RioCan Real Estate Investment Trust

RioCan Real Estate Investment Trust

December 06, 2010 12:23 ET

RioCan Real Estate Investment Trust Announces Completion of Restructuring to Qualify as a REIT Commencing January 1, 2011

TORONTO, ONTARIO--(Marketwire - Dec. 6, 2010) - RioCan Real Estate Investment Trust ("RioCan") (TSX:REI.UN) today announced that it has completed the necessary tax restructuring to qualify commencing for the 2011 taxation year as a REIT under the Canadian income tax legislation affecting the tax treatment of publicly traded investment trusts. A trust that qualifies as a REIT for a taxation year is exempt from taxation as a specified investment flow through trust (or "SIFT"). Accordingly, RioCan will continue to be able to flow income through to unitholders on a tax effective basis.

Generally, to qualify, RioCan's Canadian assets must be limited to income producing real property and substantially all of RioCan's Canadian source revenues must be derived from rental revenue, capital gains and fee income from properties in which RioCan has an interest. RioCan's assets and operating activities, including those in the United States, were largely unaffected by the restructuring. All non-compliant assets have either been disposed of or restructured. As a result of the completion of its restructuring, the non-cash future income tax liability of $144 million at September 30, 2010 that arose primarily as a result of the introduction of the SIFT Legislation in 2007 is expected to reverse in the fourth quarter of 2010 through the consolidated statement of earnings as a one-time non-cash future income tax recovery.
"Management has been focused to ensure that RioCan will meet the requirements to qualify as a REIT and RioCan has taken the necessary steps for that to be the case," said Edward Sonshine, Q.C. President and Chief Executive Officer of RioCan. "As a result, RioCan will continue to operate substantially as it has in the past, and will continue to provide our unitholders a steady source of tax effective distributions."

About RioCan

RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $10.0 billion as at September 30, 2010. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 289 retail properties, including 11 under development, containing an aggregate of over 66 million square feet. RioCan owns an 80% interest in 28 grocery anchored and new format retail centres in the United States through various joint venture arrangements. In addition, RioCan 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

Forward Looking Advisory

This news release contains forward-looking statements and information within the meaning of applicable securities legislation. These statements include statements relating to RioCan's qualification as a REIT commencing for the 2011 taxation year. Although RioCan believes that the anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements and information. Accordingly, the Trust cannot give any assurance that its expectations will in fact occur and cautions that actual results may differ materially from those in the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "to", "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 news 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 the Trust's MD&A filed in respect of the period ended September 30, 2010 complemented by those contained in RioCan's current Annual Information Form dated March 21, 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, and income taxes including changes to and the complexity of applicable tax laws. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include the ability to monitor continued qualification as a REIT throughout the taxation year and that the tax laws do not change in a manner that would adversely affect RioCan's qualification as a REIT. Although the forward-looking information contained in this news 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 news 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 news release.

Contact Information

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