RioCan Real Estate Investment Trust

RioCan Real Estate Investment Trust

April 15, 2013 16:50 ET

RioCan Real Estate Investment Trust Provides an Update on Disposition Pipeline

TORONTO, ONTARIO--(Marketwired - April 15, 2013) - RioCan Real Estate Investment Trust ("RioCan") (TSX:REI.UN) today is pleased to provide an update on the status of RioCan's disposition pipeline. RioCan has completed the sale of one retail property in Windsor, Ontario and currently has four properties in Ontario, Quebec and New Brunswick that are under contract where conditions have been waived. RioCan has a further five properties that are currently under various stages of negotiations to sell.

RioCan has four properties where purchase and sale agreements have been signed and conditions have been waived with two purchasers. The aggregate gross sale price for these four properties is approximately $363.8 million at a weighted average capitalization rate of approximately 5.9%. In connection with the sales, the purchasers (separately) will assume the in place mortgage financing of approximately $66.9 million in aggregate that carry a weighted average interest rate of 5.4%.

In March 2013, RioCan completed the sale of St. Clair Beach Shopping Centre, in Windsor, Ontario at a sale price of $10.5 million which equates to a capitalization rate of 7.8%.

"These dispositions are an excellent opportunity for RioCan to realize the value in these properties and redeploy the capital into RioCan's growing enclosed mall and urban portfolio," said Edward Sonshine, CEO of RioCan. "This disposition allows RioCan to recycle the capital into our recent acquisitions without the need to raise additional capital, which we believe will provide stronger long term returns to our unitholders."

The properties sold or under firm contract are:

Property Name Location NLA Purchase Price
(in $millions)
Properties Sold
St. Clair Beach Shopping Centre Windsor, ON 76,001 $10.5
Properties Under Firm Contract
RioCan Ste. Foy Quebec City, QC 525,787
Mega Centre Lebourgneuf Quebec City, QC 456,761
Wheeler Park Moncton, NB 271,973
Subtotal $301.0
RioCan Thunder Bay Thunder Bay, ON 334,430 $62.8
Total Sold and Under Firm Contract 1,666,315 $374.3

The aggregate IFRS value for these five assets as at December 31, 2012 was $364.9 million.

RioCan also has five properties located in Ontario and Quebec that are in various stages of negotiations that, if completed, represent additional asset sales of approximately $44.4 million in total. RioCan is under no obligation to proceed with such proposed dispositions which, if completed, will be done to facilitate its objective of paring its portfolio and focusing on major markets.

About RioCan

RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $14.3 billion as at December 31, 2012. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 346 retail properties containing more than 82 million square feet, including 52 grocery anchored and new format retail centres containing 13.6 million square feet in the United States through various joint venture arrangements as at December 31, 2012. RioCan's portfolio also includes 11 properties under development in Canada. For further information, please refer to RioCan's website at

Forward-Looking Advisory

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, intention to complete the disposition of certain assets, as well as 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 "objective", "may", "will", "expect", "intend", "should", "continue", or similar expressions suggesting future outcomes or events.

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 forward-looking statements are not guarantees of future events or performance and, by their nature, are based on RioCan's current estimates and assumptions, which are subject to risks and uncertainties, including those described under "Risks and Uncertainties" in RioCan's Management's Discussion and Analysis for the years ended December 31, 2012 and 2011, 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 investment in the United States of America ("US"), US currency and RioCan's qualification as a real estate investment trust for tax purposes. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a more robust retail environment compared to recent years; relatively stable interest costs; a continuing trend toward land use intensification in high growth markets; access to equity and debt capital markets to fund, at acceptable costs, the future growth program to enable the Trust to refinance debts as they mature; the availability of purchase opportunities for growth in Canada and the US; and the impact of accounting principles to be adopted by the Trust effective January 1, 2011 under International Financial Reporting Standards ("IFRS") which includes application to the Trust's 2011 comparative financial results. 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.

The Income Tax Act (Canada) (the "Act") contains provisions which potentially impose tax on publicly traded trusts (the "SIFT Provisions"). However, the SIFT Provisions do not impose tax on a publicly traded trust which qualifies as a REIT. RioCan currently qualifies as a REIT and intends to continue to qualify for future years. Should this not occur, certain statements contained in this News Release may need to be modified.

Except as required by applicable law, RioCan under takes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Contact Information

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