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Highlights
- Dream Residential Real Estate Investment Trust (REIT) is all set to debut on the Toronto Stock Exchange (TSX).
- While 2021 saw the TSX break records in terms of IPOs, the first three months of 2022 have been noticeably slow.
- Dream Residential REIT is reportedly the first corporate IPO to cross the $150-million mark in Canada this year.
Dream Residential Real Estate Investment Trust (REIT) is all set to debut on the Toronto Stock Exchange (TSX), and some believe this could be the much-awaited silver lining for Canada’s seemingly stunted initial public offerings (IPO) season.
While 2021 saw the TSX break records in terms of IPOs, the first three months of 2022 have been noticeably slow. As per the data released by the TMX Group, the TSX saw 34 IPOs in Q3 2022, which was down by 38.2 per cent year-over-year (YoY).
Dream Residential REIT, reportedly the first corporate IPO to cross the $150-million mark in Canada this year, is a “newly created” real estate investment trust partly handled by a unit of property giant Dream Unlimited Corp. According to its IPO filings, the new vehicle was formed to focus on purchasing multi-residential rental properties in the US.
Once its IPO is done, it plans to own a preliminary portfolio of some 16 multi-residential properties comprising 3,432 units in markets across the Sunbelt and Midwest regions in the US, the company said.
Dream Residential Real Estate Investment Trust IPO details
The real estate player has announced that its IPO, launched across Canada, will see some 9.62 million units of the REIT offered at a price of US$ 13 apiece.
Dream Residential REIT said that it expects to raise about US$ 125 million in proceeds and close its IPO on Friday, May 6.
While the TSX has “conditionally” greenlit its listing, Dream Residential REIT units are likely to start trading on the senior Canadian exchange in US dollars under the ticker of ‘DRR.U’ on Friday.
In its IPO documents, Dream Residential REIT said that it plans to utilize the net proceeds raised from its IPO to fund some acquisitions and general trust uses.
Bottomline
The apartment market seems to be going strong in the US while rents continue to climb higher. In such a scenario, Dream Residential REIT, which aims to own and manage multi-residential rental properties south of the border, could note quite a bit of growth in demand.
The flourishing stream of IPOs in Canada was a big billion-dollar deal in 2021. In 2022, however, inflation, surging interest rates, war and the unrelenting COVID-19 seem to have blended to choke the demand for new listings. Dream Residential REIT’s TSX debut could perhaps clear a path for a better second quarter for IPOs in Canada.
