Dream Office Investment Trust, Canada’s biggest office REIT, jumped one of the most in than seven years after it stated it would sell about $1.2 billion of property minimizing its payout to weather the ability downturn.
Dream Office rallied as much as Fourteen percent to $18.60 in Toronto, probably the most since December 2008. The REIT is down 51 per cent since 2013, surpassing the 14 % go to the Bloomberg Canadian REIT Index, because the collapse within the price of crude reduced interest in its Alberta property.
The Toronto-based company reported fourth-quarter results Thursday and announced a goal to market non-core assets by 2018. Additionally, it cut its distribution to $1.50 from $2.24 and boosted its credit facility to $800 million from $355 million, letting it reduce debt, purchase current or future properties, or buy back shares.
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“Today, we present an individual equity-like strategy and build a leaner, more resilient and valuable company for your unitholders,” Michael Cooper, chairman from the company, said within the statement. “Once the plan’s complete, Dream Office REIT might have the very best assets in Canada, supported by an industry-leading balance sheet and ample liquidity for growth.”
The disposition, about one-sixth in the company’s portfolio, may come from assets in Toronto’s suburbs, Ottawa, Vancouver and Saskatchewan. It forecasts net proceeds of around $700 million, or else $6 per unit, inside the sales, taking advantage of increased local and foreign interest in the country’s property, particularly from oil patch.
Dream was already discussing the sale of $300 million in properties, using the statement.
2007 Redux?
Dream Office stated it designed a similar relocate 2007, when the company sold enough to come back $1.6 billion to shareholders.
“While cutting the distribution may initially result in trading volatility, our view is that capital retention in relation to investment and repositioning of properties pays within our market/office environment,” Matt Kornack, analyst at National Bank Financial, said inside a note to clients.
Toronto-Dominion Bank raised the REIT with a strong obtain buy.
Bloomberg.com
