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
Enterprises have forever faced challenges surrounding the sharing of their intellectual property. Emerging cloud adoption has made it more compelling for enterprises to digitize their content, making them available over a wide variety of devices across the Internet. In his session at 19th Cloud Expo, Santosh Ahuja, Director of Architecture at Impiger Technologies, will introduce various mechanisms provided by cloud service providers today to manage and share digital content in a secure manner....
StarNet Communications Corp has announced the addition of three Secure Remote Desktop modules to its flagship X-Win32 PC X server. The new modules enable X-Win32 to safely tunnel the remote desktops from Linux and Unix servers to the user’s PC over encrypted SSH. Traditionally, users of PC X servers deploy the XDMCP protocol to display remote desktop environments such as the Gnome and KDE desktops on Linux servers and the CDE environment on Solaris Unix machines. XDMCP is used primarily on comp...
Fact: storage performance problems have only gotten more complicated, as applications not only have become largely virtualized, but also have moved to cloud-based infrastructures. Storage performance in virtualized environments isn’t just about IOPS anymore. Instead, you need to guarantee performance for individual VMs, helping applications maintain performance as the number of VMs continues to go up in real time. In his session at Cloud Expo, Dhiraj Sehgal, Product and Marketing at Tintri, wil...
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
SYS-CON Events announced today that Isomorphic Software will exhibit at DevOps Summit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Isomorphic Software provides the SmartClient HTML5/AJAX platform, the most advanced technology for building rich, cutting-edge enterprise web applications for desktop and mobile. SmartClient combines the productivity and performance of traditional desktop software with the simp...
With so much going on in this space you could be forgiven for thinking you were always working with yesterday’s technologies. So much change, so quickly. What do you do if you have to build a solution from the ground up that is expected to live in the field for at least 5-10 years? This is the challenge we faced when we looked to refresh our existing 10-year-old custom hardware stack to measure the fullness of trash cans and compactors.
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions wi...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.
Qosmos has announced new milestones in the detection of encrypted traffic and in protocol signature coverage. Qosmos latest software can accurately classify traffic encrypted with SSL/TLS (e.g., Google, Facebook, WhatsApp), P2P traffic (e.g., BitTorrent, MuTorrent, Vuze), and Skype, while preserving the privacy of communication content. These new classification techniques mean that traffic optimization, policy enforcement, and user experience are largely unaffected by encryption. In respect wit...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Smart Cities are here to stay, but for their promise to be delivered, the data they produce must not be put in new siloes. In his session at @ThingsExpo, Mathias Herberts, Co-founder and CTO of Cityzen Data, will deep dive into best practices that will ensure a successful smart city journey.