Welcome!

News Feed Item

RioCan Real Estate Investment Trust Announces Conditional Agreement to Acquire Two Regional Malls in the Greater Toronto Area

TORONTO, ONTARIO -- (Marketwire) -- 02/05/13 -- RioCan Real Estate Investment Trust ("RioCan") (TSX:REI.UN) is pleased to announce that it has entered into a conditional agreement with Primaris Retail REIT ("Primaris") to purchase a 50% interest in Burlington Mall in Burlington, Ontario and a 100% interest in Oakville Place in Oakville, Ontario. The purchase is conditional on the successful completion of the H&R REIT and KingSett Consortium acquisition of Primaris, which pursuant to its Board supported agreement was announced earlier today. RioCan will purchase the assets as part of the KingSett Capital led Consortium.

The aggregate gross purchase price for these two properties is approximately $362 million (at RioCan's interest). In connection with the purchase, RioCan will assume, at its interest, the in place first mortgage financing of approximately $165 million in aggregate. The purchase price will be reduced by a mark-to-market adjustment on closing in consideration of the debt's above market interest rate, which is currently estimated at approximately $8 million. RioCan will fund this acquisition through cash on hand and existing operating facilities.

These properties will add to RioCan's growing enclosed mall portfolio that includes such properties as Georgian Mall, RioCan Yonge Eglinton Centre, RioCan Sheppard Centre and Shoppers World Brampton, all located in the GTA and surrounding markets. The acquisition of Oakville Place and Burlington Mall will allow RioCan to gain a stronger foothold in the enclosed mall sector, specifically in the GTA, a segment otherwise difficult to enter. As well as strengthening RioCan's market leading retail platform, there are additional opportunities for organic growth within both shopping centres, which RioCan believes it can realize with its deep infrastructure and management strength. It is expected that the purchase will be completed in early April.

"This acquisition represents an excellent opportunity to acquire two prominent regional malls, in communities with excellent demographics, high barriers to entry, and great potential to create additional value for our unitholders. We look forward to working with KingSett, our partners, who have done an excellent job in bringing this transaction into reality," said Edward Sonshine, CEO of RioCan. "These two properties strengthen RioCan's portfolio of enclosed malls, and will reinforce our competitive position in the GTA, Canada's largest market. RioCan's expanding enclosed mall portfolio with its strong fashion component will further support RioCan's relationships with its growing North American tenant base. RioCan is uniquely positioned to offer our tenants the opportunity to locate within multiple locations and retail formats."

Oakville Place is located directly off of Queen Elizabeth Way ("QEW"), the major highway running through Ontario's "Golden Horseshoe", in Oakville, Ontario. Oakville is a fast growing community with a strong, diversified economic base, and possesses one of Canada's highest income demographics with an average household income statistic that is well above the national average. Oakville Place is a fashion focused, two level regional mall containing approximately 455,000 square feet of gross leasable area. The property was built in 1981 and has undergone significant renovations in 2004 and 2008. Oakville Place is 100% occupied and is anchored by The Bay and Sears. Other major retail tenants at Oakville Place include American Eagle, H&M, Jacob, Birks, Roots, Laura, Mexx and Shoppers Drug Mart. At September 30, 2012, the property's Commercial Retail Units ("CRU") generated average sales of approximately $493 per square foot. Approximately 94% of the gross rent is generated by national and regional tenants. RioCan will purchase a 100% interest in the property at a purchase price of $259 million. In connection with the purchase, RioCan will assume the in place first mortgage financing of $112 million which carries an interest rate of 4.7%, maturing in 2021.

Burlington Mall, located near the QEW at Guelph Line and Fairview Street, is a 782,000 square foot enclosed mall. The property will be owned on a 50/50 joint venture basis with the KingSett Canadian Real Estate Investment Fund. Burlington Mall was constructed in 1968 and has undergone significant renovations in 2001, 2004 and 2006. The property is 99% occupied and is anchored by Target (opening Spring 2013), Canadian Tire and Winners/HomeSense, and is shadow anchored by The Bay. Other major tenants include Dollarama, Old Navy, Shoppers Drug Mart and SportChek. At September 30, 2012, the property's CRU generated average sales of approximately $386 per square foot. Approximately 87% of the gross rent is generated by national and regional tenants. RioCan will provide asset and property management functions for the property. The purchase price for the property is $206 million at 100% ($103 million at RioCan's interest).In connection with the purchase, the parties will assume the in place first mortgage financing of $105 million ($52.5 million at RioCan's interest) which carries an interest rate of 3.8%, maturing in 2016.

This acquisition is in conjunction with, and subject to the successful completion of, the amended arrangement (the "Amended Arrangement") between H&R REIT and Primaris announced earlier today. Pursuant to the Amended Arrangement, KingSett Capital and certain other parties including RioCan have agreed to purchase certain properties from Primaris. The previously announced property acquisition agreements with KingSett Capital have been terminated and, as a result, the previously announced financing agreements with The Toronto-Dominion Bank for an aggregate amount of $635 million, which would have been used to finance said transaction have also been terminated.

About RioCan

RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $13.9 billion as at September 30, 2012. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 338 retail properties containing more than 80 million square feet, including 49 grocery anchored and new format retail centres containing 12.4 million square feet in the United States through various joint venture arrangements as at September 30, 2012. RioCan's portfolio also includes 10 properties under development in Canada. 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 this News Release, 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 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 latest financial statements and management's discussion and analysis for the three and nine months ending September 30, 2012, 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 adopted by the Trust effective January 1, 2011 under International Financial Reporting Standards ("IFRS") which includes application to the Trust's 2010 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 legislation affecting the tax treatment of publicly traded trusts (the "SIFT Legislation"). The SIFT Legislation will not impose tax on a trust which qualifies under such legislation as a real estate investment trust (the "REIT Exception"). RioCan currently qualifies for the REIT Exception 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.

Contacts:
RioCan Real Estate Investment Trust
Edward Sonshine O.Ont., Q.C.
Chief Executive Officer
(416) 866-3018
www.riocan.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
The next XaaS is CICDaaS. Why? Because CICD saves developers a huge amount of time. CD is an especially great option for projects that require multiple and frequent contributions to be integrated. But… securing CICD best practices is an emerging, essential, yet little understood practice for DevOps teams and their Cloud Service Providers. The only way to get CICD to work in a highly secure environment takes collaboration, patience and persistence. Building CICD in the cloud requires rigorous ar...
SYS-CON Events announced today that Daiya Industry will exhibit at the Japanese Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Ruby Development Inc. builds new services in short period of time and provides a continuous support of those services based on Ruby on Rails. For more information, please visit https://github.com/RubyDevInc.
When it comes to cloud computing, the ability to turn massive amounts of compute cores on and off on demand sounds attractive to IT staff, who need to manage peaks and valleys in user activity. With cloud bursting, the majority of the data can stay on premises while tapping into compute from public cloud providers, reducing risk and minimizing need to move large files. In his session at 18th Cloud Expo, Scott Jeschonek, Director of Product Management at Avere Systems, discussed the IT and busine...
As businesses evolve, they need technology that is simple to help them succeed today and flexible enough to help them build for tomorrow. Chrome is fit for the workplace of the future — providing a secure, consistent user experience across a range of devices that can be used anywhere. In her session at 21st Cloud Expo, Vidya Nagarajan, a Senior Product Manager at Google, will take a look at various options as to how ChromeOS can be leveraged to interact with people on the devices, and formats th...
First generation hyperconverged solutions have taken the data center by storm, rapidly proliferating in pockets everywhere to provide further consolidation of floor space and workloads. These first generation solutions are not without challenges, however. In his session at 21st Cloud Expo, Wes Talbert, a Principal Architect and results-driven enterprise sales leader at NetApp, will discuss how the HCI solution of tomorrow will integrate with the public cloud to deliver a quality hybrid cloud e...
SYS-CON Events announced today that Yuasa System will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Yuasa System is introducing a multi-purpose endurance testing system for flexible displays, OLED devices, flexible substrates, flat cables, and films in smartphones, wearables, automobiles, and healthcare.
Companies are harnessing data in ways we once associated with science fiction. Analysts have access to a plethora of visualization and reporting tools, but considering the vast amount of data businesses collect and limitations of CPUs, end users are forced to design their structures and systems with limitations. Until now. As the cloud toolkit to analyze data has evolved, GPUs have stepped in to massively parallel SQL, visualization and machine learning.
Is advanced scheduling in Kubernetes achievable? Yes, however, how do you properly accommodate every real-life scenario that a Kubernetes user might encounter? How do you leverage advanced scheduling techniques to shape and describe each scenario in easy-to-use rules and configurations? In his session at @DevOpsSummit at 21st Cloud Expo, Oleg Chunikhin, CTO at Kublr, will answer these questions and demonstrate techniques for implementing advanced scheduling. For example, using spot instances ...
The session is centered around the tracing of systems on cloud using technologies like ebpf. The goal is to talk about what this technology is all about and what purpose it serves. In his session at 21st Cloud Expo, Shashank Jain, Development Architect at SAP, will touch upon concepts of observability in the cloud and also some of the challenges we have. Generally most cloud-based monitoring tools capture details at a very granular level. To troubleshoot problems this might not be good enough.
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
SYS-CON Events announced today that Taica will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Taica manufacturers Alpha-GEL brand silicone components and materials, which maintain outstanding performance over a wide temperature range -40C to +200C. For more information, visit http://www.taica.co.jp/english/.
When it comes to cloud computing, the ability to turn massive amounts of compute cores on and off on demand sounds attractive to IT staff, who need to manage peaks and valleys in user activity. With cloud bursting, the majority of the data can stay on premises while tapping into compute from public cloud providers, reducing risk and minimizing need to move large files. In his session at 18th Cloud Expo, Scott Jeschonek, Director of Product Management at Avere Systems, discussed the IT and busine...
We all know that end users experience the Internet primarily with mobile devices. From an app development perspective, we know that successfully responding to the needs of mobile customers depends on rapid DevOps – failing fast, in short, until the right solution evolves in your customers' relationship to your business. Whether you’re decomposing an SOA monolith, or developing a new application cloud natively, it’s not a question of using microservices – not doing so will be a path to eventual b...
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities – ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups. As a result, many firms employ new business models that place enormous impor...
SYS-CON Events announced today that SourceForge has been named “Media Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. SourceForge is the largest, most trusted destination for Open Source Software development, collaboration, discovery and download on the web serving over 32 million viewers, 150 million downloads and over 460,000 active development projects each and every month.