By John Tilak
TORONTO, June 4 (Reuters) - Real estate-focused private
equity firm KingSett Capital is set to acquire 50 percent of
Scotia Plaza, Canada's second tallest office building, from
Dream Office REIT D_u.TO and H&R REIT HR_u.TO , according to
two sources familiar with the situation.
The potential sale comes about four years after Dream Office
REIT, then called Dundee REIT , acquired two-thirds of the 2
million square-foot Scotia Plaza complex. H&R REIT bought the
rest. The total sale price was about C$1.3 billion ($1.01
billion).
The sellers held discussions of interest with a range of
foreign players, including Chinese firms Anbang Insurance Group
Co ANBANG.UL and Fosun Group, as well as sovereign wealth fund
Abu Dhabi Investment Authority, or ADIA, said the sources, who
declined to be named as the matter was not public yet.
As per the deal terms, Dream Office will sell about 16.66
percent of Scotia Plaza and H&R REIT has decided to sell its
entire stake, which comes to a third of the complex, the sources
said. Dream Office will own the remaining half and expects to
keep management control, they said.
The 68-story building in the heart of Toronto's financial
district is a prominent landmark. It has been undergoing
renovations in recent months and sections have been closed to
facilitate the changes.
TD Bank and CBRE have been advising Dream Office on the
deal.
While saying that an announcement is expected soon, the
sources cautioned that a deal could still fall apart.
Founded in 2002, Toronto-based KingSett invests in a range
of real estate assets in major Canadian cities. Its office
property portfolio includes Calgary Place and 2 Bloor Street
West, a 34-story building in downtown Toronto.
Dream Office said earlier this year that it is looking to
sell non-core assets worth C$1.2 billion over the next three
years.
KingSett, Dream Office and H&R REIT did not immediately
respond to requests for comment on Saturday.
($1 = 1.2929 Canadian dollars)