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Dundee REIT buys Whiterock

The M&A streak in Canada's Real Estate Investment Trust (REIT) sector continued on Tuesday. Dundee REIT (D.UN-T) announced it has agreed to buy Whiterock (WRK.UN-T) for $16.25 per unit in cash or 0.4729 Dundee REIT units.

The deal has been approved by both boards.

Dundee REIT, currently the sixth largest REIT in Canada by market capitalization, will become the fourth largest REIT and will become the biggest provider of office space in the country.

"I am delighted to announce our agreement to acquire Whiterock," Michael Cooper, CEO of Dundee REIT, said in statement. "We have watched the evolution and growth of Whiterock with great interest for a number of years and are excited to add its attractive portfolio of assets to the Dundee portfolio."

The acquisition is the third move by Dundee in the last year to expand its portfolio. In February it bought Realex Properties for $373 million and in July purchased the Blackstone-Slate portfolio of office properties for $690 million.

Analysts say the deal is positive for Dundee.

"This transaction further affirms Dundee's ability to grow its portfolio in a meaningful and accretive manner," Jenny Ma at Desjardins Securities said in a note to clients. "Upon completion of the transaction, Dundee's portfolio should total over 30 million square feet of predominantly office properties, equating to growth of around 60 percent (by gross leasable area)."

Dennis Mitchell of Sentry Investments tells BNN this is a "great transaction for the space and it shows where values are at arms length parties."

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