate and PRO REIT.

  1. Potential opportunity for the re-sale of non-core assets

There is expectation that KS Eastern Industrial Inc. may have future plans to sell-off non-core assets from the Dream Industrial Portfolio.  To date, announced sales include the sale of the vacant warehouse at 131 Thornhill which was sold to an owner occupier, planning warehouse and showroom uses.

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