RioCan Real Estate Investment Trust

RioCan Real Estate Investment Trust

September 13, 2005 09:26 ET

RioCan Real Estate Investment Trust Announces $253 Million Of New Shopping Centre Developments With Trinity Development Group Inc.

TORONTO, ONTARIO--(CCNMatthews - Sept. 13, 2005) - RioCan Real Estate Investment Trust ("RioCan") (TSX:REI.UN) and its joint venture partner, Trinity Development Group Inc. ("Trinity"), today announced the components of their development that have commenced or will be started in the near future. Five shopping centre sites will be developed into approximately 2.1 million square feet of retail space (including retailer-owned anchors totalling 807,000 square feet) at an estimated total cost of $253 million. The five developments, four in Ontario and one in Alberta, are as follows:

The largest development, RioCan Beacon Hill, located at Sarcee and Stoney Trail Extension in northwest Calgary, Alberta will be developed into approximately 790,000 square feet of new format retail and will be constructed in two phases. Phase one, which will consist of 441,000 square feet, is 100% sold or leased. The phase will be anchored by Costco and Home Depot (both tenant-owned), and will be tenanted by, amongst others, Winners, Linens N Things, Michaels, Golf Town, Petsmart, Royal Bank and TD Canada Trust. Construction of phase one has commenced and will be completed by the summer of 2006. Phase two will be anchored by Canadian Tire and tenanted by, amongst others, Staples/Business Depot and Mark's Work Wearhouse. Phase two construction will commence sometime in 2006 and will be completed sometime in 2007.

Also currently under construction at Innes Road and Lanthier Drive in Ottawa, Ontario, is about 346,000 square feet of new format retail anchored by a retailer-owned Loblaws (150,000 square feet). This 90% pre-leased centre will be tenanted by some of Canada's leading retailers including Winners, Linens N Things, LCBO, Michaels, Montana's Cookhouse and Swiss Chalet. Construction is expected to be completed by the summer of 2006.

Site work has commenced on another development at the southeast corner of Highways 5 and 6 in Hamilton, Ontario. Upon completion, this unenclosed shopping centre will comprise approximately 260,000 square feet and will be anchored by Loblaws (112,000 square feet, tenant-owned) and Rona, along with 35,000-40,000 square feet of retail space. Rona is expected to be completed by the end of 2006 and construction of the remaining buildings is expected to be completed by the spring of 2007.

Another site at the southwest corner of Main and Thompson in Milton, Ontario will be developed into an unenclosed shopping centre of about 246,000 square feet. The 85% pre-leased centre will be anchored by tenant-owned Loblaws (150,000 square feet) and will include other national tenants such as LCBO, Blockbuster, Bulk Barn, Wendy's and TD Canada Trust. Closing of the purchase contract and commencement of construction will take place in spring 2006, and will be completed later that year.

Over 80% pre-leased, a site at the northeast corner of Highway 404 and Elgin Mills in Richmond Hill, Ontario will be developed into a 495,000 square foot new format retail centre. This centre will be anchored by a retailer-owned Home Depot (145,000) and will be tenanted by, amongst others, Winners, HomeSense, Linens N Things, Staples/Business Depot and Michaels. Closing on the site is expected to take place by the end of this year. Construction is expected to begin in 2006 and to be completed by the spring of 2007.

RioCan will be providing all management and leasing services for these shopping centres upon completion of construction and expects these developments in the aggregate to return approximately 9.8%, unlevered.

Edward Sonshine, Q.C., President and CEO of RioCan, said, "The joint venture relationship with Trinity has been in effect for almost 10 years and has resulted in some of RioCan's best performing properties, including RioCan Signal Hill Centre in Calgary, Alberta and RioCan Colossus Centre in Vaughan, Ontario. These new developments are representative of the type of product that has been and hopefully will continue to be created by the joint venture. The return on total investment that is achieved far exceeds that which could be earned through a purchase, if such quality properties were even available."

About RioCan

RioCan's purpose is to deliver to its unitholders stable and reliable cash distributions, which continuously increase over time. RioCan is Canada's largest real estate investment trust with total assets of approximately $4.2 billion. It has ownership interests in a portfolio of 198 retail properties, including eight under development, across Canada containing an aggregate of 46.5 million square feet, including partners' and shadow anchors' interests.

Contact Information