RioCan Real Estate Investment Trust , Canada's largest real estate investment trust, said Tuesday it was buying a stake in four retail shopping centres in British Columbia and Alberta for $166-million.
Two of the properties, one in Surrey, B.C., and the other in Edmonton, will be bought in a joint ventures with CPP Investment Board and Sun Life respectively.
The deals are expected to close before end of the year.
Once complete, RioCan will hold stakes in the Grandview Corners shopping Centre in Surrey, B.C., and the Edmonton West Retail Centre, and will be the sole owner of the Lethbridge North retail Centre in Lethbridge, Alta., and the Calgary East Retail Centre.
"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 chief executive officer.
RioCan said it has arranged a five-year conventional first mortgage financing for three of the four properties of $113-million, of which its share will be $94.5-million. The interest rate is expected to be about 5 per cent.
Three of the properties are anchored by Wal-Mart and all properties are 98 per cent occupied.
The average lease term for these four properties is 10 years with an average base rental rate $17.70 per square foot.
RioCan said it could earn an additional $17-million from extra leasing of vacant space through an earn-out mechanism.
RioCan also said Tuesday it had completed a $101-million public offering of trust units and over allotment options with a syndicate of underwriters co-led by RBC Dominion Securities, TD Securities Inc. and BMO Nesbitt Burns.
RioCan's units closed at $18.30 Monday on the Toronto Stock Exchange.