Welcome!

Recurring Revenue Authors: Liz McMillan, Yeshim Deniz, Carmen Gonzalez, Elizabeth White, Pat Romanski

News Feed Item

Dream Global REIT Reports Strong Second Quarter Results and Strategic Joint Venture

This news release contains forward looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained within this press release.

TORONTO, ONTARIO -- (Marketwired) -- 08/06/14 --

Editors Note: There is a photo associated with this press release.

DREAM GLOBAL REIT (TSX:DRG.UN) today reported a 10% year-over-year increase in its Q2 2014 AFFO per unit and announced that it has entered into a long-term joint venture with Public Officials Benefit Association ("POBA"). Dream Global REIT's management team will be holding a conference call tomorrow, August 7, 2014 at 2:00 p.m. (ET).

Joint Venture with POBA

Dream Global REIT has entered into a long-term joint venture with POBA, a South Korean pension fund and one of the most active overseas real estate investors in South Korea. POBA will be acquiring a 50% joint venture interest in seven of Dream Global REIT's properties for a gross proceeds of approximately EUR221 million ($322 million). The transaction remains subject to various closing conditions and is expected to close in stages during the third and fourth quarters of 2014.

"We are very excited about the opportunities that this joint venture will provide for both parties involved. Choosing Dream Global REIT as a partner is not only an endorsement of our strong operating platform but also highlights the confidence of POBA in our ability to source accretive acquisitions in the future," said Jane Gavan, President and Chief Executive Officer of Dream Global REIT. "This joint venture offers us the opportunity to diversify our sources of capital, to leverage our REIT operating platform by generating joint venture management income and to continue to take advantage of the attractive investment environment."

Q2 2014 Financial and Operating Results Highlights

--  Q2 2014 AFFO per unit increased by 10% compared to Q2 2013 - basic AFFO
    per unit was $0.22 for the quarter and $0.43 for the first six months of
    2014, compared with $0.20 and $0.39 respectively for same periods in
    2013; 
--  Strong leasing activity - the Trust completed 89,700 square feet of new
    leases and 133,100 square feet of renewals in Q2 2014, resulting in a
    retention ratio of 76% and in the seventh quarter of positive net
    absorption; 
--  Comparative portfolio occupancy increases further - the Trust's
    comparative portfolio occupancy increased to 87.7%, up 20 basis points
    during Q2 2014 and 130 basis points since the beginning of 2014; 
--  Acquisitions - subsequent to quarter end, the Trust closed the
    acquisition of "Officium" in Stuttgart for approximately EUR46.9 million
    ($68.4 million) at a going-in cap rate of 6.6%, increasing year-to-date
    total acquisitions to approximately $183 million; 
--  Dispositions - seven properties were disposed during the quarter as part
    of the Trust's continuing capital recycling program for an aggregate
    sales price of $11.9 million, or 103% of the assets' book value,
    increasing year-to-date total dispositions to approximately $31.2
    million. 

                                                                            
KEY PERFORMANCE INDICATORS                                                  
                                        June 30,     March 31,      June 30,
                                            2014          2014          2013
----------------------------------------------------------------------------
Portfolio                                                                   
Number of properties                         286           293           299
Gross leasable area                                                         
 ("GLA")                              15,679,545    15,820,974    15,404,094
Occupancy rate -                                                            
 including committed                                                        
 (1) (period-end)                          87.9%         87.7%         85.7%
Occupancy rate - in                                                         
 place (period-end)                        87.0%         86.9%         84.5%
Average in-place net                                                        
 rent per square foot                                                       
 (period-end)                            EUR8.74       EUR8.72       EUR8.14
Market rent above                                                           
 (below) in-place rent                                                      
 (%)                                        1.8%          1.5%          3.5%
 Initial Properties                        11.6%         10.6%         10.8%
 Acquisition Properties                   (6.1)%        (5.8)%        (4.1)%
----------------------------------------------------------------------------
                         Three months ended June       Six months ended June
                                             30,                         30,
                         -----------------------    ------------------------
                           2014(2)       2013(2)       2014(2)       2013(2)
----------------------------------------------------------------------------
Operating results                                                           
Investment properties                                                       
 revenue                $   67,514   $    54,413   $   134,647   $   100,777
Net rental income           47,079        36,191        92,879        63,502
 Net rental income -                                                        
  Initial Properties        20,732        19,320        42,359        38,976
 Net rental income -                                                        
  Acquisition                                                               
  Properties                26,347        16,871        50,520        24,526
FFO(3)                      26,079        21,393        50,835        37,186
AFFO(4)                     24,199        19,607        47,283        34,377
Distributions                                                               
Declared distributions  $   22,098   $    20,027   $    44,104   $    36,040
DRIP participation                                                          
 ratio (for the period)      16.2%         11.6%         17.0%         10.8%
Per unit amounts                                                            
 Distribution rate      $     0.20   $      0.20   $      0.40   $      0.40
 Basic: (6)                                                                 
 FFO                          0.24          0.22          0.46          0.42
 AFFO                         0.22          0.20          0.43          0.39
 Diluted:                                                                   
 FFO                          0.23          0.21          0.45          0.42
 Payout ratio (%):                                                          
 AFFO (basic)                91.3%        100.0%         93.2%        102.6%
----------------------------------------------------------------------------
                                        June 30,     March 31,      June 30,
                                            2014          2014          2013
----------------------------------------------------------------------------
Financing                                                                   
Weighted average                                                            
 effective interest                                                         
 rate on debt (period-                                                      
 end)                                      3.68%         3.69%         3.79%
Weighted average face                                                       
 rate of interest on                                                        
 debt (period-end)                         3.33%         3.35%         3.35%
Interest coverage                                                           
 ratio(5)                             3.39 times    3.41 times    3.40 times
Net debt-to-adjusted                                                        
 EBITDFV (years)(5)                         9.10          9.00          8.91
Level of debt (net                                                          
 debt-to-gross book                                                         
 value, net of cash)(5)                      56%           56%           51%
Debt - average term to                                                      
 maturity (years)                            4.2           4.2           4.9
Unsecured convertible                                                       
 debentures                              151,327       150,822       149,360
----------------------------------------------------------------------------
(1)  Occupancy in Q1 and Q2 2014 includes space covered by a headlease that 
     was previously classified as vacant space. The Q2 2013 occupancy rate  
     has not been restated.                                                 
(2)  Operating results for the three month and six month periods ended June 
     30, 2014 were converted at $1.496:EUR1 and $1.504:EUR1, respectively;  
     for the three month and six month periods ended June 30, 2013,         
     operating results were converted at $1.337:EUR1 and $1.335:EUR1,       
     respectively.                                                          
(3)  FFO - net income, adjusted for fair value adjustments on investment    
     property and financial instruments, share of income from equity-       
     accounted investments, internal direct leasing costs, loss on sale of  
     investment property, term debt swap settlements, loss on settlement of 
     foreign currency contracts, amortization of lease incentives, deferred 
     income taxes and income taxes on gains on sale.                        
(4)  AFFO - FFO adjusted for amortization of debt costs, deferred unit      
     compensation expense, straight line rent and the Trust's estimates of  
     normalized leasing costs and normalized non-recoverable recurring      
     capital expenditures.                                                  

GROWTH INITIATIVES

Joint venture with POBA - POBA is a South Korean pension fund for government officials and one of the most active overseas real estate investors in South Korea. Since it was founded in 1975, POBA has grown from 79,000 members to 235,000 members in 2013. POBA has been building a diversified investment portfolio focused on stable long-term returns, with a global commercial real estate portfolio that includes assets in England, China and Brazil.

"This strategic joint venture and significant acquisition of a high quality office portfolio in Germany allows us to expand into one of the most highly sought-after real estate markets in the world. With Dream, we have found a partner on the ground who is not only an experienced owner and operator of real estate but also understands our unique requirements," said Eunghan Park, Executive Managing Director of POBA.

The sale of the Trust's 50% interest in seven properties has a capitalization rate ("cap rate") of approximately 5.3% and includes ABC Bogen in Hamburg, Lowenkontor in Berlin, Werfthaus and K26 in Frankfurt, doubleU in Dusseldorf, Z-Up in Stuttgart and Marsstrasse 20-22 in Munich. The Trust intends to reinvest the net proceeds from this transaction in high quality office properties in its target markets. Dream Global REIT's acquisition pipeline remains robust.

"We are excited that we are being recognized for establishing an excellent platform in under three years that provides value to joint venture partners to co-invest with us. We now can grow with equity from the sale of properties from the original portfolio, with partners and with equity from the Canadian capital markets. The opportunities in Germany are plentiful and strategic partners like POBA will help us grow in Germany and potentially elsewhere when we identify appropriate opportunities," said Michael Cooper, Vice Chair of the Board of Trustees of Dream Global REIT.

Acquisition - on July 31, 2014, the Trust completed the acquisition of "Officium" in Stuttgart, Germany, a multi-tenant property with an excellent tenant roster that includes AXA, Deutsche Sparkassen and Oracle. The acquisition of this EUR46.9 million ($68.4 million) property has a cap rate of 6.6% and will add approximately 268,000 square feet of high quality office space in one of the Big 7 office markets in Germany to the Trust's portfolio. The Trust has negotiated 7.5-year mortgage financing for this property at a loan-to-value of approximately 60% and an interest rate of 1.99%.

To view the photo of "Officium" in Stuttgart, please visit the following link: http://www.marketwire.com/library/20140806-DRGlg.jpg.

FINANCIAL HIGHLIGHTS

Funds from operations - FFO increased to $26.1 million and $50.8 million, respectively, for the three and six months ended June 30, 2014, from $21.4 million and $37.2 million during the same periods in 2013. On a per unit basis, FFO for the three months and six months ended June 30, 2014 was $0.24/unit and $0.46/unit, respectively, compared to $0.22/unit and $0.42/unit, respectively, for the same periods in 2013. Positive absorption of space as well as completed acquisitions contributed to the increase in FFO.

Adjusted funds from operations - AFFO increased to $24.2 million and $47.3 million, respectively, for the three and six months ended June 30, 2014, from $19.6 million and $34.4 million during the same periods in 2013. On a per unit basis, AFFO for the three months and six months ended June 30, 2014 was $0.22/unit and $0.43/unit, respectively, compared to $0.20/unit and $0.39/unit, respectively, for the same periods in 2013.

CAPITAL INITIATIVES

Equity - On July 31, 2014, the Trust had 110,759,320 units outstanding. At the July 31, 2014 closing price of $9.06 per unit, the Trust's market capitalization was $1.0 billion.

Financing - On April 29, 2014, the Trust drew down a mortgage with a principal balance of $55.8 million at a fixed rate of 2.33% for a seven-year term in connection with the acquisition of connection with the acquisition of My Falkenried in Hamburg which closed in Q1.

CONFERENCE CALL DETAILS

Dream Global REIT's management team will be holding a conference call tomorrow, August 7, 2014 at 2:00 p.m. (ET). To access the conference call, please dial 1-866-229-4144 in Canada and the United States or 416-216-4169 elsewhere and use passcode 8694 191#. A taped replay of the call will be available for ninety days. For access details, please go to Dream Global REIT's website at www.dreamglobalreit.ca and click on the News and Events link, then click on Calendar of Events.

Information appearing in this news release is a select summary of results. The financial statements and management's discussion and analysis for the Trust are available at www.dreamglobalreit.ca and on SEDAR at www.sedar.com.

Dream Global REIT is an unincorporated, open-ended real estate investment trust that provides investors with the opportunity to invest in commercial real estate exclusively outside of Canada. Dream Global REIT's portfolio currently consists of approximately 15.7 million square feet of gross leasable area of office, industrial and mixed use properties across Germany. For more information, please visit www.dreamglobalreit.ca.

This press release may contain forward-looking information within the meaning of applicable securities legislation. Forward looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream Global REIT's control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, global and local economic and business conditions; the financial condition of tenants; our ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest and currency rate functions. Our objectives and forward-looking statements are based on certain assumptions, including that the Canadian and German economies remain stable, interest rates remain stable, conditions within the real estate market remain consistent, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forward-looking information in this press release speaks as of the date of this press release. Dream Global REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise. Additional information about these assumptions and risks and uncertainties is contained in Dream Global REIT's filings with securities regulators, including its latest annual information form and MD&A. These filings are also available at Dream Global REIT's website at www.dreamglobalreit.ca.

Contacts:
P. Jane Gavan
President and Chief Executive Officer
(416) 365-6572
[email protected]

Rene D. Gulliver
Chief Financial Officer
(416) 365-5447
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
Cloud Expo | DXWorld Expo have announced the conference tracks for Cloud Expo 2018. Cloud Expo will be held June 5-7, 2018, at the Javits Center in New York City, and November 6-8, 2018, at the Santa Clara Convention Center, Santa Clara, CA. Digital Transformation (DX) is a major focus with the introduction of DX Expo within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive ov...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
Product connectivity goes hand and hand these days with increased use of personal data. New IoT devices are becoming more personalized than ever before. In his session at 22nd Cloud Expo | DXWorld Expo, Nicolas Fierro, CEO of MIMIR Blockchain Solutions, will discuss how in order to protect your data and privacy, IoT applications need to embrace Blockchain technology for a new level of product security never before seen - or needed.
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
SYS-CON Events announced today that Evatronix will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Evatronix SA offers comprehensive solutions in the design and implementation of electronic systems, in CAD / CAM deployment, and also is a designer and manufacturer of advanced 3D scanners for professional applications.
SYS-CON Events announced today that Synametrics Technologies will exhibit at SYS-CON's 22nd International Cloud Expo®, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Synametrics Technologies is a privately held company based in Plainsboro, New Jersey that has been providing solutions for the developer community since 1997. Based on the success of its initial product offerings such as WinSQL, Xeams, SynaMan and Syncrify, Synametrics continues to create and hone inn...
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
"Digital transformation - what we knew about it in the past has been redefined. Automation is going to play such a huge role in that because the culture, the technology, and the business operations are being shifted now," stated Brian Boeggeman, VP of Alliances & Partnerships at Ayehu, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
The 22nd International Cloud Expo | 1st DXWorld Expo has announced that its Call for Papers is open. Cloud Expo | DXWorld Expo, to be held June 5-7, 2018, at the Javits Center in New York, NY, brings together Cloud Computing, Digital Transformation, Big Data, Internet of Things, DevOps, Machine Learning and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding busin...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, discussed some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he covered some of the best practices for structured team migration an...
No hype cycles or predictions of a gazillion things here. IoT is here. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, an Associate Partner of Analytics, IoT & Cybersecurity at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He also discussed the evaluation of communication standards and IoT messaging protocols, data...
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, discussed how they built...
22nd International Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, and co-located with the 1st DXWorld Expo will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud ...
22nd International Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, and co-located with the 1st DXWorld Expo will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud ...
DevOps at Cloud Expo – being held June 5-7, 2018, at the Javits Center in New York, NY – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Among the proven benefits,...
@DevOpsSummit at Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, is co-located with 22nd Cloud Expo | 1st DXWorld Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait...