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TORONTO/MONTREAL – Dream Office Investment Trust is working with TD Bank and CBRE to sell 1 / 2 of its stake in Toronto’s Scotia Plaza, Canada’s second tallest business building, based on two sources familiar with the matter.
The potential sale comes about 4 years after Dream Office REIT, then called Dundee REIT, acquired two-thirds from the Two million square-foot Scotia Plaza complex. H&R REIT bought the rest of the stake at the time. The $1.3-billion deal marked the greatest price ever paid for a Canadian business building.
Dream Office has become looking to sell half its stake, leaving Scotia Plaza potentially in the hands of three different owners with equal positions, based on 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 around the outcome of the ultimate deal terms with the buyer.
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- Dream Office REIT jumps most in 7 years on plan to sell $1.2 billion of property and cut payoutDream Office REIT gets downgraded to sector underperform at CIBC with $18 targetScotia Plaza buyers get a better deal than expected
Strong interest is expected from foreign buyers and Canadian pension funds, the sources said.
The news may come as a significantly weaker Canadian dollar is attracting increasing attention from global investors seeking an alternative choice to tumultuous equity markets.
Scotia Plaza is incorporated in the midst of great renovations in recent months, though it is not clear if they’re associated with the potential sale.
As part of a recently announced strategic plan, Dream Office said hello looks to market non-core assets worth $1.2 billion over the next three years.
Dream Office Chief Executive Jane Gavan did not immediately respond to an e-mail requesting comment. TD declined comment, and CBRE didn’t immediately react to a request comment.
Dream Office shares lost 31 percent of the value last year, largely due to concerns about its large contact with the Alberta market, that has been hit by the oil price collapse.
This year Dream shares have gained nearly 14 percent, helped through the announcement about selling assets.
? Thomson Reuters 2016
