Author: TSX Stocks

Dream Unlimited has launched a new institution-backed joint venture that plans to invest up to $2 billion into rental properties across Canada’s major markets.

The joint venture waived conditions on its first investment, a portfolio of multifamily assets in Toronto’s east end, on Jan. 28. No further details about the acquisition were provided.

A spokesperson for Dream responded to RENX’s interview request by saying the corporation was unable to comment further on the joint venture at this point.

It was announced as part of a wider update of Dream’s recent multifamily activities which was released this week.

Dream develops office and residential assets in Toronto, owns stabilized income-generating assets in both Canada and the United States, and has $27 billion of assets under management across four Toronto Stock Exchange-listed trusts, its private asset management business and numerous partnerships. It also develops land and residential and income-generating assets in Western Canada. 

Expansion of Dream’s multifamily division

The joint venture is the latest step in the continued growth of Dream’s private asset management platform. The expansion of a multifamily development pipeline remains a significant driver of growth for its income property division and this venture is an opportunity to deliver value for institutional partners while adding to the company’s presence in the Canadian rental market.

Dream’s Canadian multifamily division has grown from 48 units in 2017 to 3,270 completed units.

Dream’s update on its ongoing multifamily initiatives revealed it has completed more than 1,650 rental units in downtown Toronto and two master-planned communities: Zibi in the National Capital Region of Ottawa and Gatineau; and Brighton in Saskatoon.

This includes Birch House, a 238-unit building in Canary Landing that welcomed its first residents in October. Canary Landing is a joint venture with Kilmer Group and Tricon Residential and is part of the Canary District in the east end of downtown Toronto. 

Birch House adds to Dream’s growing portfolio in the Canary District and is adjacent to Maple House, which started accepting residents in 2023 and is 78 per cent leased. 

A further 1,950 units are under construction, including Cherry House in Canary Landing and Odenak (formerly Dream LeBreton) and Block 204 at Zibi in Ottawa.

Construction financing for all three projects has been secured through the Canada Mortgage and Housing Corporation’s Apartment Construction Loan Program.

Waiver of charges will speed up Toronto developments

The City of Toronto has announced the waiver of development charges on selected projects to advance purpose-built rental construction across the city. Two of Dream’s projects under management, with a combined 2,500 units, were named as part of this waiver. 

“I think the waiver of development charges is going to make a big difference to get things started,” Dream president and chief responsible officer Michael Cooper told RENX in a November interview.

Saskatoon’s Brighton project is growing rapidly, with the completion of The Teal and a portion of Blocks 166 and JK in the fourth quarter of last year, adding 144 units to Dream’s recurring income portfolio. The recently completed developments are 93 per cent leased. 

Dream expects to continue or commence construction on 500 units within Brighton and its first purpose-built rentals in Calgary’s Alpine Park this year. It expects development and hold returns of 15 to 25 per cent over 10 years on its Western Canada apartments.

Cooper told RENX in the November interview that Dream owns 8,000 acres of land in Western Canada and has room to build approximately 80,000 more units across that region.

Dream also has a small stake in an investor group, which also includes TPG Angelo Gordon and Stadium Capital Partners, that announced an agreement to acquire a Dutch residential portfolio from European Residential REIT for $1.04 billion in September. 

The acquisition includes nearly 3,000 single-family and multifamily units across close to 90 sites in the Netherlands. The units will be managed and operated by the investor group.