RioCan Real Estate Investment Trust
TSX : REI.UN

RioCan Real Estate Investment Trust

January 22, 2007 09:10 ET

RioCan Real Estate Investment Trust Announces Firm Agreement to Acquire Yonge Eglinton Centre in Toronto

TORONTO, ONTARIO--(CCNMatthews - Jan. 22, 2007) -

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RioCan Real Estate Investment Trust ("RioCan") (TSX:REI.UN) today announced that it has entered into a firm agreement to acquire Yonge Eglinton Centre, in Toronto, Ontario, for an aggregate purchase price of $223 million.

Yonge Eglinton Centre is a leading 1,012,500 square foot mixed-use complex that is located at the northwest corner of Yonge Street and Eglinton Avenue, an important intersection and crossroad in midtown Toronto. The property is comprised of two office towers, four levels of retail and an underground parking structure. The office area comprises approximately 748,000 square feet. The retail area comprises approximately 264,500 square feet and features a number of national retailers including Dominion, Famous Players, Indigo Books, Toys "R" Us, LCBO, Pharma Plus and HMV. RioCan will manage both the retail and office components.

Surrounded by one of Toronto's most densely populated areas, Yonge Eglinton Centre is connected to Toronto's public transportation system (T.T.C.) at the Eglinton subway station. In excess of 67,900 commuters enter and exit the Eglinton subway station each day and over 75,000 vehicles travel through the intersection each day. This translates into a weekly total two-way pedestrian volume in excess of 415,800 people. Since the Government of Ontario has identified the Yonge Eglinton area as an "Urban Growth Centre" in their Growth Plan for the Greater Golden Horseshoe, additional residential developments are currently underway and will only intensify as the area's population grows, increasing the already strong demand for retail and office space in the area.

Edward Sonshine, Q.C., President and Chief Executive Officer of RioCan, said, "The acquisition of Yonge Eglinton Centre is a unique opportunity for RioCan. Located at one of Toronto's finest and prominent corners, we were able to acquire the property at an accretive initial yield and at a fraction of replacement cost. The property possesses tremendous immediate growth potential and RioCan is confident that it will add significant value and cash flow growth to this high caliber mixed-use centre."

The purchase price is intended to be satisfied by a cash payment of $146 million, the assumption of existing debt of $56 million and the balance by the issuance by a RioCan subsidiary limited partnership to the vendors of Class A limited partnership units (the "Class A LP Units"). The holders of Class A LP Units will be entitled to exchange, from time to time at no additional cost, Class A LP Units then held for freely-tradeable units of RioCan on a one-for-one basis. RioCan will also have the right to compel an exchange of all of the Class A LP Units then held by a holder into RioCan units in certain circumstances.

About RioCan

RioCan is Canada's largest real estate investment trust with a total market capitalization of approximately $7.8 billion. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 204 retail properties, including 8 under development, containing an aggregate of over 50.9 million square feet. For further information, please refer to RioCan's website at www.riocan.com.

Contact Information

  • RioCan Real Estate Investment Trust
    Edward Sonshine, Q.C.
    President & CEO
    (416) 866-3018
    Website: www.riocan.com