Summit Industrial Income REIT has completed the acquisition of the remaining 50-per-cent ownership of two recently constructed properties in the Hanlon Creek Business Park in Guelph, Ont., totalling 441,921 square feet of leasable area from Cooper Construction Ltd. Summit acquired its initial 50% interest in the two properties in September 2019 and with occupancy stabilized at 100% effective January 1, 2022, exercised its right to acquire the remaining 50% interest.
Summit paid approximately $54.9 million for the remaining 50% in the two properties. When combined with Summit's existing ownership interest in the properties, Summit's total investment is approximately $84.6 million, generating a consolidated capitalization rate of approximately 4.7%. Including these two properties, Summit has now developed 828,802 square feet of new Class A space in the Hanlon Creek Business Park, representing a total investment of $144.1 million.
The two acquisition properties are brand new, modern Class A buildings adjacent to properties already owned by Summit in this newly-created industrial park near Highway 401. They have 32-foot clear ceiling heights with ample parking and shipping areas. The weighted average lease term across the two buildings is 7.7 years with average contractual annual rental increases of approximately 2.3%. Both buildings are Leadership in Energy and Environmental Design (LEED) certified.
"In addition to our external acquisition program, we are pleased with the continued activity of our development program both on balance sheet and with our joint-venture partners such as Cooper. These two properties demonstrate the REIT's ability to execute on our development strategy, particularly in the strong GTA market, from both a return perspective and our commitment to ESG by delivering brand new, well-located, LEED certified buildings to the REIT's portfolio," commented Dayna Gibbs, Chief Operating Officer.
About Summit Industrial Income REIT
Summit Industrial Income REIT is an unincorporated open-end trust focused on growing and managing a portfolio of light industrial properties across Canada. Summit's units are listed on the TSX and trade under the symbol SMU.UN.