REIT Selling 10-Property Portfolio in Ontario’s Fifth-Largest Market, as Property Sales Continue
RioCan Realty Investment Trust has formally noted its 10 shopping centres for sale in London, in a move that will mark the REIT’s exit from the southwestern Ontario town.
RioCan has kept RBC Capital Markets to shop the 10 retail residential or commercial properties, which together amount to just over one million square feet of gross leasable area.
The move, which has been expected considering that the REIT’s choice in 2017 to concentrate on its 6 core markets of Toronto, Montreal, Ottawa, Vancouver, Edmonton and Calgary, the sale listing puts a great deal of retail area in play for the area of simply over half a million people.
“While London represents a strong market, the city does not fit within the confines of RioCan’s core markets,” according to RBC in its listing product, which keeps in mind London is Ontario’s fifth-largest census city.
The portfolio consists of nine, open-format centres and one enclosed shopping mall. RioCan has actually owned the residential or commercial properties for an average of 19 years. They are 97 percent leased with a weighted average lease term of 4.1 years.
Within the portfolio, Sherwood Forest Shopping mall is the biggest residential or commercial property at 211,514 square feet, and makes up about 18.3 percent of the portfolio’s net operating income.
RioCan was wanting to offer all the retail centres as part of a single package, however is now considering deals that breaks the portfolio into 2 or three pieces, inning accordance with a source near to the listing. Offers are anticipated in the next 2 weeks.
The REIT did have one other London residential or commercial property that was packaged with 5 other little properties in Bowmanville, Kingston, London, Hamilton, Windsor and Sudbury. Those properties were all Bank of Montreal structures, part of a previous sale and leaseback that sold for $13.3 million with a weighted typical capitalization rate of 7.12 percent based upon in-place net operating income.
RioCan stated this month that, as of May 8, 2018, it had either finished or participated in agreements to sell $583.4 countless residential or commercial properties in secondary markets at a weighted average capitalization rate of 6.14 percent based on in-place net operating earnings. The sales represent about 29 percent of the REIT’s revealed disposition target.
RioCan has likewise participated in eight conditional contracts to offer 14 residential or commercial properties in Ontario, Quebec and British Columbia for aggregate sale profits of $224.8 million.
If those conditional offers go through, RioCan would have completed the sale of 40 properties for aggregate sale profits of $808.2 million or 40 percent of its personality target based on sales earnings, at a weighted typical capitalization rate of 6.40 percent.