Canada's largest REIT continues to make sizable retail acquisitions.
Toronto-based RioCan REIT announced Tuesday it has agreed to purchase a stake in four retail shopping centres in British Columbia and Alberta for $166 million. Under the deals expected to close at the end of the year, RioCan will purchase malls in Surrey, B.C., and Edmonton in joint ventures with CPP Investment Board and Sun Life, respectively.
RioCan will co-own Grandview Corners shopping Centre in Surrey and and the Edmonton West Retail Centre. The trust will hold 100% interests in retail centres in Lethbridge and Calgary.
“These four centres represent an excellent addition to RioCan's core portfolio and provide an opportunity to acquire a number of strategic assets while expanding our important relationships with CPPIB and Sun Life,” said Edward Sonshine, RioCan's president and CEO, in a news release.
With credit markets loosening, RioCan has arranged a five-year conventional first mortgage financing of $113 million whereby it will cover $94.5 million at a rate expected to be in the 5% range.
Last month, RioCan announced that it will spend $170 million on eight Canadian retail properties. The properties range from Ottawa to Winnipeg to Fort McMurray and offer a healthy 7.9 per cent cap rate.The move came after RioCan agreed to purchase seven grocery-anchored properties in the Northeastern U.S. as part a joint venture with U.S.-based Cedar Shopping Centers Inc. for $141 million.
Showing posts with label Allied Properties REIT. Show all posts
Showing posts with label Allied Properties REIT. Show all posts
Wednesday, December 2, 2009
Monday, November 2, 2009
Data centre deal second largest in Canada this year
Canada's recovering commercial real estate market has planted another signpost along its road to redemption.
Allied Properties REIT closed its $192-million acquisition of a data centre at 151 Front Street West in Toronto on Monday. The sale of the class A office property was the second largest in Canada this year behind German institutional investor Deka Bank's unsolicited $297-million purchase of the Bentall V office building in the spring.
According to a Wall Street Journal article published last week, the deal says more about the strength of data centres than the market itself. Data-centre property values have displayed resilience during the downturn, due to the rapidly-increasing popularity of streaming video and other Internet-based services that require considerable bandwidth.
But the deal also continues REITs' recent trend of raising money on the capital markets for acquisitions.
Allied partially funded the purchase of the 325,000-square-foot property from Northam Realty Advisors Ltd., by issuing about C$125 million in new units. Allied will use about $96 million from that offering to finance part of the deal, while the British Columbia Investment Management Corp., an institutional investment manager whose clients include public pension funds, provides $96 million on a 10-year mortgage at 7.5%.
"Happily, and to my surprise, the equity capital markets came roaring back faster than we thought they would," Michael Emory, Allied's CEO, was quoted in the Wall Street Journal story. "It was a big change in the Canadian environment."
After struggling to find credit through most of 2008, other REIT CEOs and investors have been making similar comments lately. The question now is how long it will take them to close more large deals.
Allied Properties REIT closed its $192-million acquisition of a data centre at 151 Front Street West in Toronto on Monday. The sale of the class A office property was the second largest in Canada this year behind German institutional investor Deka Bank's unsolicited $297-million purchase of the Bentall V office building in the spring.
According to a Wall Street Journal article published last week, the deal says more about the strength of data centres than the market itself. Data-centre property values have displayed resilience during the downturn, due to the rapidly-increasing popularity of streaming video and other Internet-based services that require considerable bandwidth.
But the deal also continues REITs' recent trend of raising money on the capital markets for acquisitions.
Allied partially funded the purchase of the 325,000-square-foot property from Northam Realty Advisors Ltd., by issuing about C$125 million in new units. Allied will use about $96 million from that offering to finance part of the deal, while the British Columbia Investment Management Corp., an institutional investment manager whose clients include public pension funds, provides $96 million on a 10-year mortgage at 7.5%.
"Happily, and to my surprise, the equity capital markets came roaring back faster than we thought they would," Michael Emory, Allied's CEO, was quoted in the Wall Street Journal story. "It was a big change in the Canadian environment."
After struggling to find credit through most of 2008, other REIT CEOs and investors have been making similar comments lately. The question now is how long it will take them to close more large deals.
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