RioCan REIT Announces Agreements With Sears Canada at RioCan Oakville Place and Garden City Shopping Centre
TORONTO, Oct. 05, 2017 (GLOBE NEWSWIRE) — RioCan Real Estate Investment Trust (“RioCan”) (TSX:REI.UN) is pleased to announce that it has entered into agreements with Sears Canada Inc. (“Sears”), which received court approval on October 4, 2017. Sears is currently subject to restructuring proceedings under the Companies’ Creditors Arrangement Act (“CCAA”). RioCan and its co-owner Hudson Bay Company (“HBC”) have secured a surrender agreement with Sears for its location at RioCan Oakville Place, in Oakville, Ontario for a fee of $4 million (at 100%). In addition, at Garden City Shopping Centre in Winnipeg, Manitoba, RioCan and its co-owner Bayfield Realty Advisors (“Bayfield”) have entered into an agreement to purchase the freehold interest in the Sears location for a purchase price of $8 million (at 100%).
RioCan Oakville Place
RioCan and HBC have entered into an agreement with Sears to secure a lease surrender, for a fee of $4 million (at 100%). The property is co-owned through RioCan’s joint venture with HBC on a 50/50 basis. In the approximately 104,000 square feet formerly leased by Sears, RioCan has the option for a 40,000 square feet Saks Off Fifth, which it is considering among other alternatives. The partners are also in discussions with other national tenants to take the remainder of the space. The new leases when completed will provide significantly more rental income than what was generated previously through the lease arrangement with Sears. These new and exciting tenants will also serve to improve the appeal of RioCan Oakville Place and attract a wider range of shoppers.
Over the past three years, RioCan Oakville Place has undergone an extensive $40 million renovation that includes a modernization of the interior common areas and exterior improvements at the centre; renovation of the Hudson Bay store that anchors the site; replacement of the parking deck; and the introduction of fresh new retailers including Pusateri’s Fine Foods, Sephora, and Pandora.
RioCan’s Oakville Place is a two level regional mall containing approximately 470,000 square feet of gross leasable area situated on a 29 acre site, located adjacent to and directly off of Queen Elizabeth Way (“QEW”), the major highway running through Ontario’s “Golden Horseshoe”, in Oakville, Ontario. The mall is well connected to local transit infrastructure and within close proximity to the Oakville Go Train station. Oakville is a fast growing community with a strong, diversified economic base, and possesses one of Canada’s highest income demographics with an average household income statistic that is well above the national average.
In connection with the lease surrender, the partners will now be free to pursue future intensification possibilities at the site as the agreement eliminates the development restrictions that were part of the Sears lease agreement. With few development locations available in Oakville, it represents a significant opportunity to create additional value on the site with the potential significant additional density.
Garden City Shopping Centre
RioCan and its co-owner Bayfield have entered into a firm agreement to acquire the freehold interest in the Sears location at Garden City Shopping Centre in Winnipeg, Manitoba at a purchase price of $8 million (at 100%). The partners own the site on a 30% RioCan 70% Bayfield basis. RioCan provides property and asset management services for the property.
Located in Winnipeg’s Garden City neighbourhood, the Garden City Shopping Centre is home to 85 retailers and includes major national tenants such as Canadian Tire, Winners, Dollarama, and Goodlife Fitness. The centre is currently undergoing a $9 million renovation by the partners that will incorporate an expanded food court dining area, larger bathrooms and additional comfort seating within the mall as well as improvements to the energy efficiency of the centre.
The former Sears location is approximately 92,500 square feet and by acquiring the site the partners will secure control over the entirety of the site and the access points to the shopping centre. In addition, it will simplify the ownership structure of the property should the partners seek redevelopment opportunities at the location.
RioCan is Canada’s largest real estate investment trust with a total enterprise value of approximately $13.9 billion as at June 30, 2017. RioCan owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. Our portfolio is comprised of 299 properties, including 15 development properties, with an aggregate net leasable area of approximately 45 million square feet. To learn more about how we deliver real vision on solid ground, visit www.riocan.com.
FORWARD LOOKING INFORMATION
This news release contains forward-looking information within the meaning of applicable Canadian securities laws. This information includes, but is not limited to, statements concerning the acquisition of the former Sears locations at Oakville Place and Garden City Shopping Centre, as well as statements with respect to management’s beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management’s current beliefs and is based on information currently available to management. All forward-looking information in this News Release is qualified by these cautionary statements.
Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan’s current estimates and assumptions, which are subject to numerous risks and uncertainties, as described under “Risks and Uncertainties” in RioCan’s Management’s Discussion and Analysis for the period ended June 30, 2017 (“MD&A”) and the Trust’s most recent Annual Information Form, and including that the transactions contemplated herein are completed, which could cause actual events or results to differ materially from the forward-looking information contained in this News Release. 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.
Except as required by applicable law, RioCan undertakes no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
RioCan Real Estate Investment Trust
Senior Vice President and Chief Financial Officer