TORONTO, ONTARIO, Jan. 12, 2011 (Marketwire) --
RioCan Real Estate Investment Trust ("RioCan") (TSX:REI.UN) is pleased to provide an update on its ongoing acquisition platform in Canada and the United States. In the fourth quarter of 2010, RioCan has completed the acquisition of four properties in Canada at an aggregate purchase price of $79.2 million with a weighted average cap rate of 7.2%. Also in December 2010, RioCan completed the eight property portfolio acquisition from Inland Western Retail REIT ("Inland Western") included in the announcement dated May 20, 2010 with the closing of the final three assets. The final three properties were acquired at a purchase price of US$62.1 million at a cap rate of approximately 7.7%.
In the fourth quarter of 2010, RioCan completed the following acquisitions:
RioCan has acquired a 75% interest in Keswick Walmart, a 162,748 square foot newly developed new format retail property located in Keswick, Ontario, a suburb north of Toronto. The recently completed property is anchored by a 151,000 square foot Walmart (lease expiry 2030). There is also the potential for additional density on the site by way of two additional pads totaling approximately 11,748 square feet. Such density is subject to earn-out rights in favour of the vendor whereby consideration is to be paid if and when leases are in place with tenants open for business. RioCan acquired the property at a purchase price of $17.9 million (at RioCan's interest) at a cap rate of 7.0% and will manage the property on behalf of the co-ownership. RioCan has secured financing, at its interest, of $11.9 million for a ten-year term at a rate of 4.97%.
Mill Woods Town Centre
RioCan completed its acquisition of a 40.34% co-ownership interest in the retail component of Mill Woods Town Centre, Edmonton, (acquiring an increased interest in the retail centre from the 30% interest originally contemplated and as disclosed in the Interim Financial Report), for a purchase price of $34.7 million at a cap rate of 7.6%. The remaining interest is held by Bayfield Realty Advisors. The property was acquired with financing in the amount, at RioCan's interest, equal to $22.7 million based on a five year term at a rate of 4.42%. RioCan will manage the retail component of the property on behalf of the co-ownership. Mill Woods is a 534,865 square foot enclosed mall anchored by a Safeway, Canadian Tire and Zellers.
Queensway Cineplex, a 110,700 square foot new format retail property located in Toronto, Ontario. The property, which was built in 2000, is anchored by an 87,510 square foot Cineplex on a land lease (lease expiry 2025). Other major tenants at the property include Bank of Nova Scotia, Kelsey's, Montana's, and Milestones. RioCan acquired a 50% managing interest in the property at a purchase price of $15.7 million equating to a cap rate of 6.0%. RioCan assumed the in-place $7.0 million (at RioCan's interest) mortgage financing that carries a rate of 7.13% that matures in December 2013.
740 Dupont Road
Located in Toronto, the property is approximately 1.4 acres and currently houses a 25,000 square foot building occupied by Grand Touring Automobiles. RioCan acquired the property at a purchase price of $10.9 million equating to a cap rate of 7.7%. The property has been acquired free and clear of financing.
Canadian Acquisitions Under Contract
RioCan has entered into an agreement of Purchase and Sale with respect to four Canadian properties that represent $33.5 million of additional acquisition opportunities. It is expected that these transactions will be completed in the first quarter of 2011. Included in the four properties are three stand-alone retail properties all occupied by a national retailer that total 44,500 square feet and if acquired would represent approximately $14.5 million of additional acquisitions at a 7.1% cap rate. These properties are in various stages of due diligence and while efforts will be made to complete these acquisitions no assurance can be given.
In the fourth quarter, RioCan through its agreement with Inland Western completed the acquisition of an 80% interest in three properties in Texas. The three properties were the final three remaining acquisitions that were included in the announcement of May 20, 2010. The three properties acquired at a purchase price of US$62.1 million (at RioCan's interest) at a cap rate of approximately 7.7%.
The three properties that were acquired are (square footage figures at 100%):
Riverpark Shopping Center Phase I
Phase I of Riverpark Shopping Center located in the Houston submarket of Sugarland. Riverpark Phase I is a 186,000 square foot unenclosed shopping centre anchored by HEB Grocery, Walgreens and Bank of America. The transaction closed on December 30, 2010. RioCan previously acquired (on October 22, 2010) an 80% interest in Riverpark Phase II. This was the final remaining acquisition of the previously announced acquisition of eight properties in Texas from Inland Western. First mortgage financing was assumed as part of the transaction. The in-place financing of US$22.7 million (at RioCan's interest) carries an interest rate of 5.6% and is scheduled to mature in November 2013.
Great Southwest Crossing
Great Southwest Crossing, located in the Dallas-Fort Worth submarket of Grand Prairie, is an unenclosed 92,270 square foot shopping centre anchored by a 18,875 square foot Petsmart, a 20,515 square foot Office Depot and shadow anchored by a Sam's Club and Kroger Grocery Store. First mortgage financing was assumed as part of the transaction, the in place financing of US$6.8 million (at RioCan's interest) carries an interest rate of 6.3% and is scheduled to mature in August 2013.
South Park Meadows Phase I
Southpark Meadows I is a 266,840 square foot new format retail centre, located in Austin, that is anchored by a 205,736 square foot Walmart Supercenter (ground lease expiry 2024). Other major tenants at the subject property include, PetSmart, Subway and Starbucks. The property is adjacent to phase II which is anchored by a Super Target and JC Penny and includes other major retailers such as Bed Bath & Beyond, Best Buy, Office Max, and Marshalls. Conventional 5 year first mortgage financing of US$11.4 million (at RioCan's interest) and carries an interest rate of 4.7% was placed on the property at closing.
US Acquisitions Under Contract
RioCan has entered into an agreement of Purchase and Sale with respect to three US properties that represent an approximately US$50 million of additional acquisition opportunities. It is expected that these transactions will be completed in the first quarter of 2011. These properties are in various stages of due diligence and while efforts will be made to complete these acquisitions no assurance can be given.
"RioCan exceeded its acquisition goals in 2010 and we ended the year with a strong finish in December," said Edward Sonshine, Q.C., President and CEO of RioCan. "RioCan completed almost $1 billion of acquisitions in 2010, including the acquisition of 29 properties in the US which made last year one of the most active acquisition years in RioCan's history."
RioCan is Canada's largest real estate investment trust with a total capitalization in of approximately $10.1 billion as at December 31, 2010. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 296 retail properties, including 10 under development, containing an aggregate of over 66 million square feet. RioCan owns an 80% interest in 31 grocery anchored and new format retail centres in the United States through various joint venture arrangements. In addition, RioCan owns a 14% equity interest in Cedar Shopping Centers, Inc., a real estate investment trust focused on supermarket-anchored shopping centres and drug store-anchored convenience centres located predominantly in the Northeastern United States. For further information, please refer to RioCan's website at www.riocan.com.
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 statements are not guarantees of future events or performance and, by their nature, are based on RioCan's estimates and assumptions, which are subject to risks and uncertainties, including those described under "Risks and Uncertainties" in its management discussion and analysis dated September 30, 2010 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 conditions to the transactions not being satisfied resulting in the failure to complete some or all of the proposed transactions, real estate and capital market conditions. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include: a less robust retail environment than has been seen for the last several years; relatively stable interest costs; an increase in acquisition capitalization rates; a decrease in land costs for greenfield development; a continuing trend towards land use intensification in high growth markets; more limited but available access to equity and debt capital markets to fund, at acceptable costs, the future growth program and to enable the Trust to refinance debts as they mature and the availability of purchase opportunities for the joint venture. 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.
RioCan Real Estate Investment Trust
Senior Vice President & CFO