Dundee REIT to exit industrial business in 18 months

Thu Jun 28, 2012 3:46pm EDT
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By Ankur Banerjee and Shounak Dasgupta

(Reuters) - Dundee REIT (D_u.TO: Quote), Canada's biggest office space supplier, is looking to sell its industrial properties in the next 18 months to focus on growing its core business, its chief executive said.

Industrial properties, on a square footage basis, contributed about 8 percent to the company's total revenue of C$441.3 million last year.

"The strength of the economy has surprised people," CEO Michael Cooper told Reuters in an interview. "Most of the tenants need more space."

The company, whose tenants include the Government of Canada, Telus Corp (T.TO: Quote), Enbridge Pipelines Inc ENBEP.UL and Bell Canada (BCE.TO: Quote), aims to become an all-office real estate investment trust in 12-18 months, Cooper said on Thursday.

Dundee owns 22.5 million square feet of office space across 175 properties and 5.7 million square feet of industrial space across 74 properties.

Dundee will buy more assets than sell in the rest of the year, said Cooper, who holds a law degree from the University of Western Ontario.

The REIT last month partnered with H&R Real Estate Investment Trust (HR_u.TO: Quote) to buy the landmark Scotiabank Plaza in Toronto for C$1.27 billion, the highest price paid for an office building in Canada.

Dundee, which last year bought 24 office properties from Blackstone Group LP (BX.N: Quote) for about C$832 million, has already spent about C2.5 billion in acquisitions this year.   Continued...