RioCan Real Estate Investment Trust(RioCan) (TSX:REI.UN) announced that it has waived conditions pursuant to a purchase and sale agreement to its aquisition of the Sheppard Centre in north Toronto and partner KingSett from Standard Life Assurance Company of Canada for $218 million.
The partnership said Thursday the property, which features retail, office and residential units, will be owned on a 50-50 basis between the two.
"This acquisition represents an exciting opportunity to revamp one of Toronto's important corners at the intersection of two subway lines," REIT president Edward Sonshine said in a statement.
The 673,000 square foot Sheppard Centre, located at the northeast corner of Yonge and Sheppard, is an urban mixed use centre, retail, office, and residential uses occupied by major tenants. The retail portion of the property has a weighted average lease term of 5.3 years, is 96.1% leased, and contains 257,039 square feet of retail space on four levels. The major tenants in the retail portion of the property are Cineplex, Winners, Shoppers Drug Mart, Bank of Montreal, CIBC, and TD Canada Trust. The office portion of the property contains 415,815 square feet of office space in two towers, 19 and 9 storeys each and has a weighted average lease term of 6.8 years, is 100% leased, occupied by Major tenants in the office portion of the property include Bank of Montreal and Aon Hewitt, who together occupie approximately 82% of the office space. The property has direct access to both the Yonge and Sheppard subway lines and has three levels of underground parking that can accommodate more than 2,100 vehicles.
Being located at such major intersection at northeast corner of Yonge and Sheppard with direct access to both the Yonge and Sheppard subway lines, this well located property has potential of additional retail expansion to the current retail, office, and the addition of a larger residential/condominium component.
The property will be acquired free and clear of financing.
RioCan is Canada's largest real estate investment trust, owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 314 retail properties in Canada and the United States. containing an aggregate of over 75 million square feet, including 10 under development, and 38 grocery anchored and new format retail centres in the United States through various joint venture arrangements, with a total capitalization of approximately $11.9 billion as of September 30, 2011.
For further information, please refer to RioCan's website at www.riocan.com.
KingSett Capital is Canada's leading private equity real estate investment business with assets under management exceeding $3.5 billion. KingSett Capital co-invests with pension funds and high net worth individuals in its growth funds, mortgage fund and income fund.
For further information, Please refer to www.kingsettcapital.com.
News Release
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 this News Release, 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.
Contact Informatiom:
RioCan Real Estate Investment Trust
Edward Sonshine, O.Ont., Q.C.
President & CEO
(416) 866-3018
www.riocan.com
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