Summit Industrial Income REIT is continuing to grow its development pipeline in the area surrounding Toronto. The trust and an unnamed partner will acquire a second plot of industrial land in the Grand River West Business Park in Kitchener.
Summit (SMU-UN-T) and its partner have waived conditions on the 26.5-acre development site and will acquire a 50 per cent interest in the project in an all-cash transaction. They will pay $12.9 million for their stake in the site.
"We are pleased to be adding this site to our existing pipeline of development projects in this region, one of Canada's strongest industrial markets," said Summit Industrial REIT chief operating officer Dayna Gibbs in the announcement.
"Not only is this one of Canada's tightest industrial markets, but we continue to build on our economies of scale in this area while adding to our portfolio of LEED-certified buildings upon completion."
Summit expects to close on the deal by the end of October.
Three Grand River West Business Park properties
In February, Summit acquired a similar 50 per cent interest in an adjacent 19.5-acre site at the Grand River West Business Park.
Summit intends to acquire the other 50 per cent interest in this property once the development is complete and stabilized.
It also owns another property in the area, giving the trust additional economies of scale.
Grand River West is located in an established business park close to a regional airport, major highway and railway transportation links and a planned GO commuter rail service station.
The 26.5-property is expected to accommodate two buildings totalling approximately 480,000 square feet of class-A space with street exposure, multiple access points, circulation and trailer parking.
Current plans include a 400,000-square-foot building with 40-foot clear ceiling height. Summit intends to have both buildings designated as LEED-certified in keeping with its environmental sustainability mandate.
The 19.5-acre site is expected to accommodate one 360,000-square-foot building with a proposed 40-foot ceiling height, including three road access points and a large area for truck and trailer parking.
Summit will also seek LEED certification for this development.
"The Kitchener, Waterloo, Cambridge market, including Guelph where we own interests in other ongoing development projects, is currently Canada's tightest industrial market with only a 0.6% availability rate,” Gibbs said in February when the first acquisition was announced.
“The strong demand for industrial space in and around the Greater Toronto Area is driving increased rental rates and strong stable occupancies in this region, making it an attractive development market for the REIT."
About Summit Industrial REIT
Summit Industrial Income REIT is an unincorporated open-end trust focused on growing and managing a portfolio of light industrial properties across Canada.