Riocan Real Estate Investment Trust Completes Previously Announced Acquisitions
TORONTO–(BUSINESS WIRE)–Jan. 23, 1997–RioCan Real Estate I(TSE REI.UN.) RioCan Real Estate Investment Trust (“RioCan”) today announced that it has completed the previously announced acquisition of a shopping centre portfolio from The Frum Development Group (the “Frum Group”).
RioCan has purchased a 50 percent interest in seven shopping centres and a 25 percent interest in two shopping centres from the Frum Group. Eight of the shopping centres are located in Ontario, and one is in New Brunswick. The total purchase price for RioCan’s interest in this portfolio was $45.2 million and will yield a return at inception in excess of 11 percent with excellent growth expected. The shopping centres count amongst its tenants some of Canada’s premier retailers including Loblaws, A&P, Zellers, Shoppers Drug Mart, KMart and Business Depot and aggregate approximately 1,155,000 square feet of leasable area.
RioCan will also have the option to purchase (and the Frum Group will have the option to require RioCan to purchase) the Frum Group’s remaining interests in the nine shopping centres at a price calculated by valuing the properties at ten times their net operating income during the calendar year preceding the future purchase, which is to take place any time after the fifth anniversary of the completion of this portfolio acquisition. This structure ensures that RioCan will be able to acquire the remaining interests in these properties at double digit returns.
RioCan has also completed the acquisition of a 50 percent interest in the Heart Lake Town Centre from Truscan Realty Limited for $10.75 million. As part of the Frum Group portfolio acquisition, a 25 percent interest in the Heart Lake Town Centre was acquired, taking RioCan’s total ownership interest in this 126,000 square foot unenclosed shopping centre to 75 percent. Tenants in this shopping centre include A&P, Shoppers Drug Mart, Biway and the Bank of Montreal.
RioCan currently owns and operates a portfolio of 54 commercial properties of which 44 are shopping centres, 6 are office and industrial income properties and 4 are joint venture properties under development, across Canada. The shopping centres contain an aggregate in excess of 3.6 million square feet of gross leasable area and the office and industrial properties contain an additional 650,000 square feet of gross leasable area. RioCan’s primary investment objective is the long-term maximization of cash flow and capital appreciation of its portfolio. It achieves this by pro-actively managing its existing properties, seeking accretive acquisition and expansion opportunities and undertaking development activities on a selective basis.
CONTACT: RioCan Real Estate Investment Trust
Edward Sonshine, Q.C., 416/ 866-3018
COPYRIGHT 1997 Business Wire
COPYRIGHT 2004 Gale Group