TORONTO, ONTARIO -- (Marketwired) -- 04/05/13 -- RioCan Real Estate Investment Trust ("RioCan") is pleased to announce that it has completed the purchase of a 50% interest in Burlington Mall in Burlington, Ontario and a 100% interest in Oakville Place in Oakville, Ontario from Primaris Retail REIT ("Primaris"). RioCan's purchase of Burlington Mall was completed on a 50/50 joint venture basis with KingSett Canadian Real Estate Income Fund. RioCan has also purchased a 100% interest in South Cambridge Centre in Cambridge, Ontario from H&R REIT.
The aggregate gross purchase price for these three properties is approximately $397 million (at RioCan's interest). In connection with the purchase, RioCan assumed, at its interest, the in place mortgage financing of approximately $184 million in aggregate. The purchase price was reduced by a mark-to-market adjustment on closing in consideration of the debt's above market interest rate of approximately $9.8 million. RioCan's equity commitment for the two properties was funded with cash on hand and lines of credit.
These properties add to RioCan's growing enclosed mall portfolio that includes such properties as Georgian Mall, RioCan Yonge Eglinton Centre, RioCan Sheppard Centre, Lawrence Square and Shoppers World Brampton, all located in the GTA and surrounding markets. The acquisition of Oakville Place and Burlington Mall strengthens RioCan's competitive position in the enclosed mall sector. There are additional opportunities for organic growth within the acquired shopping centres, which RioCan believes it can realize with its deep infrastructure and management strength.
"We are pleased to complete these acquisitions that strengthen RioCan's portfolio of enclosed malls, and will reinforce our competitive position in the GTA, Canada's largest market. RioCan's growing enclosed mall platform with its strong fashion component will further support RioCan's relationships with its growing North American tenant base," said Edward Sonshine, CEO of RioCan. "This acquisition also strengthens our relationship with KingSett, who were an instrumental part of this transaction."
Oakville Place is located directly off of Queen Elizabeth Way ("QEW"), the major highway running through Ontario's "Golden Horseshoe", in Oakville, Ontario. 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. Oakville Place is a fashion focused, two level regional mall containing approximately 455,000 square feet of gross leasable area. The property was built in 1981 and has undergone significant renovations in 2004 and 2008. Oakville Place is 100% occupied and is anchored by The Bay and Sears. Other major retail tenants at Oakville Place include American Eagle, H&M, Jacob, Birks, Roots, Laura, Mexx and Shoppers Drug Mart. At September 30, 2012, the property's Commercial Retail Units ("CRU") generated average sales of approximately $493 per square foot. Approximately 94% of the gross rent is generated by national and regional tenants. RioCan purchased a 100% interest in the property at a purchase price of $259 million. In connection with the purchase, RioCan assumed the in place mortgage financing of $112 million which carries an interest rate of 4.7%, maturing in 2021.
Burlington Mall, located near the QEW at Guelph Line and Fairview Street, is a 782,000 square foot enclosed mall. The property is owned on a 50/50 joint venture basis with the KingSett Canadian Real Estate Investment Fund. Burlington Mall was constructed in 1968 and has undergone significant renovations in 2001, 2004 and 2006. The property is 99% occupied and is anchored by Target, Canadian Tire and Winners/HomeSense, and is shadow anchored by The Bay. Other major tenants include Dollarama, Old Navy, Shoppers Drug Mart and SportChek. At September 30, 2012, the property's CRU generated average sales of approximately $386 per square foot. Approximately 87% of the gross rent is generated by national and regional tenants. RioCan will provide asset and property management functions for the property. The purchase price for the property was $206 million at 100% ($103 million at RioCan's interest). In connection with the purchase, the parties assumed the in place mortgage financing of $105 million ($52.5 million at RioCan's interest) which carries an interest rate of 3.8%, maturing in 2016.
South Cambridge Centre is a 190,131 square foot grocery anchored shopping centre. The property is 100% occupied and is anchored by a Zehrs grocery store (Loblaws). Other major tenants at the property include the Liquor Control Board of Ontario, The Beer Store and Home Hardware. RioCan purchased a 100% interest in the property at a purchase price of $35 million. In connection with the purchase, RioCan assumed the in place mortgage financing of $19.5 million which carries an interest rate of 5.5% maturing in July 2016.
This acquisition was part of the successful completion of the amended arrangement between H&R REIT and Primaris announced April 4, 2013.
RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $14.3 billion as at December 31, 2012. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 346 retail properties containing more than 82 million square feet, including 52 grocery anchored and new format retail centres containing 13.6 million square feet in the United States through various joint venture arrangements as at December 31, 2012. RioCan's portfolio also includes 11 properties under development in Canada. For further information, please refer to RioCan's website at www.riocan.com.
RioCan Real Estate Investment Trust
Executive Vice President & CFO
SEPTEMBER 2, 2014
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