RioCan closes on BMO portfolio, retail centres

Monday, January 19, 2015

RioCan has finalized the purchase of 18 Bank of Montreal (BMO) branch locations, along with three shopping centres.

The BMO branches, acquired for $49.4 million, are mainly situated in urban areas. Six are located in British Columbia, 11 are spread across Ontario, while one is in Montreal. The individual lease terms of the portfolio are ten years or longer.

RioCan also fully acquired Toronto-based Leaside Centre, a 133,000-square-foot property anchored by Canadian Tire. Other tenants include, Pier One Imports, PetSmart and Alexanian Carpet & Flooring.

RioCan bought 50 per cent interest in the centre from Kimco Realty for $31.5 million and will assume Kimco’s $16.5 million interest in the property debt. The centre is situated at the corner of Eglinton and Laird Avenue near the Eglinton Light Rail, currently under construction.

Towards the end of 2014, RioCan acquired two other shopping centres from its partner Sun Life.

Meadow Ridge Plaza in Ajax, Ont., is a 112-square-foot property leased to anchor tenant Sobeys, GoodLife Fitness and Dollarama. RioCan acquired 80 per cent interest for $30 million.

RioCan also bought 20 per cent interest in Edmonton-based Mayfield Common for $26.6 million. Save-On-Foods holds court at the 430-square-foot retail property. Other major tenants include, Winners/HomeSense, Dollarama and JYSK.

Edward Sonshine, chief executive officer of RioCan, said 2014 was a challenging acquisition market. “However, RioCan has been able to complete more than $270 million of income property acquisitions in Canada and the United States at an attractive 5.8 per cent weighted average yield since the beginning of 2014,” he pointed out.

Further to these acquisition announcements, RioCan said that as part of its goal to invest in higher growth assets and projected development projects, the company has recently completed the sale of five Quebec-based properties for $120 million.