Nexus Real Estate Investment Trust (REIT) is set to add eight industrial buildings to its portfolio. Two newly announced conditional agreements with vendors in London, Ontario and Edmonton include a $103.5 million deal for six London assets encompassing about 1.2 million square feet of gross leasable area, and a $14-million outlay for two Edmonton buildings totalling about 108,000 square feet.
Both deals will be partly funded with the issuance of Class B LP units at a unit price of $1.91 for the London properties and $2.05 for the Edmonton assets. The vendor will continue to manage the London properties on Nexus REIT’s behalf. The Edmonton facilities are fully leased to tenants outside the oil and gas industry.
“We’re very excited about announcing these acquisitions and the prospects for the REIT’s near-term growth,” says Nexus chief executive officer Kelly Hanczyk.
This follows the December 31 acquisition of a 50 per cent interest in a 500,00-square-foot industrial facility in the Greater Toronto Area’s eastern end. The $28.5-million purchase price includes a planned 95,000-square-foot addition to accommodate a major tenant, for which the vendor will cover the costs and oversee the construction.
Upon completion of the two new deals — slated for early March and early April — 67 per cent of Nexus REIT’s net rental income will be derived from its industrial holdings. That’s up from the 61 per cent quotient in the current mix of 75 industrial, office and retail assets comprising about 4.4 million square feet of rental space.
“2021 is looking to be a breakout year for the REIT,” Hanczyk asserts. “We will continue to focus on the acquisition of industrial properties and believe that increasing the industrial weighting of the REIT’s portfolio will have a very positive impact on the valuation of the REIT’s units. We are also still very much committed to graduating to the TSX, combined with a 4-to-1-unit consolidation, and hope to provide an update on that front very shortly.”