Skip to main content

Loblaw files a preliminary prospectus to create one of Canada’s largest commercial real estate trusts.

Fernando Morales/The Globe and Mail

One of the first questions coming up in the wake of the announcement of Loblaw Cos. Ltd.'s plan to buy Shoppers Drug Mart Corp. for $12.4-billion is: What does it mean for the Loblaw REIT?

The answer, it seems, is not very much. Loblaw just completed the initial public offering of Choice Properties Real Estate Investment Trust, which will hold the grocer's huge real estate portfolio.

That was a large part of getting the Shoppers deal done as it raised cash for Loblaw and cranked up the company's valuation. But when it comes to putting Shoppers' real estate into Choice, the fact is there's just not much real estate there.

Story continues below advertisement

According to Shoppers filings, the company leases almost all of its more than 1,300 locations, and owns only 27 stores. Of seven distribution centres, Shoppers owns four and leases three. So don't look for a big dropdown transaction where Loblaw sells Shoppers properties to the REIT to raise money.

(As an aside, the fact that the first question from so many people on such a massive deal is "what does it mean for the real estate" is pretty telling about what investors are fixated on these days.)

(Boyd Erman is a Globe and Mail Capital Markets Reporter & Streetwise Columnist.)

Return to Streetwise home page.

The Globe has launched a Streetwise and ROB Insight newsletter, with content available exclusively to Globe Unlimited subscribers. Get the best of our exclusive insight and analysis delivered straight to your inbox in a daily e-mail curated by our editors. Sign up for it and other newsletters on our newsletters and alerts page.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies