Real estate market is showing substantial growth potential, as a result, real estate investment trust companies are gaining significant traction lately. These firms provide an opportunity to investors to invest in income-generating real estate. Backed by this potential, acquisitions and developments of REIT firms is witnessing growth currently and expected to witness more such activities in the future.
Blackstone Group Inc, an American multinational alternative asset management, private equity and financial services company headquartered in New York, United States, reportedly announced the acquisition of Dream Global REIT, a real estate investment firm headquartered in Toronto, Canada, for $4.7 billion.
Dream Global REIT stated that C$16.79 cash per unit of Dream Global will be paid by Blackstone Group to procure all of the office as well as industrial property manager’s assets and subsidiaries. The offer given is 19% higher than the Canadian firm’s closing price in Toronto last week. The stock of the company jumped 17% to C$16.57 on Monday.
James Seppala, Head of the Blackstone Real Estate Europe, stated that the transaction is a thrilling opportunity for Blackstone Group to expand its current office as well as logistics portfolios across some of the biggest as well as most important markets throughout the region.
The deal requires a minimum of 66.67% approval from unitholders of Dream Global. The board of trustees of the company approved the deal unanimously and suggested the unitholders to vote in the favor of deal.
The news of the deal came less than a week after Blackstone separately stated that it had raised $20.5 billion for its biggest real estate fund to date. The private equity sector’s biggest real estate investor conducted a final close on the Blackstone Real Estate Partners IX. The amount gathered by Blackstone is even greater than the $15.8 billion gathered in the 2015 funding pool.
National Bank of Canada and TD Securities are serving as financial advisers of Dream Global, while Hoskin & Harcourt LLP, Osler, as well as Greenberg Traurig Germany LLP are Dream Global’s legal counsel on the deal.
RBC Capital Markets, Deutsche Bank Securities Inc and BNP Paribas are operating as financial advisers of Blackstone Group while Simpson Thacher & Bartlett LLP and Davies Ward Phillips & Vineberg LLP are acting as legal counsel for the company.