RioCan Real Estate Investment Trust

RioCan Real Estate Investment Trust

December 18, 2009 08:54 ET

RioCan Real Estate Investment Trust Announces Completion of Acquisition of Four Retail Properties in Canada

TORONTO, ONTARIO--(Marketwire - Dec. 18, 2009) - RioCan Real Estate Investment Trust (TSX:REI.UN) ("RioCan") today announced that it has completed the acquisition of four retail properties totaling approximately 1.2 million square feet, as previously announced on December 1, 2009. Three of the four properties are anchored by Walmart, which represents 54% of the occupied space by gross leasable area and generates 34% of the gross rental revenue. The remaining property will be anchored by Lowe's. The purchase price for the portfolio was approximately $280 million.

In connection with the purchase, RioCan acquired two of the properties on a joint venture basis. Grandview Corners in Surrey, BC was acquired with Canada Pension Plan Investment Board ("CPPIB") on a 50-50 basis. Edmonton West Retail Centre in Edmonton, AB was acquired with Sunlife, with RioCan owning a 40% interest. In both cases, RioCan will act as property and asset manager. As a result, RioCan's interest in the four properties is 728,653 square feet and its net purchase price is approximately $166 million, which was paid with cash from existing resources.

RioCan has received financing commitments related to its interests on three of the properties totaling approximately $98.9 million at an average interest rate expected to be approximately 5.0% for five-year terms. The financings are expected to close in January, 2010.

"These four properties represent an excellent addition to RioCan's portfolio in Western Canada and an opportunity to expand our important relationships with CPPIB and Sunlife," said Edward Sonshine, Q.C., President and CEO of RioCan. "The strong tenancies of Walmart and the low near term lease rollover in these properties will provide a good source of long term stable cash flows."

About RioCan

RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $7.8 billion as at September 30, 2009. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 249 retail properties, including 13 under development, containing an aggregate of over 59 million square feet. RioCan has also agreed to acquire an 80% interest in seven grocery anchored shopping centres in the United States and owns a 15% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centres and drug store-anchored convenience centres located predominantly in the Northeastern United States. For further information, please refer to RioCan's website at

Forward-Looking Information

This news release contains forward-looking statements within the meaning of applicable securities laws. These statements include, but are not limited to, statements concerning RioCan's objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "would", "expect", "intend", "estimate", "anticipate", "believe", "should", "plan", "continue", or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. All forward-looking statements in this Press Release are qualified by these cautionary statements.

These statements are not guarantees of future events or performance and, by their nature, are based on RioCan's estimates and assumptions, which are subject to risks and uncertainties, including those described under "Risks and Uncertainties" in its management discussion and analysis dated September 30, 2009 which could cause actual events or results to differ materially from the forward-looking statements contained in this News Release. Those risks and uncertainties include, but are not limited to, those related to: liquidity in the global marketplace associated with current economic conditions, tenant concentrations, occupancy levels, access to debt and equity capital, interest rates, joint ventures/partnerships, the relative illiquidity of real property, unexpected costs or liabilities related to acquisitions, construction, environmental matters, legal matters, reliance on key personnel, unitholder liability, income taxes, the conditions to the transactions not being satisfied resulting in the failure to complete some or all of the proposed transactions, real estate and capital market conditions. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include: a less robust retail environment than has been seen for the last several years; relatively stable interest costs; an increase in acquisition capitalization rates; a decrease in land costs for greenfield development; a continuing trend towards land use intensification in high growth markets; more limited but available access to equity and debt capital markets to fund, at acceptable costs, the future growth program and to enable the Trust to refinance debts as they mature and the availability of purchase opportunities for the joint venture. Although the forward-looking information contained in this Press Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements included in this Press Release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this Press Release.

Contact Information

  • RioCan Real Estate Investment Trust
    Rags Davloor
    Senior Vice President & CFO
    (416) 642-3554