In a year that has been sluggish for initial public offerings, it seems Dundee Real Estate Investment Trust's chief executive Michael Cooper may be behind one of 2012's largest debuts. The industrial property holder could drop an IPO worth $176-million any day now.
While the price isn't public yet, sources collected by Bloomberg say that the cost of a piece of the new group, called Dundee Industrial REIT, will be $10 per unit with a yield in the 6.5 to 7 per cent ballpark.
Dundee REIT primed investors by announcing this plan less than two weeks ago when it made known its intention to create Dundee Industrial, which will house 86 "light industrial properties" bought from the main REIT. Sites that are migrating over are comprised of warehouses and manufacturing centres. The value of this new trust wasn't revealed at the time – the company said only that the IPO price would play a factor in deciding the amount.
From the statement issued by Dundee REIT on Aug. 17, the market learned that Dundee Industrial REIT's underwriters, TD Securities Inc., will bring the shares to market.
When the dust settles, Dundee Properties LP's post-sale stake will be up to 50 per cent. Parent company Dundee Corp. is expected to sink $21-million into the Industrial trust at the time of IPO, and Mr. Cooper would put in $9-million.