RioCan Spends $180M on 10 Shopping Centers

"These acquisitions include buildout and expansion opportunities totaling over 225,000 square feet of ancillary retail space which we expect can be completed over the next 12 to 18 months," says RioCan president and CEO Edward Sonshine. "[The centers] enhance the position of Wal-Mart as RioCan's largest revenue source while increasing significantly the proportion of its income derived from newly constructed new format retail."

The properties boast an overall 99% occupancy rate, deriving 94% of their income from anchor and national tenants. Wal-Mart, which anchors eight of the centers included in the deal, contributes 29% of the portfolio income.

"This sale of recently completed shopping centers illustrates the synergies that exist in the relationship between First Pro and RioCan," says Mitchell Goldhar, President and CEO of First Pro. "Through the development of centers such as these, First Pro fulfills its mandate of bringing value to Canadian consumers."

RioCan has total assets of over $3 billion consisting of ownership interests in a portfolio of 152 retail properties across Canada containing an aggregate of more than 23 million sf of gross leasable area. The REIT derives about 77.3% of its gross revenue from national and anchor tenants with no one tenant providing more than 5.5% of gross revenue. Its largest tenant is Wal-Mart and 14.1% of RioCan's revenue is provided by supermarkets.

First Pro specializes in developing large-scale, unenclosed shopping centers and opens a new property every three to four weeks. The firm is currently managing and developing a portfolio of more than 140 First Pro Shopping Centres located in every major market across Canada, with the majority anchored by a Wal-Mart store.

The company plans to open new Wal-Marts on Aug. 22 in Montreal, QC, Mount Pearl, NF and Cobourg, ON; on Oct. 3, in Etobicoke, ON and Woodstock, ON; on Nov. 14, in Prince George, BC and Calgary, AB; and on Jan. 30, 2003 in London, ON, Burlington, ON and Edmonton, AB.