https://www.pie-mag.com/articles/11122/canada-s-dream-global-enters-austria-with-euro-189m-office-buy/
Canada’s Dream Global enters Austria with €189m office buy
07 January 2016, 08:59 AM
Toronto-based Dream Global REIT, which so far has invested only in German office property, has entered Austria, buying a 50% interest in the Rivergate office in the capital Vienna for €189m in a new joint venture with a Asian sovereign wealth fund.
The purchase was made at a cap rate of 5.2% and Dream said it expects upside potential through leasing and annual indexation. The firm secured a five-year mortgage at 55% loan-to-value. “We are excited about our expansion into the highly attractive Vienna market, which has long served as a strategic gateway to central and eastern Europe for many multinational companies,” said CEO Jane Gavan in a year-end release. “We see Rivergate as the ideal investment for our first venture outside of Germany.” Though the Asian partner was not named, Dream in 2014 sold 50% of eight assets to the South Korean Public Officials Benefit Association.
Located on the Danube waterfront, and adjacent to Handelskai station, a key transit hub, Rivergate offers 574,000 sq.ft. and comprises two towers connected by an enclosed atrium. The property is 95% occupied or committed with a weighted average lease term of 7.3 years. Major tenants include the City of Vienna, Thales, Global Blue, Grant Thornton, Sky and Mars. Built in 2010, it was the first property in Austria to receive LEED Platinum sustainability certification.
Dream also announced the refinancing of its initial portfolio with a €244m, five-year facility with Bank of Bank of America Merrill Lynch, that bears a variable interest rate equal to three-month EURIBOR capped at a weighted average 1.03%, and margin of 225bp. It expects annual debt service savings of over €11m after the refinancing. pie