Canadian REIT Dundee International has completed the acquisition of an office property in the German city of Düsseldorf.

Canadian REIT Dundee International has completed the acquisition of an office property in the German city of Düsseldorf.

The investment volume of €75 mln reflects a yield of 7.6% and a discount of 12% to the latest appraised market value.

The vendor is the AXA Immoselect open-ended property fund which is in liquidation.

The complex is located in the Oberkassel district and consists of one seven-storey and one five-storey building, both of which were completely rebuilt and expanded in 2005, as well as another five-storey office building constructed in 2007.

The property provides around 22,000 m2 of gross leasable area and is fully let with a weighted average lease term of 6.4 years. Major tenants include law firm Freshfields Bruckhaus Deringer and Grohe.

The deal marks the REIT's third office acquisition in Düsseldorf since its initial public offering in August 2011.

'We are excited to have added such a high-quality asset in one of the most desirable markets in Germany to our platform on accretive terms to our unitholders,' said Jane Gavan, CEO of the REIT. 'We continue to execute our strategy of expanding Dundee International’s presence in the Big 7 office markets in Germany.'

The transaction was fully funded with cash on hand. In addition, the REIT has entered into a mortgage agreement with a principal balance of €46.5 mln at a fixed interest rate of 2.32% with an average term to maturity of five years. The mortgage funds are expected to be drawn on or about December 23, 2013. The transaction was structured as a share deal.

'On a pro forma basis, we have cash on hand to enable us to complete a further $165 to $170 mln of acquisitions. We intend to continue to deploy this cash by the end of the first quarter of 2014,' commented Rene Gulliver, CFO of the REIT.