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Welsh Property Trust CEO Reviews Canadian REIT Launch

01/07/2014 | By Sarah Borchersen-Keto

Scott Frederiksen, CEO of Welsh Property Trust LLC, joined REIT.com for a CEO Spotlight video interview at REITWorld 2013: NAREIT’s Annual Convention for All Things REIT at the San Francisco Marriott Marquis.

Frederiksen provided an update on recent developments at the company, including the creation and listing of Welsh Property Trust Industrial REIT on the Toronto Stock Exchange.

Frederiksen explained that in April, Welsh Property Trust contributed 8.6 million square feet of its industrial portfolio to a newly formed entity, WPT Industrial REIT. The new REIT was then taken public in Canada, raising $100 million. WPT acts as the external asset and property manager of WPT Industrial.

“Investors in Canada welcomed the opportunity to invest in high-quality industrial, and they like exposure to the U.S. because it gives them U.S. dollar-paid dividends and… exposure to a recovering economy,” he said. Frederiksen added that the IPO proceeds will be reinvested in real estate in order to further grow and diversity the portfolio.

In fact, reinvestment has already started, according to Frederiksen. He pointed out that in July, WPT Industrial REIT completed the acquisition of an industrial property in Illinois for approximately $ 53 million.

Frederiksen was also asked about the rise of e-commerce and supply chain consolidation and how that trend has impacted the company.

“It’s had a significant positive impact on our portfolio, and the reason it has is that if you dig deeper into what we own, we own a very specific niche of the industrial market: We focus on high-function distribution buildings,” he said. “In fact, if you look at the 10 million square feet that’s in the REIT today, the average building size is over a quarter of a million square feet , the average age is about 12 years, which is pretty new for industrial space, and the average clear height , even more significantly, is 31 feet.”

He added that e-commerce  companies are “always looking for the most functional space in the best markets, and so they’ve had a significant influence on our portfolio. Today, about a third of our portfolio is occupied by e-commerce companies, and we expect that to continue going forward.”