Dream Office REIT looking to sell Scotia Plaza stake - sources

Fri Feb 26, 2016 2:50pm EST
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By John Tilak and Allison Lampert

TORONTO/MONTREAL Feb 26 (Reuters) - Dream Office Real Estate Investment Trust is working with TD Bank and CBRE to sell half of its stake in Toronto's Scotia Plaza, Canada's second tallest office building, according to two sources familiar with the matter.

The potential sale comes about four years after Dream Office REIT, then called Dundee REIT, acquired two-thirds of the 2 million square-foot Scotia Plaza complex. H&R REIT bought the rest of the stake at the time. The C$1.3 billion($962.11 million) deal marked the highest price ever paid for a Canadian office building.

Dream Office is now looking to sell half its stake, leaving Scotia Plaza potentially in the hands of three different owners with equal positions, according to the sources, who requested anonymity because the matter is not yet public.

Under a possible arrangement, Dream could seek to retain management control, one of the sources said, adding that it would depend on the outcome of the final deal terms with the buyer.

Strong interest is expected from foreign buyers and Canadian pension funds, the sources said.

The news comes as a significantly weaker Canadian dollar is attracting increasing attention from global investors seeking an alternative to tumultuous equity markets.

Scotia Plaza is in the midst of significant renovations in recent months, though it is not clear if they are tied to the potential sale.

As part of a recently announced strategic plan, Dream Office said it is looking to sell non-core assets worth C$1.2 billion ($887.90 million) over the next three years.   Continued...