Dundee International REIT announces update on Deutsche Post's 2014 termination rights

 Dundee International REIT announces update on Deutsche Post's 2014 termination  rights  This news release contains forward looking information that is based upon  assumptions and is subject to risks and uncertainties as indicated in the  cautionary note contained within this press release.  TORONTO, Sept. 3, 2013 /CNW/ - DUNDEE INTERNATIONAL REIT (DI.UN - TSX) is  pleased to provide an update with respect to Deutsche Post's 2014 lease  termination rights in respect of 59 properties.  Of the total 1.9 million square feet of gross leasable area ("GLA") subject to  Deutsche Post's 2014 termination rights, Dundee International REIT ("REIT")  has leased or entered into negotiations to lease, sell or redevelop  approximately 1.3 million square feet, or 67% of the total space subject to  termination.  In June 2013, the REIT and Deutsche Post agreed to extend Deutsche Post's  termination rights in respect of 54 buildings to August 31, 2013 in order to  find a mutually beneficial way to address Deutsche Post's future space  requirements. The REIT is pleased to announce that Deutsche Post has agreed to  continue to lease approximately 764,000 square feet, or 74% of the space it  occupies in the 54 buildings, beyond June 30, 2014. Of the 764,000 square  feet, Deutsche Post has agreed to amend its leases for approximately 619,000  square feet by extending the term of such leases for 5 years commencing July  1, 2014 and to waive its 2014 termination rights with respect to the balance  of such space.  As previously described in our press release dated June 24, 2013, the REIT had  received notice of termination in respect of 5 properties representing 613,000  square feet of space effective July 1, 2014. Of the space terminated by  Deutsche Post in these properties, approximately 261,000 square feet, or 43%,  has already been leased, is in lease negotiations, or has been identified for  redevelopment or sale.  The REIT is presently in discussions with Deutsche Post to lease back  additional terminated space. As well, the REIT is in discussions with Postbank  to remain as a direct tenant in a large number of the locations in which  Postbank presently sublets space from Deutsche Post. If these discussions are  successful, the REIT expects to lease an additional 258,000 square feet of the  terminated space within 90 days.  After factoring in the Deutsche Post leases, asset planning activities  including active lease discussions, planned sales and redevelopment, this  leaves 641,000 square feet of space, or only 4% of the REIT's total GLA, to be  addressed by the REIT.  CEO Jane Gavan commented: "We are pleased with the outcome of the negotiations  with Deutsche Post and with the terms of the agreement reached between us,  which we believe are beneficial to both parties. By working with Deutsche Post  over the past few years we were able to generate better solutions to their  needs that work for us as well. As a result of these efforts, we have retained  them as a tenant in many of our properties for extended terms which will mean  greater cash flow stability and value creation. We are pleased that by dealing  with Deutsche Post pro-actively, we have retained them as a tenant in  approximately three times more space than they retained in 2012."  As part of the overall deal, the REIT has also agreed to provide Deutsche Post  with an annual rent reduction of €1.7 million per year, effective as of July  1, 2014. Based on recent inflation rates in Germany, we anticipate that prior  to July 1, 2014 this reduction in annual rent will be substantially offset by  CPI rent adjustments provided in the terms of the Deutsche Post leases. In  addition, the REIT will make a one-time payment to Deutsche Post of €1.45  million to be used to improve the buildings and the tenant's space.  The following table is a summary of the foregoing:  Deutsche Post 2014 Termination                           GLA % of  Rights                                              (in sq. ft.) total  Total subject to 2014 termination       rights                                             1,924,306  100%                                                                        Deutsche Post 5-year lease              extension                               619,381                     Deutsche Post waiver of 2014            144,951 termination rights                                                                                                      764,332   40%                                                                     Space terminated in June                                           2013                                                             Redevelopment under                                                negotiation                         203,250                  Dispositions under                                                 negotiation                          39,022                  Completed leases                     18,986                                                                         261,258   14%  Space subject to active lease           negotiations                                         258,163   13%  Space addressed or in                                          67% progress                                           1,283,753  Space left to redevelop, re-lease       or dispose                                           640,553   33%    "The REIT's team in Germany has developed a focused, asset-by-asset strategy  which, together with today's agreement with Deutsche Post, and ten months in  advance of the effective termination, already addresses over two-thirds of the  GLA that was subject to the 2014 terminations. I have full confidence in our  German team, who will continue to look for and execute on opportunities to  maximize value within our Deutsche Post portfolio." said Jane Gavan, CEO.  Dundee International REIT is an unincorporated, open-ended real estate  investment trust that provides investors with the opportunity to invest in  commercial real estate exclusively outside of Canada. Dundee International  REIT's portfolio currently consists of approximately 15.4 million square feet  of gross leasable area of office, industrial and mixed use properties across  Germany. For more information, please visit www.dundeeinternational.com.  This press release contains forward-looking information within the meaning of  applicable securities legislation. This information can be identified by the  use of words such as "may", "will", "would", "expect", "anticipate", "believe"  or "continue" or the negative thereof or similar variations. The actual  results and performance could differ materially from those expressed or  implied by such information. Forward-looking information is based on a number  of assumptions and is subject to a number of risks and uncertainties, many of  which are beyond Dundee International REIT's control that could cause actual  results to differ materially from those that are disclosed in or implied by  such forward-looking information. These risks and uncertainties include, but  are not limited to, global and local economic and business conditions; the  financial condition of tenants; our ability to refinance maturing debt;  leasing risks, including those associated with the ability to lease vacant  space; and interest and currency rate functions. Forward-looking information  is also based on certain assumptions, including that the Canadian and German  economies remain stable, interest rates remain stable, conditions within the  real estate market remain consistent and competition for acquisitions remains  consistent with the current climate. All forward-looking information in this  press release speaks as of the date of this press release. Dundee  International REIT does not undertake to update any such forward-looking  information whether as a result of new information, future events or  otherwise. Additional information about these assumptions and risks and  uncertainties is contained in Dundee International REIT's filings with  securities regulators, including its latest annual information form and MD&A.  These filings are also available at Dundee International REIT's website at  www.dundeeinternational.com.        SOURCE  Dundee International REIT  please contact:  P. Jane Gavan President and Chief Executive Officer (416) 365-6572  jgavan@dundeeinternational.com  Rene D. Gulliver Chief Financial Officer (416) 365-5447  rgulliver@dundeeinternational.com  To view this news release in HTML formatting, please use the following URL:  http://www.newswire.ca/en/releases/archive/September2013/03/c9655.html  CO: Dundee International REIT ST: Ontario NI: REL  
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