TORONTO & LONDON, July 31 — Dream Industrial Real Estate Investment Trust (TSX: DIR.UN) (the “Trust” or the “REIT” or “DIR”) today announced that the Trust and Dream Unlimited Corp. (TSX: DRM) (“Dream”), have entered into definitive agreements for Dream to acquire Chancerygate Limited (“Chancerygate” or “CG”), a U.K.-based industrial developer and asset manager with a 30-year track record in the multi-let industrial (“MLI”) sector.
As part of the transaction, Dream will assume Chancerygate’s investment management and development platform. Dream Industrial REIT will acquire Chancerygate’s wholly owned real estate assets and co-investment interests across its managed ventures for consideration of approximately £78 million ($147 million), gross of certain in-place debt on the wholly owned real estate assets, and expects to fund an additional £25 million ($47 million) to complete the developments. The final purchase price will be subject to customary post-closing adjustments including working capital items. The REIT intends to fund the acquisition through a combination of cash on hand, assumed debt and its unsecured revolving credit facility. The transactions are expected to close in August 2026.
Transaction Highlights
- Acquisition of wholly owned MLI portfolio. The wholly owned portfolio is comprised of 0.5 million square feet of high-quality development assets across four projects in the U.K. and one project in Spain. Three of the projects are at or nearing substantial completion and two sites are under development. The REIT’s total cost basis on these assets is expected to be approximately £80 million ($150 million), gross of certain in-place debt and including £25 million ($47 million) of estimated costs to complete the developments. The REIT expects to realize an unlevered yield on cost of approximately 8% on these projects.
- Immediate scale in private ventures in Europe. Chancerygate’s private partnerships comprise £1.2 billion in gross asset value with global institutional investors. As part of the transaction, DIR will acquire Chancerygate’s minority stake in these joint ventures for a total consideration of approximately £23 million (C$43 million) representing an expected stabilized cap rate of over 7.5%. The scale of the private ventures creates opportunities for the REIT to expand its property management platform.
- New programmatic pan-European MLI joint venture. The REIT, together with Dream and Chancerygate, have advanced negotiations to form a new programmatic joint venture with a leading global institutional investor. The joint venture is expected to pursue acquisition and development opportunities in the MLI sector across Europe with a target gross asset value of approximately €500 million ($800 million).
- The transaction expands the REIT’s footprint into the U.K. multi-let industrial sector, a primary target market for the REIT and a sub-sector underpinned by structural tailwinds including constrained supply, low-single-digit vacancy and healthy outlook for rental rate growth.
- Transaction is expected to be accretive to DIR’s diluted FFO per unit upon stabilization of wholly owned development assets, with additional upside potential from property management on the private ventures in Europe.
“Over the past several years, Dream Industrial REIT has built a strong urban industrial platform focused on the Netherlands and Germany. With the Chancerygate transaction, we enter the U.K. multi-let industrial market with a high-quality portfolio that is expected to deliver strong returns supported by robust fundamentals. The transaction also provides us with immediate scale in Europe for our rapidly growing strategic private ventures segment creating opportunities to drive new sources of revenue as we grow alongside our partners,” said Alexander Sannikov, Chief Executive Officer of Dream Industrial REIT.
High-quality Wholly Owned Portfolio
The REIT will acquire Chancerygate’s five wholly owned balance sheet development sites with total target gross leasable area of 510,000 square feet. Four assets are located in the U.K. across core markets in England, including the Southeast, Midlands and Northwest, and one asset is in Valencia, Spain.
One project in the U.K. totaling 104,000 square feet has reached substantial completion in Q1 2026. Two projects totaling 184,000 square feet are expected to achieve substantial completion in Q3 2026. These assets are currently in active discussions with potential occupiers. The remaining two projects also have a multi-tenant layout and can accommodate up to 20 tenants. These projects are expected to reach substantial completion in H2 2027.
The REIT’s total cost basis for these assets is expected to be approximately £80 million (C$150 million), gross of certain in-place debt and including £25 million ($47 million) of estimated costs to complete the developments. The projects are expected to be stabilized gradually over the next 6 to 18 months and generate an unlevered stabilized yield on cost of approximately 8%.
“The U.K. multi-let industrial market is at a highly compelling entry point for DIR, supported by structurally constrained supply, low vacancy, a limited development pipeline and a diversified occupier base. With long lease terms, upward-only rent reviews and strong e-commerce-driven demand, the sector offers attractive fundamentals and embedded rental growth that align well with the REIT’s existing urban industrial strategy,” said Bruce Traversy, Chief Investment Officer of Dream Industrial REIT.
Accelerating Strategic Private Ventures in Europe
The REIT’s private ventures strategy allows it to scale the platform by participating alongside leading global institutional investors in various portfolio strategies including development, core+ and value-add investing. The returns from these ventures can be further enhanced where DIR is able to leverage its operating platforms and generate recurring revenue from property management and leasing services. The Trust’s private ventures are comprised of five vehicles in North America with a total asset value of over $9 billion as of March 31, 2026 that generate over $24 million of property management income on an annualized basis.
The Chancerygate transaction results in significant growth for DIR’s private ventures business in Europe. The REIT will gain immediate scale across several existing institutional joint ventures with a total gross asset value of £1.2 billion (C$2.2 billion).
The existing joint venture portfolio is comprised of 4.7 million square feet of existing MLI assets and 3.2 million square feet of assets in various stages of development. As part of the transaction, DIR will acquire Chancerygate’s minority stake in these joint ventures for consideration of approximately £23 million (C$43 million), representing an expected stabilized cap rate of over 7.5% upon completion of development projects and realization of built-in mark-to-market potential on existing assets. The existing joint ventures are largely fully deployed and are currently focusing on value-add initiatives such as lease-up of vacancy, marking rents to market and completion of development and intensification projects.
By value, 90% of the assets in the joint ventures are located in the U.K., resulting in significant scale in the market and creating opportunities for the REIT to establish a vertically integrated property management platform in the U.K. over time.
As part of the transaction, DIR, together with Dream and Chancerygate, has advanced negotiations with a leading global institutional investor to form a new programmatic JV. The new joint venture is expected to pursue acquisition and development opportunities in the MLI sector across Europe with a target gross asset value of approximately €500 million ($800 million). The REIT is expected to have a 5% stake in the new joint venture and provide property management and leasing services in the Netherlands and Germany, where it has an in-house platform.