RioCan Real Estate Investment Trust Acquires Its Partner's Interest
in Three Development Projects to Expand Its Development Portfolio
TORONTO, ONTARIO--(Marketwired - Mar 31, 2014) - RioCan Real
Estate Investment Trust ("RioCan") (TSX:REI.UN) today is pleased to
announce that it has acquired its partner's, Trinity Developments
Limited ("Trinity"), interest in three development assets. RioCan
acquired Trinity's interest in East Hills and McCall Landing, both
in Calgary, Alberta as well as The Stockyards located in Toronto,
Ontario. As part of the acquisition, RioCan will assume the role of
development manager and will assume leasing responsibilities for
these projects. Additionally, RioCan acquired Trinity's interest in
Whiteshield Plaza a 156,000 square foot grocery anchored centre in
Toronto, Ontario. The total consideration for Trinity's interest in
the three development properties was $105 million and the purchase
price of their interest in Whiteshield Plaza was $11 million.
"Trinity has been an influential partner and major contributor
in the growth of RioCan over the past twenty years, and we look
forward to continuing to work with John Ruddy and his team on many
future development projects. By assuming the role of development
manager for these projects, we can further leverage our in house
development expertise and generate greater returns for the Trust
and its partners," said Edward Sonshine, Chief Executive Officer of
RioCan. "The staggered nature of these developments is attractive.
The Stockyards is nearing completion and the income from this
property is beginning to come on stream, as Canada's first purpose
built Target store opened this month. The first phase of East Hills
is expected to become income producing with the opening of Walmart
in the second quarter of 2014. The third development site, McCall
Landing, will provide longer term returns to our unitholders."
RioCan acquired Trinity's 10% interest in East Hills, 25%
interest in McCall Landing and 25% interest in The Stockyards for
an aggregate consideration of $105 million. RioCan assumed
Trinity's share of the in place third party financing of $24
million outstanding on The Stockyards. East Hills and McCall
Landing were acquired free and clear of financing. The cash
received by Trinity was applied to repay the outstanding mezzanine
financing on the projects in full.
RioCan has received approval from the remaining partners
involved in these development projects to assume the role as
development manager, and RioCan's development team will oversee the
completion of these properties. RioCan will also assume
responsibility for all leasing activities with respect to the
properties. Upon completion, RioCan will provide asset and property
management functions on behalf of its partners as previously agreed
upon.
The acquisition of an additional interest in these development
projects will further increase RioCan's portfolio concentration in
Canada's six major markets, a long stated objective of the Trust.
In the case of The Stockyards, RioCan has acquired an increased
interest in a dynamic, urban, Target anchored shopping centre in a
densely populated and established community in Toronto.
The development projects acquired are:
The Stockyards
Toronto, Ontario
The Stockyards development benefits from a well-established
urban node at the intersection of St. Clair Avenue and Weston Road.
The 19 acre site features approximately 551,000 square feet of
space anchored by a 149,000 square foot Target. The project concept
features a unique, urban, two-storey retail prototype and is the
first purpose built Target store in Canada. In addition, Marshalls,
HomeSense, Michaels, Old Navy, Sport Chek and PetSmart will operate
at the site. A 50% interest in this property was sold to CPPIB in
June 2008. As a result of the transaction the remaining 50% is
owned by RioCan. Target is now open and the majority of the
remainder of the tenants at the site will open by mid-2014.
East Hills
Calgary, Alberta
This 145 acre site is currently being developed into a 1.1
million square foot regional new format retail centre. The East
Hills development is planned in three phases. Phases I and III
comprise approximately 111 acres. Phases I, II and III will
ultimately form an integrated site. The site will be anchored by a
134,000 square foot Walmart that is scheduled to open in the second
quarter of 2014. The site is now co-owned by RioCan (40%), CPPIB
(37.5%), Lansdowne (12.5%), and Tristar (10.0%).
McCall Landing
Calgary, Alberta
McCall Landing, located at 36th Street NE and Country Hills
Boulevard NE in Calgary, is a 109-acre development that will
consist predominately of new format retail. Upon completion, the
development is expected to feature approximately 862,000 square
feet of retail space. A 50% interest in this property was sold to
the CPPIB in June 2008, with the remaining 50% owned by RioCan.
RioCan also completed the acquisition of the remaining 40%
interest in Whiteshield Plaza, bringing RioCan's interest in the
property to 100%. Whiteshield Plaza is a 156,000 square foot
grocery anchored shopping centre located in Toronto, Ontario. The
additional 40% interest was acquired at a purchase price of $11
million, representing a capitalization rate of 5.5%. In connection
with the acquisition, RioCan assumed outstanding mortgage financing
of $8 million, bearing interest at Banker's Acceptance plus 1.85%,
maturing in September 2015.
About RioCan
RioCan is Canada's largest real estate investment trust with a
total capitalization of approximately $13.8 billion as at December
31, 2013. It owns and manages Canada's largest portfolio of
shopping centres with ownership interests in a portfolio of 340
retail properties containing approximately 82 million square feet,
including 47 grocery anchored and new format retail centres
containing 13 million square feet in the United States as at
December 31, 2013. RioCan's portfolio also includes 16 properties
under development in Canada. For further information, please refer
to RioCan's website at www.riocan.com.
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 made in this News Release
concerning RioCan's, intention to complete the development 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.
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 year ended December 31, 2013 and in RioCan's annual information
form dated March 28, 2013, 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 and
general market conditions, tenant concentrations, occupancy levels
and defaults, 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, United States of
America ("US") investment and currency risk, 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 stable retail
environment; relatively low and 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. 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) 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 real estate investment
trust ("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.
RioCan Real Estate Investment TrustRags DavloorExecutive Vice
President & CFO(416) 642-3554www.riocan.com
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