Skyline Industrial REIT has acquired a portfolio of Edmonton and Calgary industrial buildings for $309.25 million. (Courtesy Skyline)

Skyline Industrial REIT has completed its largest-ever transaction, entered the City of Edmonton and expanded its holdings in Calgary with the acquisition of a $309.25 million portfolio comprising more than two million square feet of space.

Skyline said the vendor is a “major Canadian pension plan” but did not identify the former owner.

It said in a release Monday afternoon the transaction closed on Sept. 8. 

The properties are in four business parks and are 97.7 per cent occupied. The portfolio comprises 16 buildings on 129.5 acres of land. Together, the properties accommodate 51 tenants.

“Largest-ever” transaction for Skyline

“The transaction is not only the largest ever for Skyline Industrial REIT, but also the largest closing across all of Skyline Group of Companies’ investment products,” said Jason Castellan, co-founder and chief executive officer of the REIT’s parent, Guelph-based Skyline Group of Companies, in the announcement. 

“This milestone demonstrates the dedication and hard work of all our people across the group of companies and our confidence in the markets across Canada where we invest.”  

The four business parks are located in what Skyline calls “sought-after sub-markets of Calgary and Edmonton” and offer excellent access to transportation networks. 

“This transaction was a momentous one for Skyline Industrial REIT and we are thrilled to be entering the City of Edmonton, expanding our Calgary holdings and enhancing our presence across Canada,” said Mike Bonneveld, president of Skyline Industrial REIT, in the announcement. 

“Each of the properties provides exceptional logistics, distribution and warehousing facilities to its tenants — which translates to excellent service to the tenants’ customers.

“This acquisition aligns with the REIT’s strategy and targeted asset format in terms of geography, clear height, tenant profile and flexibility.” 

Redeploy capital from dispositions

The REIT recently completed a strategic disposition program and has significantly increased its weighting in new modern industrial assets and developments.

Proceeds from those asset sales are being redeployed into new acquisitions and toward development partnerships in the REIT’s pipeline. 

“The redeployment of the capital generated from the disposition strategy over the past 15 months has given us the opportunity to acquire these assets and enhance our portfolio to the utmost,” said Bonneveld in the release. 

“We believe this transaction is a strategic move for the REIT and for Skyline Group of Companies. We thank CBRE Toronto, Calgary and Edmonton for their assistance with this transaction.” 

The REIT believes there is significant upside to the portfolio as both Calgary and Edmonton continue to experience significant net rental growth similar to other major markets across Canada.   

According to CBRE’s Q2 2022 Canada Industrial report, Calgary leasing activity has persisted into Q2 2022 with two million square feet of net positive absorption and the market has experienced rapid rent acceleration, with rents rising 15.3 per cent year-over-year to $9.49 per square foot.  

Skyline Industrial REIT’s name change

Skyline Industrial REIT’s portfolio now consists of 57 properties in 33 communities in five provinces across Canada, with a total of 8,753,999 square feet of space. 

Skyline Industrial REIT is also currently open for investment — its first time opening in nearly a year. 

“We are determined to continue our forward-thinking momentum and continue to position the REIT as an industry leader with more future transactions such as this,” said Bonneveld. 

Skyline Industrial REIT was previously known as Skyline Commercial REIT, but changed its name in June to better reflect its new focus. 

Skyline Industrial REIT is a privately owned and managed portfolio of industrial properties, focused on acquiring warehousing, distribution and logistics-centred properties along major highway corridors and transportation routes in Canada. 

Skyline Industrial REIT is distributed as an alternative investment product through Skyline Wealth Management Inc., the preferred exempt market dealer for the REIT.