Granite REIT Climbs After Announcing Strategic Review

Granite Real Estate Investment Trust, the company renting industrial space to Magna International Inc., jumped after announcing it’s exploring a sale of some properties and other alternatives.

Advisers have been hired to help conduct a “comprehensive review of strategic alternatives available to best enhance the long term interests of Granite and all of its stakeholders,” the Toronto-based REIT said in a statement Friday.

The company’s shares rose 6.5 percent to C$42.68 at 10:56 a.m. in Toronto. They earlier rallied as much as 7.9 percent, the biggest intraday gain since Oct. 26, 2011.

The announcement prompted Canaccord Genuity Group Inc. to issue a note titled “Granite puts up the for sale sign.”

“We believe that more aggressive real estate investors could find creative ways to finance the acquisition of Granite,” Mark Rothschild, an analyst at Canaccord, said in the note. “There will be significant demand for its assets.”

Granite has about 30 million square feet (2.8 million square meters) in more than 100 rental properties such as warehouses and logistics facilities in Canada, the U.S. and Europe. Automotive-parts maker Magna is the main tenant in 77 percent of Granite’s space, according to a financial document on the REIT’s website.

Granite Chief Executive Officer Tom Heslip and Chief Financial Officer Michael Forsayeth didn’t respond to phone calls seeking comment on the strategic review.