TORONTO/MONTREAL – Dream Office Real Estate Investment Trust is working with TD Bank and CBRE to market half of its stake in Toronto’s Scotia Plaza, Canada’s second tallest office building, according to two sources familiar with the problem.
The potential sale comes about four years after Dream Office REIT, then called Dundee REIT, acquired two-thirds from the 2 million square-foot Scotia Plaza complex. H&R REIT bought the rest of the stake at that time. The $1.3-billion deal marked the highest price ever paid for a Canadian business building.
Dream Office has become seeking to sell half its stake, leaving Scotia Plaza potentially at the disposal of three different owners with equal positions, according to the sources, who requested anonymity since the matter isn’t yet public.
Under a possible arrangement, Dream could seek to retain management control, among the sources said, adding it depends on the results of the final deal terms using the buyer.
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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 incorporated in the midst of great renovations in recent months, though it is not clear if they’re associated with the potential sale.
As a part of a recently announced strategic plan, Dream Office said hello looks to market non-core assets worth $1.2 billion over the next 3 years.
Dream Office Leader Jane Gavan did not immediately react to an email requesting comment. TD declined comment, and CBRE didn’t immediately respond to a request comment.
Dream Office shares lost 31 percent of the value this past year, largely because of concerns about its large exposure to the Alberta market, that has been hit by the oil price collapse.
This year Dream shares have gained nearly 14 per cent, helped by the announcement about selling assets.
? Thomson Reuters 2016
