RioCan Real Estate Investment Trust

Last updated
RioCan Real Estate Investment Trust
Company typePublic
TSX:  REI.UN
S&P/TSX Composite Component
IndustryREIT - Retail
Headquarters
Toronto, Ontario
,
Canada
Number of locations
289
Area served
Canada
Key people
Edward Sonshine, CEO and founder
Number of employees
669 (2016) [1]
Website www.riocan.com
RioCan Yonge Eglinton Centre in Toronto during November 2010. RioCanYongeEglintonCentre.JPG
RioCan Yonge Eglinton Centre in Toronto during November 2010.
RioCan Elgin Mills Crossing in October 2020 RioCanElginMillsCrossing-DLighting.jpg
RioCan Elgin Mills Crossing in October 2020

RioCan Real Estate Investment Trust is the second-largest real estate investment trust (REIT) in Canada. [2] As of 2024, it has an enterprise value of approximately $14.3 billion and owns 188 properties with a net leasable area of 33 million square feet. [3] The company properties are located across Canada. The current[ when? ] chief executive officer is Jonathan Gitlin.

Contents

History

Early history

RioCan was founded in 1993, by its former CEO Edward Sonshine, as Counsel REIT. [4] It was one of the first real estate investment trusts in Canada. [4] The company held an IPO on the Toronto Stock Exchange in 1994. [5] In 1995, it re-structured to internalize its asset management responsibilities, in return for a $5 million payment. [4] [6] As part of the re-structuring, the company was renamed RioCan REIT, a short form for "Retail Industrial Office Canadian". [4]

RioCan achieved significant growth in its early history, with an annualized 16% return from its IPO to 2013. [4] This growth was achieved in part through acquisitions. In 1995, it acquired five shopping centres in Ottawa from Ivanhoe Inc. for $42.5 million, almost doubling the size of the company (at the time, it had 29 properties). [7] In 1998, it acquired nine shopping centres from Burnac Inc, its largest acquisition up to that time. [5] Also in 1998, the company launched an ultimately successful hostile takeover bid for Realfund REIT. The new company had a market value of more than $1 billion, and was Canada's largest REIT. [4]

US expansion

In 2006, RioCan announced a planned expansion into the United States, through a $1 billion joint-venture with Ramco-Gershenson Properties Trust. [8] However, this deal fell apart before closing. [9] In 2010, the firm launched a successful expansion into the United States, taking advantage of low real estate prices there. [9] By 2012, 15% of RioCan's revenue was from the United States, and it planned to expand the percentage to 20%. [10] In December 2015, RioCan sold its U.S. portfolio to Blackstone Real Estate Partners VIII, for C$2.7 billion. [9] The deal was triggered by the low value of the Canadian dollar. RioCan used some of the proceeds of the deal to fund its previously announced buyout of Kimco Realty's joint venture stake for $715 million. [11]

Recent History

In 2011, RioCan announced a $1 billion joint venture with Tanger Factory Outlet Centers to develop 10-15 centres in Canada. [12] RioCan was significantly affected by the sale of Zellers to Target, and the resulting closure of Zellers stores in Canada, [13] as well as the closure of Target Canada. Target eventually paid RioCan $132 million to get out of its leases. [14]

Change of strategy

Starting around 2015, RioCan entered the residential real estate market, due to the threat from e-commerce to traditional retail. The company plans to re-develop many of its malls with high-rise apartments, including Westgate Mall in Ottawa. [15] By March 2018, when the company announced the RioCan Living Brand, it had 2,800 units planned in eight of its shopping centres. [16]

In October 2017, the firm announced it would sell about $2 billion worth of properties by 2019. The sales would mainly be in smaller urban centres; the company plans to focus on the six largest Canadian cities of Toronto, Montreal, Ottawa, Calgary, Edmonton, and Vancouver. [17] At the time of the announcement, RioCan had 299 properties, and it plans to sell about 100. [17] RioCan's six largest markets already accounted for 75% of revenue, and it plans to increase that percentage to 90%. [18] [2]

Properties

RioCan invests primarily in supermarket and junior department store-anchored, neighbourhood, convenience-oriented shopping centres. It owns both enclosed malls and power centres, in a large range of sizes RioCan tries to ensure that no one tenant makes up more than 10% of its rental revenue, in contrast to some other retail REITS (such as Choice Properties REIT) whose revenues are dominated by a single tenant. [19] As of 2017, its largest tenant was Loblaw, with about 5% of rental revenue. [20] As of 2017, 66% of revenue was from Ontario, 15% was from Alberta, 9% was from Quebec, 8% was from British Columbia, and the rest was from the rest of Canada. [20]

Properties owned by RioCan include Lawrence Allen Centre in Toronto, Chapman Mills Marketplace in Ottawa, RioCan Centre Kingston in Kingston, and Burlington Centre in Burlington.

Related Research Articles

A real estate investment trust is a company that owns, and in most cases operates, income-producing real estate. REITs own many types of commercial real estate, including office and apartment buildings, warehouses, hospitals, shopping centers, hotels and commercial forests. Some REITs engage in financing real estate.

<span class="mw-page-title-main">Link REIT</span> Hong Kong real estate investment trust

Link Real Estate Investment Trust, previously known as The Link Real Estate Investment Trust, is a wholly-owned private real estate investment trust managed by Link Asset Management Limited. It is the first real estate investment trust in Hong Kong and the largest in Asia by market capitalisation.

<span class="mw-page-title-main">Galeries d'Anjou</span> Shopping mall in Montreal, Quebec

Galeries d'Anjou is a shopping mall located in the borough of Anjou in Montreal, Quebec, Canada. Major tenants include Hudson's Bay, Simons, The Brick, Winners, Sports Experts/Atmosphere and Aubainerie. In addition to the main indoor shopping centre, Galeries d'Anjou has several stores around its parking lot including Best Buy and Rona l'Entrepôt.

<span class="mw-page-title-main">Centre Laval</span> Shopping mall

Centre Laval is a shopping mall located in the Chomedey district of Laval, Quebec, Canada, at the corner of Saint-Martin West and Le Corbusier boulevard. It is a 10-minute walk from the Montmorency metro station in nearby Laval-des-Rapides. Centre Laval is paired with Quartier Laval, a power centre across the street owned by the same company, with which it makes a shopping complex called DUO.

<span class="mw-page-title-main">CBL Properties</span> U.S. real estate investment trust that invests in shopping centers

CBL Properties is an American real estate investment trust that invests in shopping centers and owns shopping malls, primarily in the Southeastern and Midwestern United States. The company is organized in Delaware with its headquarters in Chattanooga, Tennessee. The company's largest tenants are L Brands, Signet Jewelers, and Foot Locker.

<span class="mw-page-title-main">St. Laurent Centre</span> Shopping mall

St. Laurent Centre is a shopping mall located in Ottawa, Ontario, Canada. It is owned and operated by Morguard REIT. The shopping mall is located just north of Highway 417 at the corner of St. Laurent Boulevard and Coventry Road.

<span class="mw-page-title-main">Burlington Centre</span> Shopping mall

Burlington Centre is a 721,000 square feet (67,000 m2) shopping mall located in Burlington, Ontario, Canada. It is one of the two enclosed malls in Burlington, Ontario, the other being the Mapleview Centre. The stores at Burlington Centre include Hudson's Bay, Homesense, Old Navy and Winners. It has two floors, the upper floor covers the wing leading to the food court, the floor above the food court area, and the second floor of Hudson's Bay. The Hudson's Bay store gained national media attention in 2021 for its Zellers pop-up shop.

<span class="mw-page-title-main">Tanger Inc.</span> American real estate investment trust

Tanger Inc. is a real estate investment trust headquartered in Greensboro, North Carolina, that invests in shopping centers containing upscale outlet stores in the United States and Canada.

<span class="mw-page-title-main">Lawrence Allen Centre</span> Shopping mall in Toronto

The Lawrence Allen Centre, formerly Lawrence Square Shopping Centre, is a shopping centre located in Toronto, Ontario, Canada. Owned by RioCan, it is one of the city's twenty largest malls. It is located on Lawrence Avenue West, west of Allen Road, in the neighbourhood of Lawrence Heights, the district of North York. It is accessible from the Toronto Transit Commission's Lawrence West station, as well as via various bus routes. It is a terminating vista of Marlee Avenue. North of Lawrence Allen Centre is the Yorkdale Shopping Centre.

Crombie REIT is a Canadian unincorporated open ended publicly traded real estate investment trust which trades on the Toronto Stock Exchange and has an estimated market capitalization of $1.6 billion. The company is based in New Glasgow, Nova Scotia.

<span class="mw-page-title-main">CapitaLand</span> Singaporean real estate organisation

CapitaLand is a real estate investment and management firm headquartered in Singapore.

<span class="mw-page-title-main">Herongate Square</span> Shopping mall in Ontario, Canada

The Herongate Square is an unenclosed shopping centre in the Heron Gate neighbourhood of Ottawa, Ontario, Canada, at the intersection of Walkley Road and Heron Road. Prior to redevelopment in the mid-2010s, it was the site of the Herongate Mall, a medium-sized mall launched in 1981. It is currently owned by Trinity Financial.

<span class="mw-page-title-main">Starlight Investments</span>

Starlight Investments is a privately-held Canadian real estate investment and asset management company based in Toronto, Ontario. As of 2021, Starlight owns 70,000 multi-family units, 8 million square feet of commercial space, and over 600 properties across Canada.

<span class="mw-page-title-main">First Capital REIT</span>

First Capital REIT is a Canadian public real estate company, specializing in retail real estate, and based in Toronto, Ontario. It is one of the largest retail landlords in Canada.

Morguard Corporation is a Canadian real estate company, based in Mississauga, Ontario. It owns retail, residential, office, industrial, and hotel properties, as well as managing real estate and financial investments for institutional investors. As of October 2017, it owned $9.4 billion in real estate, and managed an additional $12.6 billion.

SmartCentres Real Estate Investment Trust is a Canadian real estate investment trust, based in Vaughan, Ontario. It specializes in retail real estate, especially power centres. Almost all of its malls have Walmart as a tenant; SmartCentre's logo features a family of penguins with shopping bags.

Timbercreek Asset Management is a Canadian real estate company based in Toronto, Ontario. It has $7.5 billion in assets under management, through a number of affiliates, including one listed on the Toronto Stock Exchange. As of August 2016, it owned 200 multi-residential properties worth $3.5 billion, making it the fifth-largest landlord in Canada.

Choice Properties Real Estate Investment Trust is a Canadian unincorporated, open-ended real estate investment trust (REIT) based in Toronto, Ontario. It is the largest real estate investment trust in Canada, with an enterprise value of $16 billion. It mainly owns Canadian retail properties anchored by its major tenant and majority unit holder, Loblaw Companies, Canada's largest food retailer, which is controlled by the Weston family. It is listed on the Toronto Stock Exchange.

<span class="mw-page-title-main">H&R REIT</span>

H&R Real Estate Investment Trust is a Canadian open-ended real estate investment trust, specializing in commercial real estate, and based in Toronto, Ontario. It is the third largest REIT in Canada by market capitalization. H&R's portfolio includes 40 office properties, 161 retail properties, and 105 industrial properties and 11 other properties, with a total value of $13 billion. It is listed on the Toronto Stock Exchange.

InterRent Real Estate Investment Trust is a Canadian real estate investment trust, specializing in residential real estate, and based in Ottawa, Ontario. As of April 2018, it owns 8,800 suites in Ontario and Quebec, worth $1.66 billion. It is listed on the Toronto Stock Exchange under the symbol IIP.UN.

References

  1. ↑ "RioCan 2016 Annual Report" (PDF). Archived from the original (PDF) on 2018-01-29. Retrieved 2018-01-28.
  2. 1 2 "Dethroned as Canada's biggest REIT, RioCan races to get smaller in shift from retail to apartments". Financial Post. 2018-02-26. Retrieved 2018-04-16.
  3. ↑ "RioCan Fourth Quarter 2023 Investor Presentation" (PDF). RioCan. 2024-02-13. Retrieved 2024-02-29.
  4. 1 2 3 4 5 6 "How Ed Sonshine turned RioCan REIT into one of Canada's biggest property owners". Financial Post. 2013-11-05. Retrieved 2018-04-16.
  5. 1 2 "RioCan History | A success Story in Real Estate Investment". RioCan REIT. Retrieved 2018-04-16.
  6. ↑ "COUNSEL REAL ESTATE INVESTMENT TRUST ANNOUNCES PROPOSED RESTRUCTURING. - Free Online Library". www.thefreelibrary.com. Retrieved 2018-04-16.
  7. ↑ "Riocan Reit completes acquisition of Ottawa Real Estate Portfolio. - Free Online Library". www.thefreelibrary.com. Retrieved 2018-04-16.
  8. ↑ "RioCan REIT expanding to U.S. in joint venture". The Globe and Mail. 2006-12-06. Retrieved 2018-04-16.
  9. 1 2 3 "RioCan Real Estate Investment Trust is selling 49 American shopping malls to Blackstone Group". Financial Post. 2015-12-18. Retrieved 2018-04-16.
  10. ↑ "RioCan REIT eyes U.S. expansion with opening of new regional office". Financial Post. 2012-11-06. Retrieved 2018-04-16.
  11. ↑ "RioCan to buy out partner Kimco and 22 properties | CBC News". CBC. Retrieved 2018-04-16.
  12. ↑ "RioCan, Tanger Factory Outlets spending $1B on Canadian outlet shopping centres". TheRecord.com. 2011-01-24. Retrieved 2018-04-16.
  13. ↑ "RioCan says earnings hurt by Zellers vacancies, but space will be filled". The Globe and Mail. 2013-07-31. Retrieved 2018-04-16.
  14. ↑ "Target reaches deal with landlord RioCan to get out of Canadian leases | CBC News". CBC. Retrieved 2018-04-16.
  15. ↑ "Reinventions on tap for Westgate, Elmvale Acres, Gloucester shopping centres | CBC News". CBC. Retrieved 2018-04-16.
  16. ↑ "RioCan makes move to convert malls into mixed-use communities | The Star". thestar.com. Retrieved 2018-04-16.
  17. 1 2 "RioCan to sell 100 properties in smaller centres by 2019 | CBC News". CBC. Retrieved 2018-04-16.
  18. ↑ "RioCan to sell $2B worth of properties in secondary markets across Canada | The Star". The Toronto Star. 2017-10-02. Retrieved 2018-04-16.
  19. ↑ "The rise of the one-tenant REIT". Financial Post. 2013-08-12. Retrieved 2018-04-16.
  20. 1 2 "RioCan 2017 Annual Report" (PDF).
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.