Click here to close now.


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
--  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
--  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

KEY PERFORMANCE INDICATORS                                                  
                                        June 30,     March 31,      June 30,
                                            2014          2014          2013
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 -                                                        
  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
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
 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
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,       
(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.                                                  


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:


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.


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.


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 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 and on SEDAR at

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

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

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.

Latest Stories
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
Today’s connected world is moving from devices towards things, what this means is that by using increasingly low cost sensors embedded in devices we can create many new use cases. These span across use cases in cities, vehicles, home, offices, factories, retail environments, worksites, health, logistics, and health. These use cases rely on ubiquitous connectivity and generate massive amounts of data at scale. These technologies enable new business opportunities, ways to optimize and automate, al...
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, will show how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants will get the download information, scripts, and complete en...
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. Migration to cloud shifts computing resources from your data center, which can yield significant advantages provided that the cloud vendor an offer enterprise-grade quality for your application.
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of, and Fred Yatzeck, principal architect leading product development at, discussed how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at th...
Manufacturing has widely adopted standardized and automated processes to create designs, build them, and maintain them through their life cycle. However, many modern manufacturing systems go beyond mechanized workflows to introduce empowered workers, flexible collaboration, and rapid iteration. Such behaviors also characterize open source software development and are at the heart of DevOps culture, processes, and tooling.
DevOps is gaining traction in the federal government – and for good reasons. Heightened user expectations are pushing IT organizations to accelerate application development and support more innovation. At the same time, budgetary constraints require that agencies find ways to decrease the cost of developing, maintaining, and running applications. IT now faces a daunting task: do more and react faster than ever before – all with fewer resources.
In his session at DevOps Summit, Bryan Cantrill, CTO at Joyent, will demonstrate a third path: containers on multi-tenant bare metal that maximizes performance, security, and networking connectivity.
The web app is agile. The REST API is agile. The testing and planning are agile. But alas, data infrastructures certainly are not. Once an application matures, changing the shape or indexing scheme of data often forces at best a top down planning exercise and at worst includes schema changes that force downtime. The time has come for a new approach that fundamentally advances the agility of distributed data infrastructures. Come learn about a new solution to the problems faced by software organ...
Any Ops team trying to support a company in today’s cloud-connected world knows that a new way of thinking is required – one just as dramatic than the shift from Ops to DevOps. The diversity of modern operations requires teams to focus their impact on breadth vs. depth. In his session at DevOps Summit, Adam Serediuk, Director of Operations at xMatters, Inc., will discuss the strategic requirements of evolving from Ops to DevOps, and why modern Operations has begun leveraging the “NoOps” approa...
The IoT market is on track to hit $7.1 trillion in 2020. The reality is that only a handful of companies are ready for this massive demand. There are a lot of barriers, paint points, traps, and hidden roadblocks. How can we deal with these issues and challenges? The paradigm has changed. Old-style ad-hoc trial-and-error ways will certainly lead you to the dead end. What is mandatory is an overarching and adaptive approach to effectively handle the rapid changes and exponential growth.
The last decade was about virtual machines, but the next one is about containers. Containers enable a service to run on any host at any time. Traditional tools are starting to show cracks because they were not designed for this level of application portability. Now is the time to look at new ways to deploy and manage applications at scale. In his session at @DevOpsSummit, Brian “Redbeard” Harrington, a principal architect at CoreOS, will examine how CoreOS helps teams run in production. Attende...
Mobile messaging has been a popular communication channel for more than 20 years. Finnish engineer Matti Makkonen invented the idea for SMS (Short Message Service) in 1984, making his vision a reality on December 3, 1992 by sending the first message ("Happy Christmas") from a PC to a cell phone. Since then, the technology has evolved immensely, from both a technology standpoint, and in our everyday uses for it. Originally used for person-to-person (P2P) communication, i.e., Sally sends a text...
The APN DevOps Competency highlights APN Partners who demonstrate deep capabilities delivering continuous integration, continuous delivery, and configuration management. They help customers transform their business to be more efficient and agile by leveraging the AWS platform and DevOps principles.
As-a-service models offer huge opportunities, but also complicate security. It may seem that the easiest way to migrate to a new architectural model is to let others, experts in their field, do the work. This has given rise to many as-a-service models throughout the industry and across the entire technology stack, from software to infrastructure. While this has unlocked huge opportunities to accelerate the deployment of new capabilities or increase economic efficiencies within an organization, i...