RioCan Real Estate Investment Trust
TSX : REI.UN

RioCan Real Estate Investment Trust

May 21, 2010 09:00 ET

RioCan Real Estate Investment Trust Announces Acquisition of Partner's Interests In Two Retail Properties In Canada

TORONTO, ONTARIO--(Marketwire - May 21, 2010) - RioCan Real Estate Investment Trust ("RioCan") (TSX:REI.UN) today announced that it has completed the acquisition of its partner's interests in two retail properties located in Ontario and New Brunswick. These two properties, will upon completion, comprise approximately 799,000 square feet (including shadow anchors), which includes 170,000 square feet of additional density, which will be built out as space is preleased. The total purchase price for the partnership interests in these properties was approximately $29.4 million, which brings RioCan's ownership interest to 100%. The weighted average cap rate ascribed for the income producing portion of these properties was approximately 7.25%.

Purchased Properties

Flamborough Walmart is a 272,000 square foot new format retail centre on a 29 acre site that has been developed as a joint venture with Trinity. RioCan has acquired Trinity's 50% interest in the property. The site is currently anchored by a newly opened 151,000 square foot Walmart on a ground lease and a 98,000 square foot Rona. The remaining tenants at the property include LCBO and Bank of Nova Scotia. An additional 54,000 square feet of retail space will be developed at the property as preleasing is completed.

Corbett Centre: This 26 acre site is currently being developed as a joint venture with Trinity into a 473,000 square feet new format retail centre (including shadow anchors), of which 358,000 square feet has been completed. RioCan has acquired Trinity's 37.5% interest in the property. The site is anchored by Home Depot which owns its own store and operates as part of the overall site. A Costco, which also owns its own store and operates as part of the overall site, will commence operations in early 2011. Other major tenants include Michaels, Winners, Dollarama and PetSmart. An additional 115,000 square feet of retail space will be developed at the property as preleasing is completed.

Pending Acquisitions in Canada

In addition to the properties mentioned above, RioCan currently has two properties located in the Greater Toronto Area and Montreal that are under conditional contract. They comprise approximately 194,000 square feet and are anchored or shadow anchored by a supermarket. The total purchase price is expected to be $34.3 million. RioCan anticipates that it will complete its due diligence during the next two to four weeks and will close on these acquisitions before the end of the third quarter. The acquisitions under consideration are in various stages of due diligence and while RioCan will aim to complete these transactions, no such assurance can be given.

About RioCan

RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $8.4 billion as at March 31, 2010. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 261 retail properties, including 12 under development, containing an aggregate of over 60 million square feet. RioCan owns an 80% interest in seven grocery anchored shopping centres and owns a 14% 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 www.riocan.com.

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 made in "Property Closings", "Properties Under Contract" and "Acquisition Pipeline", and other 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 March 31, 2010 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
    www.riocan.com