RioCan Real Estate Investment Trust
TSX : REI.UN

RioCan Real Estate Investment Trust

June 23, 2017 09:06 ET

RioCan REIT Expects Minimal Impact from Sears Store Closures

TORONTO, ONTARIO--(Marketwired - June 23, 2017) - In connection with the announcement on June 22, 2017 that Sears Canada Inc. ("Sears") has filed for protection under the Companies' Creditors Arrangement Act, RioCan Real Estate Investment Trust ("RioCan") (TSX:REI.UN) hereto provides a summary of the affected locations.

"The announcement by Sears is a much different situation for RioCan than when Target announced their filing in 2015. Our exposure to Sears is far lower, and we have been preparing for just this situation at many of these locations for some time now," said Edward Sonshine Chief Executive Officer of RioCan. "We would expect that there will be minimal disruption or financial impact as we work through the seven locations that have been announced to be closed. In all but one case, these are smaller retail stores that will not require redevelopment as was the case with Target."

Out of the 9 locations that RioCan has exposure to, 7 RioCan locations were included in Sears announcement to close 59 stores. These 7 stores represent $4.7 million of annualized rental revenue or 0.4% of RioCan's total annualized rental revenue with an average base rent per square foot of $9.33 as of March 31, 2017.

In total, the 9 Sears locations represent $6.3 million of annualized gross rent or 0.6% of RioCan's total annualized rental revenue with an average base rent per square foot of $8.84 as of March 31, 2017. In certain cases, such as Timmins the store closing had been announced prior, and the Trust has been preparing for the closure. The majority of RioCan's exposure to Sears is through their Sears Home banner, with an average store size of 40 to 45 thousand square feet, which does not present the same challenges to backfill as a full department store.

Announced closings:

Location City, Province Banner Square Feet at 100% Square Feet
(RioCan's interest)
Remaining Lease Term (years)
Brentwood Village* Calgary, Alberta Sears Home 46,043 46,043 2.7
Kennedy Commons Toronto, Ontario Sears Home 43,130 21,565 1.4
RioCan Centre Kingston Kingston, Ontario Sears Home 43,290 43,290 1.9
RioCan Centre Sudbury Sudbury, Ontario Sears Home 43,000 43,000 1.1
RioCan Centre Windsor Windsor, Ontario Sears Home 51,572 51,572 2.0
RioCan West Ridge Orillia, Ontario Sears Home 30,003 30,003 5.7
Timmins Square Timmins, Ontario Sears Outlet 109,450 32,835 0.1
Total 366,488 268,308

* While Sears has indicated that it is closing a Sears Home store in Calgary, Alberta it has not clearly expressed which store will close. Therefore, the above represents a worst-case scenario.

Remaining Sears Locations

Location City, Province Banner Square Feet at 100% Square Feet
(RioCan's interest)
Remaining Lease Term (years)
RioCan Oakville Place Oakville, Ontario Sears Department 104,165 52,083 3.8
RioCan Thickson Ridge Toronto, Ontario Sears Home 60,444 60,444 5.2
Total 164,609 112,527

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 this News Release related to the impact of Sears store closings on the Trust, together with 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 News Release are qualified by these cautionary statements.

Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan's current estimates and assumptions, which are subject to numerous risks and uncertainties, including those described under "Risks and Uncertainties" in RioCan's Management's Discussion and Analysis for the period ended March 31, 2017 ("MD&A") and the Trust's most recent Annual Report and Annual Information Form, which could cause actual events or results to differ materially from the forward-looking information contained in this News Release.

Management undertakes no obligation, except as required by applicable law, to publicly update or revise any forward- looking information, whether as a result of new information, future events or otherwise. Management undertakes no obligation, except as required by applicable law, to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

About RioCan

RioCan is Canada's largest real estate investment trust with a total enterprise value of approximately $14.6 billion as at March 31, 2017. RioCan owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 300 Canadian retail and mixed use properties, including 15 properties under development, containing an aggregate net leasable area of 46 million square feet. For the past 25 years, we have shaped the future, sensibly cultivated growth, and taken our stakeholders and partners wherever they needed to go. Currently, we have more than 6,200 tenants and 700 employees with a presence from coast to coast. We know that there is a home for every retailer. Whether we find it today or build it for tomorrow, we deliver real vision, solid ground. For more information, visit www.riocan.com.

Contact Information

  • RioCan Real Estate Investment Trust
    Qi Tang
    SVP and CFO
    (416) 866-3033
    www.riocan.com