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Magna International Inc a ‘highly probable’ buyer of some Granite REIT assets, analyst says

Granite, which owns 30 million square feet of industrial properties in North America and Europe, counts Magna as its largest tenant with about 82 per cent of its annualized lease payments coming from the auto-parts manufacturer.

Granite Real Estate Investment Trust is considering sales of its assets, and Magna International Inc. is a \”highly probable\” buyer of its special-purpose facilities, according to Desjardins analyst Michael Markidis.

Granite, which owns $ 30 million square feet of industrial properties in North America and Europe, counts Magna since it\’s largest tenant with about 82 per cent of its annualized lease payments coming from the auto-parts manufacturer.

The REIT said Friday that it is \”exploring a possible sale of certain of its assets to interested parties\” as part of a \”comprehensive review of strategic alternatives available to best enhance the long-term interests of Granite and every one of its stakeholders.\”

\”In our view, it\’s highly probably that Magna is interested in buying some, if not all, of the special purpose facilities owned by Granite – it currently operates in,\” Markidis wrote in a note to clients.

\”We would not rule out interest for the whole portfolio from another buyer. Having said this, most of the significant leases provide Magna with a right of first refusal, which generally provides Magna using the right to match any third-party offer within a prescribed period of time.\”

Magna said it doesn\’t comment on speculation.

Granite units rose 6.9% on Friday to shut at $42.85 around the Toronto Stock Exchange.

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