RioCan REIT Announces Agreements With Sears Canada at RioCan Oakville Place and Garden City Shopping Centre
October 05 2017 - 08:00AM
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.
ABOUT RIOCAN
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.
Information Contact:
RioCan Real Estate Investment TrustQi TangSenior Vice President
and Chief Financial Officer416-866-3033
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