Urbacon & Summit Industrial Income REIT To Merge

data center stock pic
Jan 3, 2018
by Josh Anderson

TORONTO, CANADA — Summit Industrial Income REIT will enter into a joint venture partnership with Urbacon Montreal Limited Partnership to develop, own and operate high-yielding, state-of-the-art digital data centres in key markets across Canada. Summit will now enjoy the exclusive privelege of participating in Urbacon’s future data centre projects all across Canada.

“We are very pleased to be establishing this new relationship with Urbacon, Canada’s most experienced participant in building and operating complex data centre properties. With more than twenty-five years of experience in design-built data centre development and operations, to date Urbacon has built more than 2.1 million square feet of data centre properties,” Summit’s Chief Executive Officer, Paul Dykeman, released in a prepared statement.

“We are very excited to be entering this high yielding and fast growing market, another example of how, with the significant increase in the size and scale of our asset base over the last year, we are now able to do more highly accretive value added investing for the benefit of our Unitholders,” continued Dykeman. “With these transactions, and the other acquisitions totaling $138 million recently announced, we have now fully invested the proceeds of our $103.5 million equity offering completed on December 13, 2017 while maintaining a debt leverage ratio of approximately 54%,” Mr. Dykeman concluded.

The first investment into Urbacon on the part of Summit will be a 50% interest purchase in Urbacon’s Data Centre One (“DC1”), located in Richmond Hill, Ontario’s Barker Business Park Digital Campus. The first of five stand-alone data centres that will be constructed in the Urbacon-owned Barker Business Park Digital Campus, DC1 is a brand new, Tier IV, purpose-built, state-of-the-art 10 MW data centre currently 50% leased to a major global cloud provider under a fifteen-year term. Summit will assume a 50% share of construction debt for a total equity investment of $15 million.

Summit has also extended a $15.8 million mezzanine loan to Urbacon. With that loan, Urbacon will purchase its current partner’s 50% interest in the recently completed state-of-the-art data centre located in downtown Montreal, Quebec. It is the only stand-alone, purpose-built data centre in the city. Summit has the option to convert its loan into a 50% ownership interest in the property. The nine-storey property is power-ready for occupancy with 16 MW of power available, and Urbacon has received significant interest in leasing space in the building. Finally, Summit has extended a three-year $14.3 million working capital loan to Urbacon, to primarily develop additional data centres in the Barker Business Park Digital Campus and other key markets. The overall $45 million initial cash investment in the data centre program produces an accretive yield of between 8%-10%.

About Summit: Summit Industrial Income REIT is an unincorporated open-end trust focused on growing and managing a portfolio of light industrial properties across Canada. Summit’s units are listed on the TSX and trade under the symbol SMU.UN. For more information, please visit our web site at

About Urbacon: Urbacon has been a leader in the Canadian construction industry for over 30 years. It has successfully completed numerous projects in a variety of markets for a range of clients, from government office and hotel fit-outs to educational facility additions and mission critical design-builds. At the forefront in developing innovative power and communication systems and resolving mission-critical business continuity and IT infrastructure challenges, Urbacon’s expertise and experience is extensive.

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